ACC 2101 Midterm Study
In Cash Flow Reporting: what is the income at the point of sale? $0Correct $3 $8 Loss of $5 It depends on the measuring system
$0
In Cash Flow reporting: A/R is measured at $3 It depends on the measuring system $8 $0 $5
$0
In Cash Flow reporting: inventory is measured at $3 It depends on the measuring system $8 $0 $5
$0
A company provides services on account. Indicate how this transaction would affect (1) assets, (2) stockholders' equity, and (3) revenues. (1) Increase, (2) No effect (3) Increase (1) No effect, (2) No effect (3) No effect (1) Increase, (2) Increase (3) Increase (1) No effect, (2) Increase (3) Increase
(1) Increase, (2) Increase (3) Increase
ABC buys widgets for $5 cash and sells them on account for $8. From a cash flow perspective, the receivable is valued at?
0
Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable. Provided services to customers on account. Collected cash from customers on account. How many of these four transactions increased the given company's total liabilities? 3 4 1 2
1
Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable. Provided services to customers on account. Collected cash from customers on account. How many of these four transactions increased the given company's total liabilities? 4 2 3 1
1
Following are transactions of ABC, a new company, during the month of January: Issued 10,000 shares of common stock for $15,000 cash. Purchased land for $12,000, signing a note payable for the full amount. Purchased office equipment for $1,200 cash. Received cash of $14,000 for services provided to customers during the month. Purchased $300 of office supplies on account. Paid employees $10,000 for their first month's salaries. How many of these transactions decreased ABC's total assets? 2 3 1 4
1
Following are transactions of ABC., a new company, during the month of January: Issued 10,000 shares of common stock for $15,000 cash. Purchased land for $12,000, signing a note payable for the full amount. Purchased office equipment for $1,200 cash. Received cash of $14,000 for services provided to customers during the month. Purchased $300 of office supplies on account. Paid employees $10,000 for their first month's salaries. How many of these transactions decreased ABC's total assets? 3 4 2 1
1
For which step (1,2,3,4, or 5) in the Operating cycle is there a difference between manufacturers and retailers?
1
Which of the following statements is NOT correct about the financial statements? A balance sheet reports assets, liabilities, revenues, and expenses. The statement of cash flows shows cash inflows and outflows from operating, financing, and investing activities. The statement of stockholders' equity presents common stock, dividends, and retained earnings information. An income statement reports revenues, expenses, and net income information.
A balance sheet reports assets, liabilities, revenues, and expenses.
Which statement is true? All Balance Sheet accounts are Permanent Some Balance Sheet accounts are Permanent and some Balance Sheet accounts are Temporary. All Balance Sheet accounts are Temporary
All Balance Sheet accounts are Permanent
Which one statement is true? All Income Statement accounts are Temporary All Income Statement accounts are Permanent Some Income Statement accounts are Temporary and some are Permanent
All Income Statement accounts are Temporary
Which statement is true? All Income Statement accounts are Temporary All Income Statement accounts are Permanent Some Income Statement accounts are Permanent and some Income Statement accounts are Temporary.
All Income Statement accounts are Temporary
Which of the following statements is/are a snapshot (may have more than one answer)? Statement of Changes in Equity Statement of Cash Flows Income statement Balance Sheet
Balance Sheet
Usually we measure A/R at Sacrifice Value $0 Benefit Value
Benefit Value
Usually we measure Accounts Receivable at
Benefit Value
Income in the operating cycle equals It depends on the Measuring system. Benefit Value Plus Sacrifice Value Benefit Value Minus Sacrifice Value Sacrifice Value Minus Benefit Value
Benefit Value Minus Sacrifice Value
Accounts Receivable are usually measured at
Benefit Value.
The ultimate goal of doing accounting is to (3 words):
Bill the Client
The usual balance in a Contra-Asset account is a:
CR
The usual balance in a Contra-Dividend account is a:
CR
The usual balance in a Contra-Expense account is a:
CR
After the 3rd step in the Operating Cycle, the firm has?
Cash
After the Third STEP in the Operating Cycle the firm has? Cash None of the other three Account Receivable Inventory
Cash
Before the 1st step in the Operating Cycle, the firm has? Receivable Cash Inventory
Cash
The Operating cycle starts with?
Cash
Which of the following is a balance sheet item? Cash Dividends Utilities expense Net income
Cash
Which of the following items would not appear in an income statement? Service revenue. Cash. Advertising expense. Salaries expense.
Cash
Which of the following is not a major section in the statement of cash flows? Cash flows from financing activities. Cash flows from operating activities. Cash flows from investing activities. Cash flows from customers.
Cash flows from customers.
Which of the following accounts would normally have a debit balance? Cash, Delivery expense, Dividends. Salaries Payable, Deferred Revenue, Utilities Expense. Income Tax Payable, Service Revenue, Dividends. Accounts Payable, Service Revenue, Common Stock.
Cash, Delivery expense, Dividends.
Which of the following are made AFTER the financial statements are prepared? Transaction Entries Adjusting Entries Closing Entries
Closing Entries
The 3rd step in the operating cycle is called?
Collection
The third step in the Operating Cycle is called Sale Purchase Manufacture Collection
Collection
Below is the company's Cash T-account. Cash Beg. 1,200 5,200 3,100 End. 3,300 The $5,200 amount could represent which of the following? Payment for salaries. Ending balance of cash. Purchase of supplies on account. Collection from customers.
Collection from customers.
In a three line heading, the first line is the: Time period of the statement Name of the statement Company name
Company name
Allowance for Bad Debts is what kind of account?
Contra Asset
ABC provides music for special occasions. On January 14, the Smith family hired ABC for an upcoming family wedding for an agreed upon fee of $10,000. The wedding was scheduled for May As part of the agreement, the Smiths paid ABC half of the fee at the end of April with the remaining amount due by the end of June. How would ABC record the receipt of the final payment in June?
Credit to Accounts Receivable.
The usual balance in a Contra-Liability account is a:
DR
The usual balance in a Contra-Owners' Equity account is a:
DR
The usual balance in a Contra-Revenue account is a:
DR
Accounts Receivable are like
Dead Fish that deteriorate with age.
Which of the following is recorded upon receipt of a payment on April 7, 2018, by a customer who pays a $900 invoice dated March 3, 2018, with terms 2/10, n/60?
Debit Cash $900
What do we end with in a bathtub (2 words)?
Ending Balance
Which of the following is not a balance sheet item? Assets. Liabilities. Expenses. Retained Earnings.
Expenses.
After the 1st step in the Operating Cycle, the firm has? Cash Inventory Receivable
Inventory
After the First STEP in the Operating Cycle the firm has? Inventory None of the other three Account Receivable Cash
Inventory
After the first STEP in the Operating Cycle, the company has?
Inventory
The primary focus for financial accounting information is to provide information useful for: Investment decisions and credit decisions. Neither investment decisions nor credit decisions Credit decisions but not investment decisions. Investment decisions but not credit decisions.
Investment decisions and credit decisions.
Choose one: It is possible for Cash Inflows to balance Cash Outflows on the Statement of Cash Flows The Statement of Cash Flows never balances The Statement of Cash Flows always balances
It is possible for Cash Inflows to balance Cash Outflows on the Statement of Cash Flows
Choose one: It is possible for the Income Statement to balance The Income Statement never balances The Income Statement always balances
It is possible for the Income Statement to balance
A company received an order from a customer in June for services to be provided. Those services were provided in July, and the customer paid the full amount in August. According to the revenue recognition principle, in which month should the company record revenue?
July
Owners' Equity is Just a number, not a thing A thing
Just a number, not a thing
Which of the following is not possible when recording a transaction? Stockholders' equity increases and assets increase. One asset increases and another asset decreases. Liabilities increase and assets decrease. Stockholders' equity decreases and assets decrease.
Liabilities increase and assets decrease.
Purchasing office equipment on account has what impact on the accounting equation? Assets decrease and liabilities decrease. Liabilities increase and assets increase. Stockholders' equity decreases and assets increase. Assets increase and stockholders' equity increases.
Liabilities increase and assets increase.
Which of the accounts are decreased on the debit side and increased on the credit side? Assets, dividends, and expenses. Expenses, dividends, and stockholders' equity. Dividends, liabilities, and assets. Liabilities, stockholders' equity, and revenues.
Liabilities, stockholders' equity, and revenues.
Unearned Revenue is what kind of account? Expense Asset Liability Revenue Dividends
Liability
In Cash Flow Reporting :what is the income at the acquisition of Inventory $8 $0 $3 Loss of $5
Loss of $5
Duality of Asset Valuation is primarily as issue in Measuring Income Measuring Assets
Measuring Assets
Which of the following are classified as Accounts Receivable? (This question may have multiple answers) Tax refunds owed to us by the IRS.Tax refunds owed to us by the IRS. Monies that customers owe us for providing a service. Monies that customers owe us from sale of merchandise. Loans we made to a customer.
Monies that customers owe us for providing a service. Monies that customers owe us from sale of merchandise.
Which of the following are classified as Accounts Receivable? Monies that customers owe us from sale of merchandise. Monies that customers owe us from providing a service. Tax refunds owed to us by the IRS. Interest Receivable. Loans we made to a customer. Loans we made to an employee.
Monies that customers owe us from sale of merchandise. Monies that customers owe us from providing a service.
In a three line heading, the second line is the: Company name Time period of the statement Name of the statement
Name of the statement
Which of the following best represents value created for stockholders during the current period? Retained earnings Net income Stockholders' equity Total assets
Net Income
Which of the following has the single greatest impact on stock prices? Total dividends Net Income Total Assets Total Revenues
Net Income
Is it possible to make an entry which changes only one account?
No
When a company pays cash for equipment, what is the effect on the accounting equation for that company?
No Change
When a company pays cash for equipment, what is the effect on the accounting equation for that company? Decrease assets and decrease liabilities. No change. Increase assets and increase liabilities. Increase assets and increase stockholders' equity.
No change.
ABC accounts for bad debts using the allowance method. On 6/1, ABC wrote off DE's $2,500 account. What effect will this write-off have on ABC's balance sheet at the time of the write-off?
No effect
ABC buys widgets for $5 cash and sells them on account for $8. At collection, what is the effect on the net income of ABC? Increase $3 Increase $8 Decrease $5 No effect
No effect
On January 1, ABC sold $30,000 in products to a customer on account. Then on January 10, ABC collected the cash on that account. What is the impact on ABC's accounting equation from the collection of cash on January 10? No net effect on the accounting equation. Assets increase and liabilities decrease. Assets decrease and liabilities decrease. Assets increase and stockholders' equity increases.
No net effect on the accounting equation.
ABC sold $500 in widgets to a customer on account on January 1. On January 11 ABC collected the cash from that customer. What is the impact on ABC's accounting equation from the collection of cash? No net effect to the accounting equation. Decrease assets and increase liabilities. Increase assets and increase liabilities. Decrease assets and decrease liabilities.
No net effect to the accounting equation.
Executory Contracts are generally Recorded with an adjusting entry Not recorded Recorded with a transaction entry Recorded with a closing entry
Not recorded
Permanent accounts are found:
On the Balance Sheet
Temporary accounts are found On the Income Statement On the Balance Sheet On neither the Balance Sheet and Income Statements On both the Balance Sheet and Income Statements
On the Income Statement
What do we start with in a bathtub (2 words)?
Opening Balance
Name the 3 Cash Flows on the Cash Flow Statement (no credit, but very important)
Operations, Financing, Investing
Which of the following of ABC, a new company, decreased ABC's total assets (may have more than one answer)? Purchased office equipment for $1,200 cash. Received cash of $14,000 for services provided to customers during the month. Purchased land for $12,000, signing a note payable for the full amount. Paid employees $10,000 for their first month's salaries. Purchased $300 of office supplies on account.
Paid employees $10,000 for their first month's salaries.
What is usually a better predictor of future cash flow to the firm? Past Income Past Cash Flow
Past Income
When a company makes an end-of-period adjusting entry that includes a credit to Prepaid Rent, the debit is usually made to: Cash Rent Payable Rent Receivable Rent Expense
Rent Expense
Which statement below best describes the accounting equation? Resources of the company equal creditors' and owners' claims to those resources. Financing activities equal investing and operating activities. The change in retained earnings equals net income less dividends. Equality of revenue and expense transactions over time.
Resources of the company equal creditors' and owners' claims to those resources.
Which of the following is not a balance sheet item? Common stock Revenues Retained earnings Assets
Revenues
Usually we measure Inventory at Sacrifice Value $0 Benefit Value
Sacrifice Value
The second step in the Operating Cycle is called?
Sale
For most businesses what is the critical event? Collecting Cash for Receivables Sale of Inventory Acquiring (manufacture or purchase) Inventory
Sale of Inventory
Marketing is involved in which step in the Operating cycle? First Fourth Second Third
Second
The Balance Sheet is a: Snapshot Video
Snapshot
When Managers report they Sometimes like to look good, and sometimes like to look bad Always try to look good Always try to look bad
Sometimes like to look good, and sometimes like to look bad
During a Sale in the operating cycle, what happens to cash? It Depends Decreases Increases Stays the Same
Stays the Same
When a company makes an end-of-period adjusting entry, which includes a debit to Supplies Expense, the usual credit entry is made to:
Supplies
Tax Accounting is done for whom Actual Investors Potential Investors Actual Creditors Potential Creditors the IRS Internal Managers
The IRS
Important Question (not graded): Explain the Trueblood Criterion
The Trueblood Criterion is the process used by accountants to report the past and present firm information. In this process, the AR gives the legal right to get the benefit value.
Prior to year-end adjusting entries, what would explain the Allowance for Uncollectible Accounts having a debit balance? The amount of credit sales in the current year was greater than the amount of credit sales made in the prior year. The amount of cash collections from customers in the current year was less the amount of cash collections from customers in the prior year. The amount of actual uncollectible accounts in the current year was greater than the estimate of uncollectible accounts made at the end of the prior year. The amount of actual uncollectible accounts in the current year was less than the estimate of uncollectible accounts made at the end of the prior year.
The amount of actual uncollectible accounts in the current year was greater than the estimate of uncollectible accounts made at the end of the prior year.
Which of the following best explains the meaning of total stockholders' equity?
The amount of capital invested by stockholders plus profits retained over the life of the company.
The ending balance of Retained Earnings can best be described as: The amount of cash received from stockholders over the life of the company. The amount of dividends paid over the life of the company. The amount of net income over the life of the company not paid to owners in the form of dividends. The amount of net income over the life of the company.
The amount of net income over the life of the company not paid to owners in the form of dividends.
Important Question (not graded): What is the Benefit Value of an Asset?
The benefit value of an asset if the future perspective of what the asset will be worth.
What is the most likely reason for a company to have an increase in average collection period?
The company has become more lenient in its credit policies and is extending credit terms to maintain customers.
A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true?
The company records deferred revenue on October 15.
If a company has stockholders' equity of $60,000 at the end of the year, which of the following statements must be true? The company's assets exceed liabilities by $60,000. Total revenues during the year equal $60,000. The company has issued $60,000 of common stock. Net income for the year equals $60,000.
The company's assets exceed liabilities by $60,000.
In your own words, describe the operating cycle. Note this is the most important question in this quiz. It will not graded.
The operating cycle illustrates the cash flow of money for a business. The cycle describes the process in which money is used to acquire inventory and how that inventory gets sold for more money.
Important Question (not graded): What is the relationship between Income Measurement and Asset Valuation?
The relationship is that the Income Measurement is found by subtracting the sacrifice value from the benefit value. These values are derived from asset valuation.
Important Question (not graded): What is the Sacrifice Value of an Asset?
The sacrifice value of an asset is the historical perspective of what an asset is valued based on its cost.
In Cash Flow reporting, at the collection of an Account Receivable There is a Gain It depends on the measuring system There is a Loss There is no Loss and no Gain
There is a Gain
In Cash Flow reporting when the firm acquires inventory There is no Loss and no Gain There is a Gain It depends on the measuring system There is a Loss
There is a Loss
In Cash Flow reporting at the point of Sale There is no Loss and no Gain It depends on the measuring system There is a Loss There is a Gain
There is no Loss and no Gain
When you develop an entry There is no required ordering of Debits and Credits Credits are on top, Debits are on the bottom Debits are on top, Credits are on the bottom
There is no required ordering of Debits and Credits
In a three line heading, the third line is the: Name of the statement Company name Time period of the statement
Time period of the statement
If a company records cash received for services to be provided in the future with a debit to Cash and a credit to Service Revenue, how will this error affect total assets for the current period?
Total assets will be correct.
Which of the following are made BEFORE a trial balance is prepared? Transaction Entries Adjusting Entries Closing Entries
Transaction Entries
Which of the following are made when the business does something?
Transaction Entries
Investors and Creditors are interested in which of these entries? Transaction Entries Adjusting Entries Closing Entries
Transaction Entries Adjusting Entries
Which of the following are made BEFORE the financial statements are prepared? Transaction Entries Adjusting Entries Closing Entries
Transaction Entries Adjusting Entries
Which of the following is/are made BEFORE the financial statements are prepared (may have more than one answer)? Transaction Entries Closing Entries Adjusting Entries
Transaction Entries Adjusting Entries
For which of the following must Debits equal Credits?
Transaction Entries Closing Entries Adjusting Entries
In a Balanced set of Accounting Records, EVERY Transaction must balance.
True
The Balance Sheet always balances.
True
The Income Statement is a: Video Snapshot
Video
The Statement of Cash Flows is a: Video Snapshot
Video
Explain the Equal Rights Amendment in Algebra (no points, but very important):
What you do to one side you must do to the other
The Basic Accounting Equation: ____________ = _______________ + ______________ ______________ (4 words)
assets liabilities owners' equity
Business in four words:
buy low sell high
Given the information below about ABC, how much dividends did the company paid in the current period? (just type numbers) Beginning retained earnings $45,000 Ending retained earnings $110,000 Decrease in cash $10,000 Net income $85,000 Change in stockholders' equity $15,000
20000
ABC had a net income of $8,000, $5,000, $12,000, and $10,000 over the first four years of the company's existence. If the average annual amount of dividends paid over the last four years is $3,000, what is the ending retained earnings balance? (If your number is 12,345 do not put in $ or commas, just type 12345)
23000
To the nearest %, paying on the 15th day for a 1/15, net/30, gives an annual return of (just write the number)
24
ABC opened for business on January 1, 2018, and paid for two insurance policies effective that date. The liability policy was $54,000 for 18 months, and the crop damage policy was $18,000 for a two-year term. What was the balance in ABC's Prepaid Insurance account as of December 31, 2018? (just type numbers)
27000
The following financial information is from ABC. All debt is due within one year unless stated otherwise. Retained Earnings $52,000 Supplies 37,000 Equipment 72,000 Accounts Receivable 8,600 Deferred Revenue 6,000 Accounts Payable 15,000 Common Stock 25,000 Notes Payable (due in 18 months) 35,000 Interest Payable 7,000 Cash 22,400 What is the amount of current liabilities? (just type numbers)
28000
A company has the following transactions: Pay employees' salaries for the current period. Pay rent in advance. Pay dividends to stockholders in the current period. Receive (but do not pay) a utility bill. Use supplies previously purchased. How many of these transactions result in an expense being reported in the current period using accrual-basis accounting?
3
Consider the following account balances of ABC at the end of the year: Accounts Payable $4,400 Salaries Expense 12,800 Cash 1,700 Common Stock 2,400 Service Revenue 8,300 Supplies 4,300 Retained Earnings 1,100 Utilities Expense 5,000 How many of these accounts would appear in ABC's year-end Income Statement? 4 3 2 5
3
Consider the following list of accounts: Accounts Payable Cash Prepaid Rent Common Stock Salaries Payable Equipment Supplies Rent Expense How many of these accounts have a normal credit balance?
3
How many of the following transactions are operating activities? Borrowed $50,000 from the bank Purchased $12,000 in supplies Provide services to customers for $27,000 Paid the utility bill of $750 Purchased a delivery truck for $12,000 Received $25,000 from issuing common stock 2 1 4 3
3
How many of the following transactions would affect operating cash flows reported in the statement of cash flows (all transactions involve cash)? Borrowed $50,000 from the bank Purchased $12,000 in supplies Provide services to customers for $27,000 Paid the utility bill of $750 Purchased a delivery truck for $12,000 Received $25,000 from issuing common stock 2 4 1 3
3
How many types of Cash Flow are there on the Cash Flow statement? 1 3 2 4
3
Total change in cash = $40, Net operating cash flows = $20, Net investing cash flows = ($10) What is net financing cash flows = $ (just type numbers)
30
ABC had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; net income, $10,000.What is the amount of ABC's liabilities? (just type numbers)
30000
The following amounts are reported in the ledger of ABC: Assets $80,000 Liabilities 36,000 Retained Earnings 12,000 What is the balance in the Common Stock account? (just type numbers)
32000
DW has an ending Retained Earnings balance of $51,100. If during the year DW paid dividends of $4,300 and had net income of $22,500, then what was the beginning Retained Earnings balance? (If your number is 12,345 do not put in $ or commas, just type 12345)
32900
A company has 342 customers they extend credit to, how many accounts receivable will they have on their books? (just type numbers)
343
ABC paid dividends of:$2,500, $0, $1,500 and $2,000 over the first four years of the company's existence. If Retained Earnings after year four has an ending balance of $8,000, what is the average annual amount of net income (loss) over the past four years for ABC? (just type numbers)
3500
The Accounts Payable account has a beginning balance of $15,000 and the company purchased $40,000 of supplies on account during the month. The ending balance was $20,000. How much did the company pay to creditors during the month? (just type numbers)
35000
To the nearest %, paying on the 10th day for a 2/10, net/30, gives an annual return of )just write the number)
36
Given the following, stockholders' claims to the company's resources amount to: (If your number is 12,345 do not put in $ or commas, just type 12345) Assets $1,200,000 Liabilities $800,000 Net income $100,000 Retained earnings $250,00
400000
Accounts Payable $4,400 Salaries Expense 12,800 Cash 1,700 Common Stock 2,400 Service Revenue 8,300 Supplies 4,300 Retained Earnings 1,100 Utilities Expense 5,000 How many of these accounts would appear in a year-end balance sheet?
5
Consider the following account balances of ABC at the end of the year: Accounts Payable $4,400 Salaries Expense 12,800 Cash 1,700 Common Stock 2,400 Service Revenue 8,300 Supplies 4,300 Retained Earnings 1,100 Utilities Expense 5,000 How many of these accounts would appear in ABC's year-end balance sheet? 5 3 4 2
5
Cash Retained Earnings Service Revenue Utilities Expense Salaries Expense AccountsReceivable Accounts Payable Common Stock Equipment Dividends How many of the above accounts have a normal debit balance?
6
Consider the following list of accounts: Cash Retained Earnings Service Revenue Utilities Expense Salaries Expense AccountsReceivable Accounts PayableCommon Stock Equipment Dividends How many of these accounts have a normal debit balance? 5 6 4 7
6
Net credit sales $120,000 Average accounts receivable 20,000 Cash collections on credit sales 100,000 What is the receivables turnover ratio?
6
The following table contains financial information for ABC before closing entries: Cash $23,000 Common Stock 34,000 Supplies 4,000 Advertising Expense 2,000 Accounts Payable 20,000 Service Revenue 30,000 Salaries Expense 3,000 Prepaid Rent 4,000 Dividends 3,000 Equipment 45,000 How many of the above accounts are permanent? 5 6 3 4
6
ABC reports the following information for the year: Net credit sales $120,000 Average accounts receivable 20,000 Cash collections on credit sales 100,000 What is ABC's receivables turnover ratio?
6.0
The Accounts Receivable account has a beginning balance of $20,000 and the company provides services of $70,000 on account during the month. The ending balance was $21,000. How much did the company receive from customers during the month? (just type numbers)
69000
Calculate net income: (just type numbers)Revenues $10,000 Liabilities $5,000 Expenses $3,000 Assets $19,000 Dividends $4,000
7000
ABC had the following net income (loss) the first three years of operation: $7,000, ($1,600), and $3,600. If the Retained Earnings balance at the end of year three is $1,000, what was the total amount of dividends paid over these three years? (just type numbers)
8000
The following table contains financial information for ABC before closing entries: Cash $12,000 Supplies 4,500 Prepaid Rent 2,000 Salaries Expense 4,500 Equipment 65,000 Service Revenue 30,000 Miscellaneous Expenses 20,000 Dividends 3,000 Accounts Payable 5,000 Common Stock 68,000 Retained Earnings 8,000 What is the amount of ABC's total assets? (just type numbers)
83500
On January 1, ABC started the year with a $400,000 balance in Retained Earnings and a $550,000 balance in Common Stock. During the year, the company reported net loss of $25,000, paid a dividend of $15,000, and issued more common stock for $30,500. What is total stockholders' equity at the end of the year? (just type numbers)
940500
On March 3, ABC purchased a desk for $450 on account. On March 22, ABC purchased another desk for $500 also on account, and then on March 24, ABC paid $400 on account. At the end of March, what amount should ABC report for desks (assuming these two desks were the only desks they had)? (just type numbers)
950
The two groups who have claims on the Assets in a business are (3 words, second word is and) creditors and owners
creditors and owners
When a company collects sales tax from a customer, the event is recorded with a(n) _________ in Cash and a(n) _________ in Sales Tax Payable: decrease; increase decrease; decrease increase; decrease increase; increase
increase; increase
The definition of a liability is: something we ___________
owe
One of the three conditions for an asset is that the business __________ the asset
owns
Usually we pick up Income at: point of sale at collection at purchase of inventory
point of sale
When writing a journal entry, it is traditional to put the Credits on top. put the Debits on top. There is no particular order
put the Debits on top.
If everything is in balance all account balances must be correct some account balances may be wrong
some account balances may be wrong
A company has 12,247 customers they extend credit to, they will have 12,247 __________________ accounts.
subsidiary
In a sale on account, who is undertaking a financial risk of non-payment?
the seller
If someone subscribes to a magazine, on the company books, which liability account goes up?
unearned revenue
Current Assets are Assets that will be gone by the end of the ____________
year
In the lecture what is the Benefit value of the Pen? It depends on the reporting method used $8 $3 $5
$8
The marketing department is involved in which step (1,2,3,4 or 5) in the Operating cycle?
2
The ending Retained Earnings balance of ABC decreased by $1.5 million from the beginning of the year. The company declared a dividend of $4.4 million during the year. What was the net income for the year?
2.9
In Cash Flow Reporting: what is the income at the time of collection of the A/R? $0 It depends on the measuring system $8 Loss of $5 $3
$8
In the lecture what is the Benefit value of the A/R? $5 It depends on the reporting method used $8 $3
$8
If the liabilities of a company increased by $55,000 during a month and the stockholders' equity decreased by $21,000 during that same month, did assets increase or decrease and by how much? $34,000 increase. $55,000 increase. $34,000 decrease. $76,000 increase.
$34,000 increase.
ABC buys widgets for $5 cash and sells them on account for $8. What is the sacrifice value of a receivable on the books of ABC?
$5
ABC buys widgets for $5 cash and sells them on account for $8. What is the sacrifice value of a widget on the books of ABC?
$5
In the lecture what is the Sacrifice value of the A/R? $8 $3 $5 It depends on the reporting method used
$5
In the lecture what is the Sacrifice value of the Pen? $3 $8 $5 It depends on the reporting method used
$5
We always sell pens at $8. We sold a pen for $7 because it was damaged. Record the sale at:
$7
ABC buys widgets for $5 cash and sells them on account for $8. What is the benefit value of a receivable on the books of ABC?
$8
Assume that ABC had a retained earnings balance of $10,000 on April 1, and that the company had the following transactions during April. Issued common stock for cash, $5,000. Provided services to customers on account, $2,000. Provided services to customers in exchange for cash, $900. Purchased equipment and paid cash, $4,300. Paid April rent, $800. Paid employees' salaries for April, $700. What was ABC's retained earnings balance at the end of April? (If your number is 12,345 do not put in $ or commas, just type 12345)
11400
To the nearest %, paying on the 30th day for a 1/30, net/60, gives an annual return of (just write the number)
12
A company has 12,247 customers they extend credit to, how many total A/R will they have (just type the number, no commas)?
12248
Following are transactions of ABC, a new company, during the month of January: Issued 10,000 shares of common stock for $15,000 cash. Purchased land for $12,000, signing a note payable for the full amount. Purchased office equipment for $1,200 cash. Received cash of $14,000 for services provided to customers during the month. Purchased $300 of office supplies on account. Paid employees $10,000 for their first month's salaries. What was the total amount of ABC's liabilities following these six transactions? (just type numbers)
12300
ABC has the following balances on December 31 prior to closing entries: Revenues $25,000 Retained Earnings, Jan. 1 20,000 Cash 3,000 Expenses 10,000 Accounts Payable 4,000 Dividends 2,000 Supplies 17,000 Based upon the balances above, what net adjustment would be made to Retained Earnings due to closing entries? An Increase of (just type numbers)
13000
At the beginning of the period, Accounts Receivable equals $1,700. At the end of the period, Accounts Receivable equals $2,200. If Service Revenue for the period equals $15,400, what was the cash received from customers for the period?
14900
ABC engages in the following cash payments: Purchase equipment $2,000 Pay rent 500 Repay loan to the bank 5,000 Pay worker's salaries 1,000 What is the total amount of cash paid for operating activities? (just type numbers)
1500
For the past four years, ABC reported the following annual net income and dividend amounts: Year Net Income Dividends 1 $22,000 $2,000 2 17,000 2,000 3 9,000 1,000 4 14,000 3,000 If ABC had Retained Earnings of $88,000 at the end of year 5, At the end of Year 4, Retained Earnings was $70,000. What was the company's Retained Earnings at the beginning of Year 1? (If your number is 12,345 do not put in $ or commas, just type 12345)
16000
What is the amount of current assets, assuming the accounts above reflect normal activity? (just type in numbers) Accounts Payable $12,000 Buildings 70,000 Cash 8,000 Accounts Receivable 7,000 Sales Tax Payable 5,000 Retained Earnings 47,000 Supplies 2,000 Notes Payable (due in 18 months) 35,000 Interest Payable 3,000 Common Stock 45,000
17000
Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is the average collection period in days (rounded to the nearest whole day)?
18
ABC has the following information: Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is ABC's average collection period (rounded to the nearest whole day)?
18 Days
A company: Issued common stock for cash. Purchased equipment by signing a note payable. Paid rent for the current month. Collected cash from customers on account. How many of these four transactions increased the given company's total assets?
2
Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable. Paid rent for the current month. Collected cash from customers on account. How many of these four transactions increased the given company's total assets? 2 3 1 4
2
How many of the following events would require an expense to be recorded? Ordering office supplies Hiring a receptionist Paying employees' salaries for the current month Receiving but not paying a current utility bill Paying for insurance in advance
2
The adjusting entry required when amounts previously recorded as deferred revenues are earned by providing goods or services to customers includes:
A debit to a liability
The owner of an office building should report rent collected in advance as a debit to Cash and a credit to: Stockholders' equity. An asset other than Cash A liability Revenue
A liability
Which of the following is/are a sign that a company can quickly turn its receivables into cash (may have more than one answer)? A high average collection period. A low average collection period. A low receivables turnover ratio. A high receivables turnover ratio.
A low average collection period. A high receivables turnover ratio.
Which of the following is/are a sign that a company cannot quickly turn its receivables into cash (may have more than one answer)? A low receivables turnover ratio. A low average collection period. A high receivables turnover ratio. A high average collection period.
A low receivables turnover ratio. A high average collection period.
Define Articulation (no credit, but very important)
A number that appears in more than one statement will always be the same
ABC reports a receivables turnover ratio of 14.5. The industry average is 10.7. What most likely is causing this difference?
ABC has effective procedures related to selling goods on account.
After the Second STEP in the Operating Cycle the firm has an?
Account Receivable
The Trueblood Criterion is used by Accountants Managers When Reporting to the IRS Managers Reporting to the Public Internal Management Reports (managerial accounting)
Accountants
Which of the following accounts would normally have a credit balance? Cash, Repairs and Maintenance Expense, Dividends. Accounts Payable, Service Revenue, Common Stock. Income Tax Payable, Service Revenue, Dividends. Salaries Payable, Deferred Revenue, Delivery Expense.
Accounts Payable, Service Revenue, Common Stock.
Receiving a utility bill for costs in the current period but delaying payment until the following period is an example of a(n): Prepaid expense. Accrued revenue. Accrued expense. Deferred revenue
Accrued expense.
Financial Accounting is done for whom Actual Investors Potential Investors Actual Creditors Potential Creditors the IRS Internal Managers
Actual Investors Potential Investors Actual Creditors Potential Creditors
Which of the following are made ONLY at year end Transaction Entries Adjusting Entries Closing Entries
Adjusting Entries Closing Entries
Which of the following are made BEFORE we start preparing the financial statements? (This question may have multiple answers) Closing Entries Adjusting Entries Transaction Entries
Adjusting Entries Transaction Entries
When you are developing an entry Always do the simple parts first. Always do the Debits first.
Always do the simple parts first.
Define "Big Bath", note this question will not be graded but it is very important.
An accounting technique to make loss seem larger
Subsidiary Accounts and Master Accounts
Are bookkeeping devices
Prepaid Rent is what kind of account? Liability Asset Revenue Dividends Expense
Asset
ABC purchases inventory for $2,000 and incurs shipping costs of $100 for the goods to be delivered. To record this transaction, the company debits Inventory for $2,000, debits Selling Expenses for $100, and credits Cash for $2,100. Which of the following statements is correct?
Assets are understated
In the Allowance Method when we do the year end adjusting entry for Bad Debts
Assets decrease, Net Income decreases
On September 30, ABC paid employee salaries of $7,000, including $1,000 it owed to its employees last month. What are the effects of this transaction on the accounting equation? Assets decreased, liabilities decreased, and expenses increased Expenses increased, liabilities increased, and assets increased. Expenses decreased, liabilities decreased, and assets decreased. Assets decreased, expenses decreased, and liabilities increased Assets increased, expenses increased, and liabilities decreased.
Assets decreased, liabilities decreased, and expenses increased
On September 30, ABC Co. paid employee salaries of $7,000, including $1,000 it owed to its employees last month. What are the effects of this transaction on the accounting equation? Assets decreased, expenses decreased, and liabilities increased. Expenses decreased, liabilities decreased, and assets decreased. Assets decreased, liabilities decreased, and expenses increased. Assets increased, expenses increased, and liabilities decreased. Expenses increased, liabilities increased, and assets increased.
Assets decreased, liabilities decreased, and expenses increased.
When a company provides services on account, the accounting equation would be affected as follows: Assets increase and liabilities decrease. Assets increase. Assets increase and stockholders' equity increases. Revenues increase.
Assets increase and stockholders' equity increases.
In the Allowance Method when a receivable is resurrected
Assets stay the same, Net Income stays the same.
In the Allowance Method when we collect on a previously written off receivable
Assets stay the same, Net Income stays the same.
In the Allowance Method when we write off a receivable
Assets stay the same, Net Income stays the same.
An alternative form of the accounting equation is: Net Income = Revenues − Expenses. Assets − Liabilities = Stockholders' Equity. Assets = Liabilities − Stockholders' Equity. Stockholders' Equity = Assets + Liabilities.
Assets − Liabilities = Stockholders' Equity.
Which of the accounts are increased with a debit and decreased with a credit? Dividends, liabilities, and assets. Liabilities, stockholders' equity, and revenues. Assets, dividends, and expenses. Expenses, dividends, and stockholders' equity.
Assets, dividends, and expenses.
A company orders office supplies in June. Those supplies are received and paid for in July. The supplies are used in August. In which month should the company record supplies expense?
August
Assume that cash is paid for rent to cover the next year. The appropriate debit and credit are: Debit Cash, credit Prepaid Rent. Debit Prepaid Rent, credit Cash. Debit Prepaid Rent, credit Rent Expense. Debit Rent Expense, credit Cash.
Debit Prepaid Rent, credit Cash.
At the beginning of December, ABC had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry? Debit Supplies $4,200, credit Supplies Expense $4,200. Debit Cash $4,200, credit Supplies $4,200. Debit Cash $800, credit Supplies $800. Debit Supplies Expense $4,200, credit Supplies $4,200.
Debit Supplies Expense $4,200, credit Supplies $4,200.
When writing formal journal entries Credits are on top, Debits are on the bottom Debits are on top, Credits are on the bottom There is no required ordering of Debits and Credits
Debits are on top, Credits are on the bottom
ABC estimates uncollectible accounts based on the percentage of accounts receivable. What effect will recording the estimate of uncollectible accounts have on the accounting equation?
Decrease assets and decrease stockholders' equity.
When the company pays stockholders a dividend, what is the effect on the accounting equation for that company? Increase liabilities and increase assets. Decrease assets and decrease liabilities. Decrease assets and decrease stockholders' equity. Decrease stockholders' equity and increase assets.
Decrease assets and decrease stockholders' equity.
Which of the following is possible for a particular business transaction? Increase assets; Decrease liabilities Decrease assets; Increase assets Decrease assets; Increase stockholders' equity Decrease liabilities; Increase expenses
Decrease assets; Increase assets
In Purchase or Manufacture in the operating cycle, what happens to cash? Increases It Depends Decreases Stays the Same
Decreases
In the lecture, when there is a Purchase or Manufacture in the operating cycle, what happens to cash? Increases It Depends Decreases Stays the Same
Decreases
When a magazine sells one-year subscriptions to customers but receives the full amount of cash immediately, it is an example of a(n):
Deferred Revenue
Receiving cash from customers before services are performed results in:
Deferred Revenues
In a Balanced set of Accounting Records, EVERY Account must balance
False
The Income Statement always balances.
False
The Income Statement always balances. False True
False
The Statement of Cash Flows always balances.
False
Define GAAP (4 words)
Generally accepted accounting principles
The following statements pertain to recording transactions. Which of them are true? Total debits should equal total credits. It is possible to have multiple debits or credits in one journal entry. Assets are always listed first in journal entries. Some journal entries will have debits only.
I and II
ABC buys widgets for $5 cash and sells them on account for $8. At the point of sale, what is the effect on the net income of ABC? Decrease $5 Increase $3 No effect Increase $8
Increase $3
The Change in the Bathtub equals (3 words)
Increase Minus Decrease
During Collection in the operating cycle, what happens to cash? Stays the Same Decreases Increases It Depends
Increases
Managerial Accounting is done for whom Actual InvestorsActual Investors Potential InvestorsPotential Investors Actual CreditorsActual Creditors Potential CreditorsPotential Creditors the IRS Internal Managers
Internal Managers
Which of the following events would require an expense to be recorded (may have more than one answer)? Ordering office supplies. Paying employees' salaries for the current month. Hiring a receptionist. Paying for insurance in advance. Receiving but not paying a current utility bill
Paying employees' salaries for the current month. Receiving but not paying a current utility bill
Define Outsourcing (this will not be graded, but it is very important)
Paying other people/companies not employed by the company to do work for the company
An example of an adjusting entry would not include: Recording the expiration of prepaid insurance. Recording the use of office supplies. Paying salaries to company employees. Recording unpaid salaries.
Paying salaries to company employees.
Below is the company's Cash T-account. Cash Beg. 1,200 5,200 3,100 End. 3,300 The $3,100 amount could represent which of the following? Collection from customers. Payment for salaries. Purchase of supplies on account. Ending balance of cash.
Payment for salaries.
Which of the following is true? Periodic Inventory Accounting is more expensive to maintain than Perpetual Inventory Accounting There is no difference between the expense of using Periodic Inventory Accounting versus Perpetual Inventory Accounting Periodic Inventory Accounting is less expensive to maintain than Perpetual Inventory Accounting
Periodic Inventory Accounting is less expensive to maintain than Perpetual Inventory Accounting
In the allowance method Accountants have to do what to Report the Past (3 words)?
Predict the Future
Of the following, the most important objective for financial accounting is to provide information useful for: Increasing future profits Providing accountability Determining taxable income Predicting cash flows
Predicting cash flows
Of the following, the most important objective for financial accounting is to provide information useful for: Providing accountability. Determining taxable income. Predicting cash flows Increasing future profits
Predicting cash flows
Which of the following transactions would cause an increase in both the assets and liabilities of a company? Pay for inventory purchased 90 days ago. Paying for the current month's rent. Purchase of a building by issuing a note payable. Services received on account.
Purchase of a building by issuing a note payable.
Which of the following would increase assets and increase liabilities? Pay dividends to stockholders. Purchase office supplies on account. Provide services to customers on account. Receive a utility bill but do not pay it immediately.
Purchase office supplies on account.
Which of these transactions increased the given company's total liabilities (may have more than one answer)? Purchased equipment by signing a note payable. Issued common stock for cash. Provided services to customers on account. Collected cash from customers on account.
Purchased equipment by signing a note payable.
Which of these transactions increased the given company's total assets (may have more than one answer)? Purchased equipment by signing a note payable. Issued common stock for cash. Paid rent for the current month. Collected cash from customers on account.
Purchased equipment by signing a note payable. Issued common stock for cash.
After the 2nd step in the Operating Cycle, the firm has? Inventory Cash Receivable
Receivable
When a company makes an end-of-period adjusting entry that includes a credit to Prepaid Rent, the debit is usually made to Rent Expense Rent Receivable. Rent Payable. Cash
Rent Expense
One of the conditions of an asset is that it must have ___________ _______________
future value
In a Big Bath, a firm increases Expenses increases revenue does window dressing changes accounting firms
increases Expenses
Calculating the Allowance for Bad Debts at the end of the year
is an APPROXIMATE procedure.
A company has 12,247 customers they extend credit to, they will have 1 ______________ A/R account.
master
One of the three condition of an asset is that an accountant can _____________ the asset.
measure
Financial Accounting in 3 words (second word is and)
measure and communicate
Allocation is primarily as issue in measuring income measuring assets
measuring income
