Acc final

Total interest on a $10,000, 6%, 2-month note receivable is A) $680. B) $100. C) $200. D) $300.

B) $100.

Marvin Services Corporation had the following accounts and balances:Accounts payable$18,000Equipment$21,000Accounts receivable3,000Land21,000Buildings?Unearned service revenue6,000Cash9,000Total stockholders' equity?If the balance of the Buildings account was $51,000, what would be the total of liabilities and stockholders' equity? A) $102,000 B) $105,000 C) $81,000 D) $75,000

B) $105,000

Pearson Company bought a machine on January 1, 2014. The machine cost $144,000 and had an expected salvage value of $24,000. The life of the machine was estimated to be 5 years. The depreciable cost (base) of the machine is: A) $144,000 B) $120,000 C) $40,000 D) $24,000

B) $120,000

An asset was purchased for $300,000. It had an estimated salvage value of $60,000 and an estimated useful life of 10 years. Assuming straight-line depreciation, depreciation expense in Year 6 would be A) $30,000. B) $24,000. C) $180,000.

B) $24,000.

Based on the following data, what is the amount of current assets?Accounts payable$62,000Accounts receivable100,000Cash50,000Intangible assets100,000Inventory138,000Long-term investments160,000Long-term liabilities200,000Short-term investments80,000Notes payable56,000Property, plant, and equipment1,340,000Prepaid insurance2,000 A) $212,000 B) $370,000 C) $232,000 D) $230,000

B) $370,000

Henson Company began the year with retained earnings of $330,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson's retained earnings at the end of the year? A) $490,000 B) $410,000 C) $790,000 D) $450,000

B) $410,000

Benedict Company compiled the following financial information as of December 31, 2014:Service revenue$560,000Common stock120,000Equipment160,000Operating expenses500,000 Cash140,000 Dividends40,000 Supplies20,000 Accounts payable 80,000Accounts receivable 60,000Retained earnings, 1/1/14300,000Benedict's stockholders' equity on December 31, 2014 is A) $420,000. B) $440,000. C) $320,000. D) $480,000.

B) $440,000

Financial information is presented below: Operating Expenses$28,000 Sales Returns and Allowances7,000 Sales Discounts3,000 Sales Revenue150,000 Cost of Goods Sold91,000 Based on the information above, gross profit would be A) $56,000. B) $49,000. C) $52,000. D) $59,000.

B) $49,000.

Conway Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period? A) $9,000 B) $8,820 C) $8,100 D) $8,280

B) $8,820

In a classified balance sheet, assets are usually classified as A)current assets; long-term assets; property, plant, and equipment; and intangible assets. B)current assets; long-term investments; property, plant, and equipment; and common stocks. C)current assets; long-term investments; tangible assets; and intangible assets. D) current assets; long-term investments; property, plant, and equipment;and intangible assets.

D) current assets; long-term investments; property, plant, and equipment;and intangible assets.

A debit to an asset account indicates a(n) A)error. B)credit was made to a liability account. C)decrease in the asset. D) increase in the asset.

D) increase in the asset.

Cortez Company updates its inventory records perpetually. The company's records showed a beginning inventory of $12,000, cost of goods sold of $20,000, and ending inventory of $14,000. How much inventory was purchased during the year? A)$18,000 B)$16,000 C)$12,000 D)$22,000

D)$22,000

Bonds with a face value of $300,000 and a quoted price of 102.25 have a selling price of: A)$360,675. B)$306,075. C)$300,675. D)$306,750.

D)$306,750.

Delta Diamonds uses a periodic inventory system. The company had five one-carat diamonds available for sale this year: one was purchased on June 1 for $800, two were purchased on July 9 for $850 each, and two were purchased on September 23 for $900 each. On December 24, it sold one of the diamonds that was purchased on July 9. Using the FIFO method, its cost of goods sold for the year ended is: A)$1,700 B)$900 C)$1,800 D)$800

D)$800

Kingsbury Manufacturing has net sales revenue of $624,000, cost of goods sold of $274,560, and all other expenses of $262,080. The net profit margin is: A)0.32. B)0.56. C)0.86. D)0.14.

D)0.14

Winsor Clothing Store had a balance in the Accounts Receivable account of $760,000 at the beginning of the year and a balance of $840,000 at the end of the year. Net credit sales during the year amounted to $6,800,000. The average collection period of the accounts receivable in terms of days was A)30 days. B)365 days. C)45.1 days. D)42.9 days.

D)42.9 days.

On January 1, McCarver Corporation had 600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event, A)McCarver's Paid-in Capital in Excess of Par Value account increased $300,000. B)McCarver's total stockholders' equity was unaffected. C)McCarver's Stock Dividends account increased $900,000. D)All of these answer choices are correct.

D)All of these answer choices are correct.

The entry to record a sale of $700 with terms of 2/10, n/30 will include a A)Credit to Sales Discounts for $14. B)Debit to Cash for $686. C)Credit to Accounts Receivable for $700. D)Credit to Sales Revenue for $700.

D)Credit to Sales Revenue for $700.

During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is: A)Specific identification method. B)Weighted-average method. C)FIFO method. D)LIFO method.

D)LIFO method.

When an account is written off using the allowance method, the A)Net realizable value of accounts receivable will increase. B)Net realizable value of accounts receivable will decrease. C)Allowance account will increase. D)Net realizable value of accounts receivable will stay the same.

D)Net realizable value of accounts receivable will stay the same.

A company just began business and made the following four inventory purchases in June: June 1150 units$825 June 10200 units1,120 June 15200 units1,140 June 28150 units 885 $3,970 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30th is: A) $1,134. B) $1,180. C) $1,100. D) $1,120.

A) $1,134.

A credit sale of $1,900 is made on April 25, terms 2/10, net/30, on which a return of$100 is granted on April 28. What amount is received as payment in full on May 1? A) $1,764 B) $1,862 C) $1,900 D) $1,800

A) $1,764

Using the Aging of Accounts Receivable method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful Accounts is $11,000 debit before adjustment what is the balance after adjustment? A) $45,000 B) $11,000 C) $56,000 D) $34,000

A) $45,000

Reporting a net income of $95,000 will A) increase retained earnings. B)decrease retained earnings. C)increase common stock. D)decrease common stock.

A) increase retained earnings.

The asset account Office Supplies has a balance of $830 at the beginning of the year. The amount on hand at the end of the year is $560. The company has calculated the Supplies Expense for the year to be $4,100. Based on this information, what amount of office supplies was purchased during the year? A)$3,830 B)$3,540 C)$4,660 D)$0

A)$3,830

On a classified balance sheet, companies usually list current assets A)in alphabetical order. B)with the largest dollar amounts first. C)in the order in which they are expected to be converted into cash. D)in the order of acquisition.

C)in the order in which they are expected to be converted into cash.

Alphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. It purchased A thru G in January at $2.50 per letter. In February, it purchased H thru L at $4.50 per letter. It purchased M thru R in March at $5.50 per letter. It sold A, D, E, H, J and N in October. There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the LIFO method, what is the cost of its ending inventory? A)$40.00 B)$15.00 C)$33.00 D)$53.50

A)$40.00

Deferred Revenue, which represents the company's obligation to honor gift cards previously issued to customers, totaled $6,500 at the beginning of the year and $9,500 at the end of the year. Customers purchased gift cards amounting to $52,000 during the year. What was the amount of gift cards redeemed by customers during the year? A)$49,000 B)$55,000 C)$68,000 D)$36,000

A)$49,000

Dearborn Company has earnings per share of $2.40, it paid a dividend of $1.00 per share, and the market price of the company's stock is $90 per share. The price/earnings ratio is closest to: A)37.50 B)64.29 C)2.40 D)2.00

A)37.50

Which of the following costs should be recorded as the cost of a given machine?1 Purchase price2.Costs to assemble the machine3.Costs to test the machine4.Costs of a worker injured while the machine was being tested. Assume the injury is typical of work involved in testing such machinery. A)All of these items make up the cost of the machine. B)Items 1, 2 and 3. C)Items 2, 3 and 4. D)Items 3, 4 and 1.

A)All of these items make up the cost of the machine.

Which of the following financial statements is concerned with the company at a specific point in time? A)Balance sheet B)Income statement C)Retained earnings statement D)Statement of cash flows

A)Balance sheet

On January 1, the Sleepy Monk Coffee Shop paid $22,500 for a full year of rent beginning on January 1. The rent payment was appropriately recorded in the Cash and Prepaid Rent accounts. If financial statements are prepared on January 31, the journal entry to record the adjustment would be: A)Debit Rent Expense and credit Prepaid Rent for $1,875. B)Debit Rent Expense and credit Prepaid Rent for $22,500. C)Debit Prepaid Rent and credit Rent Expense for $22,500. D)Debit Prepaid Rent and credit Rent Expense for $1,875.

A)Debit Rent Expense and credit Prepaid Rent for $1,875.

Which of the following is the most appropriate and modern definition of accounting? A)The information system that identifies, records, and communicates the economic events of an organization to interested users B)A means of collecting information C)The interconnected network of subsystems necessary to operate a business D)Electronic collection, organization, and communication of vast amounts of information.

A)The information system that identifies, records, and communicates the economic events of an organization to interested users

If goods in transit are shipped FOB destination A)The seller has legal title to the goods until they are delivered. B)The buyer has legal title to the goods until they are delivered. C)The transportation company has legal title to the goods while the goods are in transit. D)No one has legal title to the goods until they are delivered.

A)The seller has legal title to the goods until they are delivered.

A high receivables turnover ratio indicates A)customers are making payments quickly. B)a large portion of the company's sales are on credit. C)many customers are not paying their receivables. D)the company's sales have increased.

A)customers are making payments quickly.

The following totals for the month of April were taken from the payroll records of Metz Co.Salaries $30,000FICA taxes withheld2,295Income taxes withheld 6,600Medical insurance deductions1,200Federal unemployment taxes240State unemployment taxes1,500The journal entry to record the monthly payroll on April 30 would include a: A)debit to Salaries and Wages Expense for $30,000. B)credit to Salaries and Wages Payable for $30,000. C)debit to Salaries and Wages Payable for $30,000. D)debit to Salaries and Wages Expense for $19,905.

A)debit to Salaries and Wages Expense for $30,000.

Collection of a $600 Accounts Receivable A)increases an asset $600; decreases an asset $600. B)increases an asset $600; decreases a liability $600. C)decreases a liability $600; increases stockholders' equity $600. D)decreases an asset $600; decreases a liability $600.

A)increases an asset $600; decreases an asset $600.

When a horizontal analysis is performed and a zero or negative amount is reported in the base year, then A)no percentage change can be computed. B)the percent change will be negative. C)the accountant has made a mistake. D)the percentage change will be 100% of greater.

A)no percentage change can be computed.

During January 2014, Carey Services Inc. paid a cash dividend of $2,000. This transaction A)reduces stockholders' equity by $2,000. B)increases stockholders' equity by $2,000. C)reduces net income by $2,000. D)increases expenses by $2,000.

A)reduces stockholders' equity by $2,000.

Nix Corporation sold equipment for $20,000. The equipment had an original cost of $60,000 and accumulated depreciation of $30,000. Ignoring the tax effect, as a result of the sale: A)net income will increase $20,000 B)net income will increase $10,000. C)net income will decrease $10,000. D)net income will decrease $20,000.

C)net income will decrease $10,000.

The right to receive money in the future is called a(n) A)account payable. B) account receivable. C)liability. D)revenue.

B) account receivable.

Liabilities A)are future economic benefits. B) are debts and obligations. C)possess service potential. D)are things of value owned by a business

B) are debts and obligations.

Borrowing money is an example of a(n) A)delivering activity. B) financing activity. C)investing activity. D)operating activity.

B) financing activity.

Parker Inc. had a beginning balance in its Retained Earnings account of $385,650. During the year, the company declared and paid a $4,710 dividend and, at the end of the year, it reported Retained Earnings of $399,960. The company's net income for the year was: A)$14,310 B)$19,020 C)$0 D)$9,600

B)$19,020

During the year, Sarah's Pet Shop's merchandise inventory decreased by $40,000. If the company's cost of goods sold for the year was $600,000, purchases would have been A)$640,000 B)$560,000 C)$520,000 D)Unable to determine

B)$560,000

Gilbert Company bought equipment several years ago and used the straight-line method to record depreciation expense. At the end of 2012, the adjusted trial balance shows the following balances related to this equipment: PP&E $100,000; Accumulated Depreciation $20,000; Depreciation Expense $5,000. How many years has the equipment been used? A)3 years B)4 years C)5 years D)40 years

B)4 years

A company owned print equipment destroyed by fire. The equipment originally cost$125,000. The accumulated depreciation on it as of the fire date was $60,000. The payment from the insurance company was $90,000. The company should recognize: A)loss of $100,000. B)A gain of $25,000. C)A loss of $65,000. D)A gain of $90,000.

B)A gain of $25,000.

Mapleleaf Industries declared a $0.75 per share cash dividend. The company has 120,000 shares authorized, 49,000 shares issued, and 46,000 shares of common stock outstanding. What is the journal entry to record the dividend declaration? A)Debit Dividends and credit Dividends Payable for $36,750. B)Debit Dividends and credit Dividends Payable for $34,500. C)Debit Dividends Payable and credit Cash for $36,750. D)Debit Dividends Payable and credit Cash for $90,000.

B)Debit Dividends and credit Dividends Payable for $34,500.

Adjusting entries often involve cash. A)True B)False C) DUH

B)False

Net income will result if gross profit exceeds A)Cost of goods sold. B)Operating expenses. C)Purchases. D)Cost of goods sold plus operating expenses.

B)Operating expenses.

Which of the following accounts has a normal debit balance? A)Accounts Payable B)Prepaid Rent C)Retained Earnings D)Common Stock

B)Prepaid Rent

Al's Bookstore has collected $750 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Al's Bookstore make to show the April remittance? A)Sales Tax Expense750Cash750 B)Sales Tax Payable750Cash750 C)Sales Tax Expense750Sales Tax Payable750 D)No entry required.

B)Sales Tax Payable750 ---------------------Cash750

Which one of the following is not an ownership right of a stockholder in a corporation? A)To vote in the election of directors. B)To declare dividends on the common stock. C)To share in assets upon liquidation. D)To share in corporate earnings.

B)To declare dividends on the common stock.

Short-term creditors are usually most interested in assessing A)solvency. B)liquidity. C)marketability. D)profitability.

B)liquidity.

The number of shares of issued stock equals A)unissued shares minus authorized shares. B)outstanding shares plus treasury shares. C)authorized shares minus treasury shares. D)outstanding shares plus authorized shares.

B)outstanding shares plus treasury shares.

A stockholder who receives a stock dividend would A)expect the market price per share to increase. B)own more shares of stock. C)expect retained earnings to increase. D)expect the par value of the stock to change.

B)own more shares of stock.

The term residual claim refers to a stockholders' right to A)receive dividends. B)share in assets upon liquidation. C)acquire additional shares when offered. D)exercise a proxy vote.

B)share in assets upon liquidation.

The historical cost principle requires that when assets are acquired, they be recorded at A)market value. B)the amount paid for them. C)selling price. D)list price.

B)the amount paid for them.

The most important information needed to determine if companies can pay their current obligations is the A)net income for this year. B)projected net income for next year. C)relationship between current assets and current liabilities. D)relationship between short-term and long-term liabilities.

C)relationship between current assets and current liabilities.

Quark Inc. just began business and made the following four inventory purchases in June: June 1150 units$825 June 10200 units1,120 June 15200 units1,140 June 28150 units 885 $3,970 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is: A) $1,105. B) $1,100. C) $1,170. D) $1,180.

C) $1,170.

Teller purchased merchandise from the Churchill Company on October 17, 2013. Churchill accepted Teller's $4,800, 90-day, 10% note as payment. Churchill has made necessary adjusting entries on December 31. How much should Churchill recognize as interest revenue on January 15, 2014 when the note is paid? (Assume a 360-day year). A) $120 B) $80 C) $40 D)$480

C) $40

Ending retained earnings for a period is equal to beginning A)Retained earnings + Net income + Dividends B)Retained earnings - Net income - Dividends C) Retained earnings + Net income - Dividends D) Retained earnings - Net income + Dividends

C) Retained earnings + Net income - Dividends

A measure of profitability is the A)current ratio. B)debt to assets ratio. C) earnings per share. D) working capital.

C) earnings per share.

A company issues 1 million shares of common stock with a par value of $0.05 for $15.30 a share. The entry to record this transaction includes a debit to Cash for: A)$50,000 and a credit to Common Stock for $50,000. B)$15,300,000 and a credit to Common Stock for $15,300,000. C)$15,300,000, a credit to Common Stock for $50,000, and a credit to Additional Paid-in Capital for $15,250,000. D)$50,000, a debit to Capital Receivable for $15,250,000, a credit to Common Stock for $50,000, and a credit to Additional Paid-in Capital for $15,250,000.

C)$15,300,000, a credit to Common Stock for $50,000, and a credit to Additional Paid-in Capital for $15,250,000.

IHOP has 200,000 shares of $1 par outstanding. The market price is $5 per share. If IHOP declares and distributes a 40% stock dividend, how will this affect Retained Earnings? A)$400,000 increase B)$400,000 decrease C)$80,000 decrease D)$80,000 increase

C)$80,000 decrease

Net income was $478,600 in the current year and $367,000 in the prior year. The year-to-year percentage change in net income is an increase of: A)77%. B)23%. C)30%.

C)30%.

Four thousand bonds with a face value of $1,000 each, are sold at 102. The entry to record the issuance is: A)Cash4,080,000Bonds Payable4,080,000 B)Cash4,000,000Premium on Bonds Payable 80,000Bonds Payable4,080,000 C)Cash4,080,000Premium on Bonds Payable 80,000Bonds Payable4,000,000 D)Cash4,080,000Discount on Bonds Payable 80,000Bonds Payable4,000,000

C)Cash ---------------4,080,000 Premium on Bonds Payable 80,000 Bonds Payable------------------4,000,000

On 12/1/13 a company accepted a $10,000 promissory note, with a 9% interest rate and a 90-day maturity to grant an extension to a customer with a past due accounts receivable. On 12/31/13, the company should record a: A)Debit to accounts receivable. B)Credit to accounts receivable. C)Credit to interest revenue. D)Credit to bad debt expense.

C)Credit to interest revenue.

Under the allowance method, Bad Debt Expense is recorded A)When an individual account is written off. B)When the loss amount is known. C)For an amount that the company estimates it will not collect. D)several times during the accounting period.

C)For an amount that the company estimates it will not collect.

The Keanu Reeves Company has a Current Ratio of 0.8 at the end of the current year. Which of the following could the management have done on the last day of the year to make the Current Ratio higher? A)Purchase some supplies for cash B)Collect some additional cash from accounts receivable C)Purchase some additional inventory on account D)Pay off some accounts payable

C)Purchase some additional inventory on account

Vertical analysis is a technique that expresses each item in a financial statement A)in dollars and cents. B)as a percent of the item in the previous year. C)as a percent of a base amount. D)starting with the highest value down to the lowest value.

C)as a percent of a base amount.

The journal entry to record the issuance of bonds at a discount will include a A)debit to Cash for the face amount of the bonds. B)debit to Cash for the face amount of the bonds plus the amount of the discount. C)debit to Cash for the face amount of the bonds minus the amount of the discount. D)credit to Cash for the face amount of the bonds.

C)debit to Cash for the face amount of the bonds minus the amount of the discount.

Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of $80,000. During the year the business recorded $220,000 in revenues,$110,000 in expenses, and dividends of $40,000. The net income reported by Ashley's Accessory Shop for the year was A) $80,000. B) $100,000 .C) $130,000. D) $110,000.

D) $110,000.

On August 1, 2013, Noll Corporation borrowed $200,000 from BEST bank by signing a 6%, 9-month note payable which has a due date of April 30, 2014. Noll's 2014 interest expense on this note is: A) $12,000 B) $7,000 C) $5,334 D) $4,000

D) $4,000

Quiet Phones Company has the following inventory data: July 1Beginning Inventory20 units @ $19$380 July 7Purchases70 units @ $201,400 July 22Purchases10 units @ $22 220$2,000 A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is: A) $620. B) $660. C) $1,340. D) $1,380.

D) $1,380.

If expenses are paid in cash, then A)assets will increase. B)liabilities will decrease. C)stockholders' equity will increase. D) assets will decrease.

D) assets will decrease.

Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not? A)Yes, they are treated as revenue at the time of receipt because the company has access to the cash. B)No, the amount of revenue cannot be adequately determined until the company completes the work. C)Yes, the intent of the company is to perform the work and the customer is confident that the services will be completed. D)No, revenue cannot be recognized until the work is performed.

D)No, revenue cannot be recognized until the work is performed.

Treasury Stock is a(n) A)contra asset account. B)retained earnings account. C)asset account. D)contra stockholders' equity account.

D)contra stockholders' equity account.

Dividends paid A)increase assets. B)increase expenses. C)decrease revenues. D)decrease retained earnings

D)decrease retained earnings

Par value A)represents what a share of stock is worth. B)represents the original selling price for a share of stock. C)is established for a share of stock after it is issued. D)is the value assigned per share in the corporate charter.

D)is the value assigned per share in the corporate charter.