ACC
Which of the following is true of internal control?
One of the major purposes of internal control is to ensure that the assets are safeguarded.
Which of the following is a method to generate cash from accounts receivable?
Pledging Yes; Factoring Yes
The correct order of the following steps of the accounting cycle is:
Posting, adjusting, closing, reversing
Please answer Questions 25 and 26 by using the following information: XYZ Co. had 500 calculators on hand on 11/1/2018. Purchases and sales during the month of November were as follows: (Perpetual inventory system has been applied.) 11/1: Beginning Balace 500 units ($3.5 per unit); 11/8: Sold 350 units; 11/13: Purchased 300 units ($4 per unit); 11/21: Purchased 200 units ($5 per unit); 11/28: Sold 150 units. How much is the ending inventory at 11/30/2018 under LIFO?
$1,975
XYZ Co. had 500 calculators on hand on 11/1/2011. Purchases and sales during the month of November were as follows: (Perpetual inventory system has been applied.) Date Transaction 11/1 Balance 11/8 Sale 11/13 Purchase 11/21 Purchase 11/28 Sale Units 500 $3.5 350300 $4 200 $5 150 How much is the ending inventory at 11/30/2011 under LIFO?
$1,975
The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense. The company's management estimates that 4% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $250,000. What is the amount of Bad Debts Expense reported on the income statement for 2019?
$10,000
Server Solutions paid $209,000 to acquire Tabletz, Inc., an electronic gadget-advertising website. At the time of the acquisition, Tabletz's balance sheet reported total assets of $209,000 and liabilities of $104,500. The fair market value of Tabletz's assets was $209,000. The fair market value of its liabilities was $104,500. How much goodwill did Server Solutions purchase as part of the acquisition of Tabletz?
$104,500
Brad's gross pay for the month is $15,400. His deduction for federal income tax is based on a rate of 18%. He has no voluntary deductions. His year-to-date pay is under the limit for OASDI. What is Brad's net pay? (Assume a FICA—OASDI Tax of 6.2% and FICA—Medicare Tax of 1.45%. Do not round any intermediate calculations, and round your final answer to the nearest dollar.)
$11,450
The balances of select accounts of Sandra, Inc. as of December 31, 2016 are given below: Building $140,000 Cash 8,000 Office Supplies 1,100 Furniture 5,000 Prepaid Insurance 450 Accumulated Depreciation—Furniture $3,000 Land 32,000 Accumulated Depreciation—Building 4,700 Accounts Receivable 2,300 The insurance has been prepaid until June 30, 2017. Determine the amount of total current assets reported on the balance sheet.
$11,850
A company purchased 500 units for $30 each on January 31. It purchased 550 units for $33 each on February 28. It sold a total of 650 units for $45 each from March 1 through December 31. What is the cost of ending inventory on December 31 if the company uses the first-in, first-out (FIFO) inventory costing method? (Assume that the company uses a perpetual inventory system.)
$13,200
The following information relates to Sports Bikes, Inc. Calculate the operating income. Net Sales Revenue $216,000 Cost of Goods Sold 160,000 Interest Revenue 10,000 Operating Expenses 40,000
$16,000
The account title used for recording the payment of rent in advance for an office building is ________.
Prepaid Rent
In a perpetual inventory system that uses the weighted average cost flow method, the beginning inventory is the
total goods available for sale minus the net purchases.
A company reports net accounts receivable of $152,000 on its December 31, 2019 balance sheet. The Allowance for Bad Debts has a credit balance of $19,000. What is the balance of Accounts Receivable?
$171,000
The following is the adjusted trial balance for Becker Photography.
$175,800
At 1/1/2020, ABC had a credit balance of $325 in its allowance for uncollectible accounts. Based on past experience, 2% of ABC's credit sales have been uncollectible. During 2016, ABCF wrote off $325 of accounts receivable. Credit sales for 2020 were 9,000. In its 12/31/2020, balance sheet, what amount should ABC report as allowance for uncollectible accounts?
$180
How much is the ending inventory at 11/30/2018 under FIFO?
$2,200
Server Solutions paid $209,000 to acquire Tabletz, Inc., an electronic gadget-advertising website. At the time of the acquisition, Tabletz's balance sheet reported total assets of $209,000 and liabilities of $104,500. The fair market value of Tabletz's assets was $209,000. The fair market value of its liabilities was $209,000. How much goodwill did Server Solutions purchase as part of the acquisition of Tabletz?
$209,000
XYZ Corp. uses the allowance method (Income Statement approach) for bad debts. During 2020 XYZ charged $25.2 to bad debt expense, and wrote off $30 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of
$25.2
On July 7, University Bank lent $560,000 to Jazz Music Shop on a 60 day, 7% note. What is the maturity value of the note? (Use a 360-day year and round answers to the nearest dollar.)
$566,533
ABC Company's accounts at 6/30/2018, included the following unadjusted balances: Merchandise Inventory $ 8; Cost of Goods Sold $37; Sales Revenue $75; Sales Discounts $ 3; Sales Returns and Allowances $ 2. The cost associated with the physical count of inventory on hand on June 30, 2018, was $3. How much should be the recorded gross profit on 6/30/2018?
$28
How much do you need to invest today so that you can have $46,000 six years from today? (Assume rate of return is 8% every year.)
$28,980
XYZ Corp. uses the allowance method (Income Statement approach) for bad debts. During 2018 XYZ charged $25.2 to bad debt expense, and wrote off $30 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of
$30
Crackling Fried Chicken bought equipment on January 1 2016, for $21,000. The equipment was expected to remain in service for four years and to perform 3,600 fry jobs. At the end of the equipment's useful life, Crackling's estimates that its residual value will be $3,000. The equipment performed 360 jobs the first year, 1,080 the second year, 1,440 the third, and 720 the fourth year. How much is the depreciation expense in year of 2016? (Straight-line Depreciation was adopted and FYE is 12/31.)
$4,500
A $49,000, six-month, 12% note payable was issued on December 1, 2018. What is the amount of accrued interest on December 31, 2018? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)
$490
A company purchased 300 units for $20 each on January 31. It purchased 200 units for $40 each on February 28. It sold a total of 250 units for $110 each from March 1 through December 31. If the company uses the last-in, first-out inventory costing method, calculate the cost of ending inventory on December 31. (Assume that the company uses a perpetual inventory system.)
$5,000
The ABC Company issues $517,000 of 11%, 10-year bonds at 104 on March 31, 2017. The bond pays interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. Calculate the net balance that will be reported for the bonds payable on the September 30, 2017 balance sheet.
$536,646
Dalton Delivery Service is hired on October 31, 2020 to perform services, beginning on November 1, 2020. The delivery services will be performed for six months at a rate of $3,000 per month. Dalton's fiscal year ends on December 31. What amount of service revenue should be recorded as an adjusting entry on December 31, 2020?
$6,000
The balance in the Bonds Payable account is a credit of $67,000. The balance in the Discount on Bonds Payable account is a debit of $3,350. What is the bond's carrying amount (i.e., Net Bonds Payable)?
$63,650
On December 31, 2017, Lopez Sales has a Bonds Payable balance of $72,000 and a Premium on Bonds Payable balance of $4,000. On the balance sheet, how will this information be shown?
$72,000 plus a premium of $4,000 for a net balance of $76,000
Stone's gross pay for the week is $1,600. Stone's year-to-date pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6% and that Stone's year-to-date pay has not yet exceeded the $7,000 cap. What is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state governments?
$96.00
Which account does a merchandiser use that a service company does not use?
(a) Cost of Goods Sold (b) Merchandise Inventory (c) Sales Revenue *(d) All of the above.
Accounting is the information system that
(a) measures business activities (b) communicates the results to decision makers (c) processes information into reports *(d) All of the above.
Use the following to calculate the acid-test (or quick ratio) ratio. (Round your answer to two decimal places.) Cash $130,000 Short-term investments 15,000 Net current receivables 280,000 Inventory 280,000 Total current liabilities 790,000
0.54
Please read your 2020 Walmart Annual Report to answer questions below. What's the Current Ratio of 1/31/2020 (choose the closest number)?
0.795
Phillips, Inc. had the following financial data for the year ended December 31, 2019. Cash $44,000 Cash equivalents 79,000 Long term investments 55,000 Total current liabilities 145,000 What is the cash ratio as of December 31, 2019, for Phillips, Inc.? (Round your answer to two decimal places.)
0.85
At year-end, ABC Inc. has current liability of $55,000, cash of $11,600, current account receivable of $48,900, merchandise inventory of $37,900, and prepaid expenses totaling $5,100. What's ABC's acid-test ratio (or quick ratio)?
1.1
Based on the following information for Montana Investments, Inc., compute the rate of return on total assets. (Round the percentage to two decimal places.) Total Assets, December 31, 2019 $191,000 Total Assets, December 31, 2018 $149,000 For Year Ended December 31, 2019: Interest Expense $15,000 Net Income $18,000
19.41%
How much is the ending inventory at 11/30/2011 under FIFO?
2,200
A ________ ownership in the investee's voting stock can significantly influence the investee's decisions.
20 percent to 50 percent
The measurement of cash on hand classified as CASH, EXCEPT:
3-month certificate of deposits (CDs)
The following contains information from the records of the Wellborn Engineers and Architects. Wellborn Engineers and Architects Selected Financial Information December 31, 2021 Current Assets $90,000 Current Liabilities 30,000 Long-Term Assets 95,000 Long-Term Liabilities 65,000 Total Revenues 50,000 Total Expenses 37,000 Calculate the current ratio. (Round your answer to two decimals.)
3.00
A company made net sales revenue of $500,000, and cost of goods sold totaled $300,000. Calculate its gross profit percentage.
40%
Which one is an internal document that helps summaries data for the preparation of financial statement?
A worksheet
The balances of select accounts of Stephanie, Inc. as of December 31, 2016 are given below.Debit Credit Building $100,000 Cash 8,000 Office Supplies 800 Furniture 6,000 Prepaid Insurance 500 Land 33,000 Accumulated Depreciation—Building 4,700 Accounts Receivable 4,000 What amount of total long-term assets would be shown on the balance sheet?
A. $100,000 B. $130,300 C. $133,000 D. $139,000 *E. None of the above.
The following information is from the 2019 records of Albert Book Shop: Accounts receivable, December 31, 2019 $48,000 (debit) Allowance for Bad Debts, December 31, 2019 prior to adjustment 2,000 (debit) Net credit sales for 2019 179,000 Accounts written off as uncollectible during 2017 17,000 Cash sales during 2019 29,000 Bad debts expense is estimated by the income statement method. Management estimates that 2% of net credit sales will be uncollectible for the year of 2019. Calculate the amount of bad debts expense for 2019.
A. $6,900 B. $7,100 C. $3,100 D. $5,350 *E. none of the above.
On December 1, 2017, Archangel Services issued $313,000 of eight-year bonds with a stated rate of 12% at par. Interest payments occur each April 30 and October 31. On December 31, 2017, Archangel made an adjusting entry to accrue interest at year-end. What is the amount of Interest Expense that will be recorded on December 31, 2017?
A. $37,560 B. $6,260 C. $18,780 D. $783 *E. none of the above
A Plus Appliances sells dishwashers with a four-year warranty. In 2019, sales revenue for dishwashers is $94,000. The company estimates warranty expense at 4.5% of revenues. What is the total estimated warranty payable of A Plus Appliances as of December 31, 2019? A Plus Appliances began operating in 2019. (Round your final answer to the nearest dollar.)
A. $4320 B. $1058 C. $1548 D. $3318 *E. none of the above.
At 1/1/2018, ABC had a credit balance of $325 in its allowance for uncollectible accounts. Based on past experience, 2% of ABC's credit sales have been uncollectible. During 2018, ABCF wrote off $325 of accounts receivable. Credit sales for 2018 were 9,000. In its 12/31/2018, balance sheet, what amount should ABC report as allowance for uncollectible accounts?
A. $440 B. $245 C. $325 D. $115 *E. none of the above.
The following information is available for XYZ Company for the current year: [net sales $1,800, freight-in $45, purchase discount $25, ending inventory $240] The gross margin is 30% of net sales. What is the cost of good available for sale?
A. $840 B. $1,380 C. $960 D. $1,220 *E. none of the above.
At year-end, ABC Inc. has current liability of $55,000, cash of $11,600, current account receivable of $54,400, merchandise inventory of $37,900, and prepaid expenses totaling $5,100. What's ABC's acid-test ratio (or quick ratio)?
A. 0.21 B. 1.76 C. 1.1 D. cannot be determined *E. none of the above.
The correct order of the following steps of the accounting cycle is:
A. Posting, adjusting, reversing, closing B. Posting, closing, adjusting, reversing C. Posting, reversing, adjusting, closing D. Adjusting, posting, closing, reversing *E. none of the above.
When a company uses the perpetual inventory method, which of the following would be the entry to adjust inventory to lower-of-cost-or-market?
A. debit Loss on Inventory and credit Merchandise Inventory B. debit Inventory Adjustment and credit Merchandise Inventory C. debit Merchandise Inventory and credit Inventory Adjustment D. debit Merchandise Inventory and credit Cost of Goods Sold *E. none of the above.
ABC Corporation records business transactions in dollars and disregards changes in the value of a dollar over time. Which of the following accounting assumptions does this represent?
A. economic entity assumption B. going concern assumption C. accounting period assumption D. conservatism assumption *E. none of the above.
On July 1, 2017, Miniature Company has bonds with balances as shown below: Bonds Payable $70,000 (credit balance) and Discount on Bonds Payable $3,600 (debit balance) If the company retires the bonds for $70,000, what will be the effect on the income statement?
A. loss on retirement of $4,750 B. gain on retirement of $4,750 C. sales revenue of $66,400 D. no effect on net income *E. none of the above
The measurement of cash on hand classified as CASH, EXCEPT:
A. personal checks B. petty cash C. negotiable checks D. unrestricted funds on deposit with a bank *E. none of the above (i.e., all are considered as Cash).
The correct order of the following steps of the accounting cycle is
A. posting, closing, adjusting, reversing B. closing, adjusting, posting, reversing C. reversing, Posting, closing, adjusting D. posting, adjusting, reversing, closing *E. none of the above.
Which organization below is the professional organization for all CPAs in the United States:
AICPA
Which of the following is provided in a typical chart of accounts?
Account number
Which of the following is a liability account?
Accounts Payable
Which of the following is an asset account?
Accounts Receivable
Which of the following account's balance is carried forward to the next accounting period?
Accumulated Depreciation
Accounting is the information system that
All of the above (A. measures business activities B. communicates the results to decision makers C. processes information into reports)
Which firm is not one of the so-called "Big Four" today?
Arthur Andersen
Prepaid Rent is an account of
Asset
Please see the attached 2020 annual report of Walmart to answer Questions 31-35. What method was used to measure the historical cost of ending inventory on the balance sheet?
Both FIFO and LIFO
Which of the following is a method to generate cash from accounts receivable?
Both Pledge and Factor
Please see the attached 2020 annual report of Walmart to answer Questions 31-35. Walmart's PPE was presented
By nature only
Which of the following illustrates the internal control procedure—separation of duties?
Cashiers must not have access to accounting records.
Which of the following line items will appear on the income statement of a merchandiser but not of a service company?
Cost of Goods Sold
Inventories is part of
Current Asset
What's current ratio?
Current Assets / Current Liabilities
On 1/31/2016, a company prepaid the $72 rental fee for a parking lot it leases. The rental fee covered a 3-year period beginning 3/1/2016. What is the effect of this transaction on the 12/31/2016 financial statements for each of the following?
Current expenses: $20 prepaid expenses: $52
ABC business purchased equipment for $140,000 on January 1, 2017. The equipment will be depreciated over the five years of its estimated useful life using the straight-line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on equipment for the year 2017? (Assume the residual value of the acquired equipment to be zero.)
Debit $28,000 to Depreciation Expense—Equipment, and credit $28,000 to Accumulated Depreciation—Equipment.
A company that uses the perpetual inventory system sold goods to a customer on account for $4,000. The cost of the goods sold was $2,000. Which of the following journal entries correctly records this transaction?
Debit (Accounts Receivable $4,000 and Cost of Goods Sold $2,000) and Credit (Sales Revenue $4,000 and Merchandise Inventory $2,000)
Landon Jewelers uses the perpetual inventory system. On April 2, Landon sold merchandise with a cost of $2,500 for $7,000 to a customer on account with terms of 3/15, n/30. The journal entry to record the cost of goods sold would be: Receivable $2,500)
Debit (Cost of Goods Sold $2,500) and Credit (Merchandise Inventory $2,500)
How should you record a capital expenditure?
Debit an asset
How should you record a revenue expenditure?
Debit an expense
Which of the following is the correct formula to calculate the debt ratio?
Debt ratio = Total liabilities / Total assets
Which of the following accounts decreases with a debit?
Notes Payable
Which of the following accounts will be closed by debiting to the Income Summary account (i.e., which one below will be on credit side on closing journal entry)?
Depreciation Expense
The "Consolidated" name on Consolidated Balance Sheet is based on:
Economic Entity assumption
GAAP is currently formulated by the
FASB
U.S. GAAP is currently formulated by the
FASB
It is mandatory for both the employer and employee to pay ________.
FICA
In a period of inflation, the inventory method which tends to give the highest reported net income is
FIFO
Which inventory costing method assigns to ending merchandise inventory the newest - the most recent - costs incurred during the period?
FIFO
Neutrality is an ingredient of:
Faithful Representation
Predictive value is an ingredient of:
Faithful Representation: No Relevance: Yes
Which of the following is the correct order of subtotals that appear on a multi-step income statement?
Gross profit, Operating income, Net income
Which of the following is the correct formula to calculate inventory turnover?
Inventory turnover = Cost of goods sold / Average merchandise inventory
Which of the following is true of the Premium on Bonds Payable account?
It is added to the Bonds Payable balance and shown with long-term liabilities on the balance sheet.
Please see the attached 2020 annual report of Walmart to answer Questions 31-35. What method was used to measure the ending inventory on the balance sheet?
LCM
In a period of deflation, the inventory method that tends to give the highest reported net income is
LIFO
Which of the following is the record holding all the accounts, the changes in those accounts, and their balances?
Ledger
Unearned Revenue is an account of
Liability
Sinking funds, to be used for construction in 5 years is part of
Long-term Investment
Which statement/report below clearly shows that U.S. GAAP was followed by Walmart? (Please choose the best answer.)
Report of Independent Registered Public Accounting Firm
The net income of Harriet, Inc. for the year is $35,000. The dividends declared during the year were $43,000. Which of the following statements is true?
Retained Earnings account decreases by $8,000.
Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?
Salaries Payable
________ are equity securities in which the investor owns between 20% and 50% of the investee's voting stock.
Significant influence investments
The times-interest-earned ratios of four companies are given below: (a) Forge Corporation 8.9, (b) Fellow, Incorporation 9.2, (c) Stacy Corporation 9.2, and (d) Bennett, Incorporation 13.5. Which of the above companies has the lowest debt-paying ability?
Stacy Corp.
"Dividend Distributed" can be found in?
Statement of Shareholders' Equity
Which statement below that you can find information presented in Statement of Retained Earnings?
Statement of Shareholders' Equity
"Dividends (distributed)" can be found in?
Statement of Shareholders' Equity.
Which statement below is not required to disclose by FASB?
Statement of retained earnings
The major sources of U.S. generally accepted accounting principles are
The Codification Database of the FASB.
If a bond's stated interest rate is lower than the market rate, which of the following is true?
The bond will be issued at a discount.
A contingency was evaluated at year-end. Management felt it was probable that this would become an actual liability and the amount could be reasonably estimated. If this was not reported on the balance sheet or in the notes to the financial statements, what is the effect on the financial reporting of the company?
The liabilities on the balance sheet would be understated.
The accountant for Jones Auto Repair, Inc. failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is an effect of this omission?
The net income will be overstated.
Which of the following accounts would appear in the balance sheet credit column?
Unearned Revenue
Please see the attached 2020 annual report of Walmart to answer Questions 31-35. Is the accumulated depreciation of year 2020 larger than 2019?
Yes
Under the direct write-off method, the entry to write off an uncollectible account will include ________.
a debit to Bad Debts Expense account
Which of the following entries would be made to record the purchase of inventory on account, if a company uses the perpetual inventory system?
a debit to Merchandise Inventory and a credit to Accounts Payable
A check of $300,000, deposited by a company, was returned to the bank for nonsufficient funds. How would this information be included on the bank reconciliation?
a deduction on the book side
Under the equity method, dividend revenue is treated as ________.
a return of capital
The adjusted trial balance shows ________.
account balances after adjustments
An adjusting entry that debits Accounts Receivable is an example of a(n) ________.
accrued revenue
The sum of all the depreciation expense recorded to date for a depreciable asset is called ________.
accumulated depreciation
Which of the following is a permanent account?
accumulated depreciation
Which of the following is not a temporary account?
accumulated depreciation
Which of the following item will not appear in the Income Statement?
accumulated depreciation
A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on
aging the accounts receivable accounts
The detailed record of the changes in a particular asset, liability, or stockholders' equity is called
an account
In reviewing a set of journal entries, you encounter an entry composed of a credit to interest payable and a debit to interest expense. The purpose of this journal entry is to record
an accrued expense
In reviewing a set of journal entries, you encounter an entry composed of a debit to interest expense and a credit to interest payable. The purpose of this journal entry is to record
an accrued expense
Cash received from a customer prior to delivery of the product is
an unearned revenue
Prepaid Rent is a(n) ________ account and has a normal ________ balance.
asset; debit
An adjusting entry is completed ________.
at the end of the accounting period
Which statement below provides financial position information of a firm?
balance sheet
A ________ is a document explaining the reasons for the difference between a depositor's Cash account in the ledger and the depositor's cash balance in its bank account.
bank reconciliation
If goods are sold on terms FOB shipping point, the ________.
buyer normally pays the transportation costs
Where should goods in transit that were recently sold/purchased f.o.b. shipping point be included in?
buyer's inventory
Accumulated Depreciation is an example of a
contra account
Accumulated Depreciation is a(n) ________ account and carries a normal ________ balance.
contra asset; credit
Realization is the
conversion of non cash resources or rights into cash or rights to cash
Realization is the
conversion of non-cash resources or rights into cash or rights to cash.
Which of the following is a temporary account?
cost of Goods Sold
All of the following items would appear on the balance sheet except:
cost of goods sold
Gross profit is calculated as the difference between net sales revenue and ________.
cost of goods sold
What's the normal balance of Retained Earnings?
credit balance
Unearned revenue, for services to be performed in six months, appears on the balance sheet as ________.
current liabilities
Which of the following values is considered the market value when valuing inventory at lower-of-cost-or-market under U.S. GAAP?
current replacement cost
ABC Inc. made a $100 sale on account with the following terms: 10/15, n/30 on January 1, 2018. Which is the correct journal entry for the following transaction for ABC Inc.: Received full payment from custom on January 15, 2018.
debit (Cash $90 and Sales Discount $10) and credit (Accounts Receivable $100)
The bookkeeper of Wilson Electric Supply, Inc. recorded a $1,500 check as $15,000 in payment of the current month's rent. Which of the following journal entries is needed to adjust for this error in the books of the company?
debit Cash $13,500 and credit Rent Expense $13,500
When a company uses the perpetual inventory method, which of the following would be the entry to adjust inventory to lower-of-cost-or-market?
debit Cost of Goods Sold and credit Merchandise Inventory
Premier Services, Inc. pays $1,350,000 to acquire 38% of voting stock of Blue Investments, Inc. on March 5, 2019. Which of the following is the correct journal entry for the transaction?
debit Equity Investments-Blue Investments, Inc. $1,350,000 and credit Cash $1,350,000
Which of the following entries is necessary to close the appropriate depreciation account at the end of the year?
debit Income Summary and credit Depreciation Expense
Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?
debit Income Summary and credit Insurance Expense
Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?
debit Income Summary and credit Insurance Expense.
What's the normal balance of Dividends (distributed)?
debit balance
Trading debt investments include ________.
debt securities that the investor plans to sell in the very near future
Which of the following items are reconciling items on the bank side of the reconciliation?
deposit in transit and outstanding checks
Which one of the following items requires an adjustment on the bank side of the bank reconciliation?
deposits in transit
The terms of an invoice are 3/10, n/25. This means that a ________ of the invoice date.
discount of 3 percent is allowed if the invoice is paid within 10 days after the invoice date
The times-interest-earned ratio is calculated as ________.
earnings before interest and tax divided by interest expense
Significant influence equity investments are reported as ________ on the balance sheet.
either current assets or long-term assets
One of the following items would require an adjusting entry after preparation of the bank reconciliation?
errors made on the books revealed by the bank reconciliation
According to the conceptual framework, free from errors is a characteristics of
faithful representation
Which of the following is required to be deducted from employees' paychecks?
federal income tax
Which of the following inventory costing methods uses the cost of the oldest purchases to compute the cost of goods sold?
first-in, first-out
Which of the following inventory costing methods yields the lowest cost of goods sold during a period of rising inventory costs?
first-in, first-out
A company ships goods to a customer and pays transportation costs. To the seller, the transportation costs are ________.
freight out
Please see the attached 2020 annual report of Walmart to answer Questions 31-35. Walmart's goodwill on the attached Balance Sheet is?
from purchase
A truck costs $50 when new and has accumulated depreciation of $35. ABC Company exchanges the truck for a new truck. The new truck has a market value of $60, and ABC pays cash of $40. Assume the exchange has commercial substance. What is the result of this exchange?
gain of $5
On July 1, 2017, Adams Company has bonds with balances as shown below: Bonds Payable $71,000 (credit balance) and Premium on Bonds Payable $3,800 (credit balance) If the company retires the bonds for $74,150, what will be the effect on the income statement?
gain on retirement of $650
As per the ________, the entity will remain in operation for the foreseeable future.
going concern assumption
Which of the following is not a temporary account?
goodwill
The Allowance for Bad Debts account ________.
holds the pool of "unknown" uncollectible accounts
An accrued expense is expense
incurred but not paid
An accrued revenue is revenue
incurred but not received
After completing bank reconciliation, for which of the following items would an adjusting entry be necessary?
interest collected by the bank on a note receivable
On the balance sheet of a retailer, the Merchandise Inventory account ________.
is included in the current assets section
The allowance method of accounting for uncollectible receivables ________.
is used to measure bad debts
For a company with significant uncollectible receivables, the direct write-off method is unsuitable because ________.
it violates the matching principle
Which of the following inventory costing methods uses the costs of the oldest purchases to calculate the value of the ending inventory?
last-in, first-out
Which one of the following account groups normally has a credit balance?
liabilities and revenues
On the Balance Sheet assets are arranged by
liquidity
Available-for-sale (AFS) debt investments that are expected to be held longer than a year are reported as ________.
long-term assets
Buildings, land, and equipment are classified as ________.
long-term assets
A company decides to ignore a very small error in its inventory balance. This is an example of the application of the ________.
materiality concept
ABC Corporation records business transactions in dollars and disregards changes in the value of a dollar over time. Which of the following accounting assumptions does this represent?
monetary unit assumption
Adjusting entries are needed to correctly measure the ________.
net income (loss) on the income statement
A truck costs $50 when new and has accumulated depreciation of $35. ABC Company exchanges the truck for a new truck. The new truck has a market value of $60, and ABC pays cash of $45. Assume the exchange has commercial substance. What is the result of this exchange?
no gain or loss
When a business factors its accounts receivables, the business ________.
no longer has to deal with the collection of the receivables from the customers
The following information is available for XYZ Company for the current year: [net sales $1,800, freight-in $45, purchase discount $25, ending inventory $120]The gross margin is 30% of net sales. What is the cost of good available for sale?
none of the above
A check for which a maker's bank account has inadequate money to pay the check is known as a(n) ________.
nonsufficient funds check
The time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash, is called the ________.
operating cycle
Unrealized holding gains or losses on trading debt investments are reported in the ________.
other income and (expenses) section of the income statement
ABC Company's beginning inventory at 1/1/2018 was overstated by $52, and its ending inventory was overstated by $26. As a result, ABC's cost of goods sold for 2018 was
overstated by $78
After completing bank reconciliation, for which of the following items would an adjusting entry be necessary?
principle/face value collected by the bank on a note receivable
Liquidity is a measure of how ________.
quickly an asset may be converted into cash
According to the conceptual framework, "confirmatory value" is a characteristic of
relevance
According to the conceptual framework, "predictive value" is a characteristic of
relevance
According to the conceptual framework, predictive value is a characteristics of
relevance
What form was used to prepare Balance Sheet?
report form.
An equity security ________.
represents stock ownership in another company and sometimes pays dividends
Which of the following item will not appear in the income statement?
retained earnings
Amounts earned from delivering goods or services to customers are called ________.
revenues
All of the following items would appear on the balance sheet except:
sales discount
Where should goods in transit that were recently sold/purchased f.o.b. destination be included in?
seller's inventory
As generally used, the term "net assets" represents
shareholders' equity
Which of the following inventory valuation methods should be used for unique items?
specific identification
Which method is used to compute amortization?
straight-line method
A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on
the accounts receivable accounts
When bonds are retired at maturity ________.
the carrying value always equals the face value
As generally used, the term "net assets" represents
total assets less total liabilities
In a periodic inventory system that uses the weighted average cost flow method, the beginning inventory is the sold
total cost of goods available for sale minus the net purchases
ABC Company's beginning inventory at 1/1/2011 was overstated by $26, and its ending inventory was overstated by $52. As a result, ABC's cost of goods sold for 2011 was
understated by $26
Which of the following account is a liability account
unearned revenue
Which of the following is a permanent account?
unearned revenue
Which method is used to compute depletion?
units-of-production method
An internal document that helps summarize data for the preparation of financial statements is called a ________.
worksheet
