ACC CHP 1-4

Which of the following is not a true statement?

Benchmarking analysis involves comparing a company's rations over time. (Benchmarking analysis involves complying a company to its industry's averages, Benchmarking analysis involves complying a company to its competitors, Trend analysis involves comparing a company's ratio over time.)

The purchase of $500 of supplies on account will:

Increase both assets and liabilities by $500

If assets increase by $100 and liabilities decrease by $30, stockholders' equity must:

Increase by $130

Kelly Corporation received an advanced payment of $20,000 in 2015 from Rufus Company for consulting services. Kelly performed half of the consulting in 2015 and the remained in 2016. Kelly reports using the accrual basis of accounting, Ho much revenue from this consulting project will Kelly report in 2015.

$10,000

The ending balance of the Accounts Receivable account was $12,000. Services billed to customers for the period were $21,500, and collections on account from customer were $23,600. What was the beginning balance of Accounts Receivable?

$14,100

The beginning and ending balances of retained earnings for the year were $30,000 and $35,000, respectively, If yearly dividends totaled $3,000, what was the net income or net loss for the year.

$2,000 Net Income

During 2016, Duncan Company's total assets increased $50,000, and total liabilities decreased $30,000. During the same year, the company's investors invested an additional $60,000 and the company paid dividends of $30,000.What must have been the company's net income for 2016?

$50,000

If assets total $90,000 and liabilities $50,000, how much are net assets?

40,000

On June 1, 2016 Oma Schulze received $7,200 as advance payment for 12 months' advertising. The receipt was recorded as a credit to Unearned Fees. What adjusting entry is required on December 31, 2016.

7200*7/12 Unearned Fees of 4200 Advertising revenue of 4200

A journal entry that contains more than just two accounts is called:

A compound journal entry

Posting refers to the process of transferring information from:

A journal to the general ledger accounts

A merchandising company's multi-step income statements differs from that of a service company in what way?

A service company does not include a line for cost of goods sold.

Lovegood Company reported the following balances in the Wages Payable account:Jan. 1, 2016 Dec. 31, 2016Wages Payable $6,000 $12,000If cash paid for wages during 2016 was $112,000, what was the wages expense reported on the 2016 income statement?A) $118,000B) $123,200C) $100,000D) $104,400

A) $118,000

An adjusting entry to record utilities used during a month for which no bill has yet been received is an example of:

Accruing expenses to reflect expenses incurred during the accounting period that are not yet paid or recorded

Matching steps in the accounting cycle to their definition:

Analyze: Analyze transactions from sources documents Record: Journalize transactions and prepare unadjusted trial balance Adjust: Journalize adjusting entries and prepare adjusted trial balance Report: Prepare financial statements Close: Journalize closing entries and prepare post-closing trial balance

A company incurred $60,000 (to be paid next year) for the current year's advertising activities. What would the effect of this transaction on the current year's accounting equation?A) No effect on Assets; $60,000 decrease in Liabilities; $60,000 increase in Stockholders' EquityB) $60,000 increase in Assets; $60,000 increase in Liabilities; No effect on Stockholders' EquityC) $60,000 increase in Assets; No effect on Liabilities; $60,000 increase in Stockholders' EquityD) No effect on Assets; $60,000 increase in Liabilities; $60,000 decrease in Stockholders' Equity

Answer: D

In applying the rules of debits and credits, which of the following statements is correct?

Asset, expense, and dividends are debited for increases.

The general ledger includes accounts for all but which of the following?

Assets, Expenses, Dividends

Mama's Pizza Shoppe borrowed $8,000 at 9% interest on May 1, 2011, with principal and interest due on October 31, 2012. The company's fiscal year ends June 30, 2011. What adjusting entry would the company record on June 30, 2011?

C. Option C (int exp 120/ int payable 120)

Which of the following is not an example of a closing entry?

Close unearned revenue to retained earnings (Close each revenue account to the retained earnings account, close each expense account to the retrained earnings account, close the dividends account to the retained earnings account)

The following data appear in the financial statements of a company, Calculate its current ratio:

Current assets 10k Current liabilities 5k 2:1 ratio

To which area of accounting are generally accepted accounting principles primarily relevant?

Financial Accounting

The purchase of a delivery truck for $19000 (on credit) was posted as debit to Delivery Trucks for $19000, and a debit to Notes Payable for $19000. What effect would this error have on the trial balance?

It is unbalanced for $38000

Which of the following processes best defines accounting?

Measuring economic activities and Communicating results to interested parties

Which of the following would most likely be classified as a long-term liability?

Notes payable

Tobias Company purchased inventory on account. This transaction will affect:

Only the balance sheet

Which of the following would be considered an intangible asset?

Patents

Which of the following will cause a trial balance to be out of balance?

Posting only the debit part of a transaction

Which of the following situations presents ethical challenges to accountants?

Pressure by superiors to produce a "good" number Avoiding the disclosure of confidential information An emphasis on short-term results

Which of the following is an example of an adjusting entry?

Recording depreciation expense on a truck

The financial statements of power company contain the following. How much is the net income?

Revenue 19,000 Expenses 8,000 19-8=11,000

Which of the following errors cause net income to be understated?

Revenue that has been earned but not yet collected has not been recorded.

What are increases in resources that a firm earns by providing goods and services to its customers?

Revenues

Which of the following is true?

The debit is on the left side of an asset account.

A T-account consists of how many parts?

Three

For the balance sheet to be in balance, the following must exist:

Total assets must equal total liabilities plus stockholders' equity

Which of the following is not shown on the statement of stockholders' equity?

Total liabilities

Closing entries

closing revenues to income summary closing expenses to income summary closing income summary to retained earnings and close dividends to retained earnings.

Current ratio

current assets divided by current liabilities

primary components of an annual report

introduction income statement balance sheet statement of cash flows notes to financial statements

return on assets

net income/average total assets

Math the following organizational attributes in the left column with the organizational form in the right column that the attribute is most often associated with.

1. Tax Advantages Sole proprietorship and partnership 2. Unlimited Liability Sole proprietorship and partnership 3. Shared Control Partnership 4. Most complex to set up Corporation 5. Easiest to raise a large amount of funds Corporation 6. Single Owner Sole proprietorship

A company reported net income of $200 on net sales of $2,000. The company's return on sales is:

10%

Huff Company began the year with a retained earnings balance of $30,000, reported net income for year of $45,000, and reported ending retained earnings of $60,000. How much dividend did Huff Company report for the year?

15,000

If Chandler company reports its year end total liabilities to be $85,000 and its year end stockholder's equity to be $100,000, how much are Chandler Company's year end total assets?

185,000

In a double-entry accounting system: A) All accounts have normal debit balances. B) A debit entry is recorded on the left side of an account. C) Liabilities, common stock, and expense accounts all have normal credit balances. D) A credit entry records a decrease in an account

B

The following data pertains to Smith Consulting Inc for 2013. Computer its ending retained earnings.

BOY RE: 120k Net income: 37,500 Dividends paid: 5k 152,500

Which of the following transactions does not affect the total assets, total liabilities, or total stockholder's equity on the balance sheet?

Collecting $4,000 from customers on account (Purchasing $500 supplies on account, paying a $3,000 note payable, payment of an $800 dividend)

Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2011, and charged the $4,200 premium to Insurance expense. At its December 31, 2011, year-end, Yummy Foods would record which of the following adjusting entries?

D. Option D (pre pd 3325/ ins exp 3325)

Which of the following items is not required to be included as part of a company's annual report?

Detailed history of the company (Notes to the financial statements, managements discussion and analysis, auditor's report.

Which of the following items will not be reported on a classified balance sheet?

Net Income

David Bash's Landscaping Company has compiled the following list of account balances of various assets, liabilities, revenues and expenses on December 31, 2016, the end of its first year of operations. Common stock 50,400 Accounts payable 10,000 Salary expense 18,000 Repairs expense 3,200 Dividends 20,000 Truck 34,000 Equipment 25,200 Notes payable 32,800 Cash 70,400 Supplies expense 6,400 Service revenue 87,200 Gasoline expense 3,200

Net Income 56,400 Total liabilities 42,800 Total assets 129,600 Retained earnings 36,400 Stockholders' Equity 86,800

return on sales ratio

Net Income/Sales

Folgers Industries recorded and paid $1,400 advertising for the current month. Which occurred?

Net income decreases

Which of the following transactions does not affect the balance sheet totals?

Ordered a new machine that will be paid for upon its delivery in two months. (Purchased $500 supplies on account, paid off a $3,000 note payable, received $4,000 cash from a bank after signing a note payable.)

Which of the following would not be considered a current asset?

Property, plant and equipment