Accounting 2- Exam 1 prep (practice quizzes/reg. quizzes)

The Accounting Formula states that, for every business:

Assets = Liabilities + Owner's Equity

Which branch of accounting would be chiefly concerned with the accuracy and truthfulness of financial reports?

Auditing

This month, Chai has to pay the utility bill he received last month. He pays the bill with cash. Using double entry accounting, he enters the payment as _______ a to his cash (asset) account and as a to his accounts payable (liability) account.

Credit; debit

Assets which may be expected to be sold or converted to cash within one year are called:

Current assets

The accounting system that requires at least two separate accounting entries for every financial transaction is called:

Double entry accounting

Terry's Coffee Shop had total assets last year of $437,264, and a total owner's equity of $206,350. Calculate the total liabilities for the year.

$ 230,914

At the Thai restaurant, revenues for June were $36,000 ($20,000 was received); cost of food was $12,100 (only 45% was paid to the supplier); and the monthly rent was $2,100 (all of which was paid in cash). Using cash accounting, what is the total cost of food (expense) for the month of June?

$ 5,445

Based on the answer of question 2, the hotel had the permanent owner's equity of 450,457. What was the temporary owner's equity?

$ 529,180

The balance sheet for the Trump Hotel shows the following: Cash = $59,500; Accounts Receivable = $38,000; Inventories = 8,500; Fixed Assets = $606,000; Accounts Payable = $32,500; Note Payable = $18,750; Common Stock = $95,000; Retained Earnings = 156,000. $24,000 is due on the mortgage this year, with $402,000 due in future years. What is the amount of total current liabilities?

$ 75,250

Rene DuBois manages a hotel that had assets of $2,425,000 on last year's balance sheet, with liabilities of $1,445,363. What was the owners' equity shown on the balance sheet for the hotel?

$ 979,637

Sales last year were $437,264 and sales this year are $486,700. What is the sales variance?

$49,436.00

Josh has invested $50,000 in his restaurant. In its first year, the restaurant had revenues of $250,000, and Josh received $5,000 on his investment. What is his ROI?

10%

Jane's Coffee Shop had total sales last year of $437,264, and a net income of $46,350. Calculate the profit margin for the year.

10.60%

The Eagle Hotel had total sales last year of $1,290,321. In the food and beverage area, food sales were $89,041 and food costs were $32,055. What was the food cost percentage for the Eagle Hotel last year?

36.0%

Given an accounts payable balance on the balance sheet of $66,000 and a balance from the previous year of $46,150 for this account, what is the percentage variance?

43.01%

The Eagle Hotel spent $49,500 on newspaper advertising, and total operating expense of $692,576. What is the specific expense percentage for advertising?

7.15%

An accountant's systematic method of documenting the value of a business's assets, liabilities and owner's equity on a specific date is called a balance sheet.

True

The balance sheet equation is expressed as Assets = Liability + Owner's Equity.

True

The best method of recording any financial transaction and ensuing that readers of financial statement can depend on their accuracy is to follow generally accepted accounting principles.

True

In evaluating the revenues, expenses and profit produced by their business, managers can compare all items to revenues using percentages. This method is called:

Vertical analysis

The balance sheet analysis method that compares a business's percentages with industry averages or percentages from other units in a corporation is called

Vertical analysis

Which is NOT a question managers should ask when assessing whether or not a course of action is ethical?

Will I get caught?

Sam Mehdi has received financial statements for this year through June 30th. His year-to-date total assets are $1,500,000 and total liabilities are $732,000. His stocks are shown as $400,000 and his retained earnings are $106,000. What is the total value of Sam's temporary equity accounts as of June 30th?

a. $ 262,000

. The balance sheet for the Bayberry Lodge shows the following: Cash = $57,000; Accounts Receivable = $38,000; Inventories = 8,500; Net Fixed Assets = $606,000; Accounts Payable = $32,500; Common Stock = $95,000; Retained Earnings = 156,000. $24,000 is due on the mortgage this year, with $402,000 due in future years. What is the amount of total current liabilities?

a. $ 56,500

Sam Mehdi is examining the balance sheet for Sam's Steaks & Ribs for last year. The balance sheet shows total liabilities of $697,000 and owner's equity of $506,000. What are total assets?

a. $1,203,000

At the Thai restaurant, revenues for June were $46,000 ($30,000 was received); cost of food was $15,100 (only 50% was paid to the supplier); and the monthly rent was $3,100 (all of which was paid in cash). Using accrual accounting, what is the total revenue for the month of June?

a. $46,000

The Regent Hotel spent $17,450 on grounds maintenance last year. The hotel had budgeted $14,250 for this category. What is the percentage variance?

a. (18.34%)

Susie's Café had total sales last year of $437,264, with a total gross profit of $98,123 and a net income of $46,350. Calculate the profit margin for the year.

a. 10.60%

Given a net income of $62,751 and total sales of $555,320, calculate the profit margin.

a. 11.30%

Which of the following is the correct order of liquidity of current assets?

a. Cash, marketable securities, accounts receivable, inventories, prepaid expenses

This month, Chai has to pay the utility bill he received last month. He pays the bill with cash. Using double entry accounting, he enters the payment as ______ a to his cash (asset) account and as _______ a to his accounts payable (liability) account.

a. Credit; debit

Trey and Chelsey go out for lunch and pay $12.30 in cash for their meal. Using double entry accounting, the café manager enters $12.30 as_______ a to his sales (revenue) account and as _______ a to his cash (asset) account.

a. Credit; debit

Which branch of accounting would be best used to record your hotel's net income for the month of June?

a. Financial accounting

Which branch of accounting would be best used to record your hotel's purchase of new furnishings to redecorate the lobby area?

a. Financial accounting

Rene DuBois manages a hotel that had assets of $2,425,000 on last year's balance sheet, with liabilities of $1,445,363. What was the owners' equity shown on the balance sheet for the hotel?

b. $ 979,637

The balance sheet for the Bayberry Lodge shows the following: Cash = $57,000; Accounts Receivable = $38,000; Inventories = 8,500; Net Fixed Assets = $606,000; Accounts Payable = $32,500; Common Stock = $95,000; Retained Earnings = 156,000. $24,000 is due on the mortgage this year, with $402,000 due in future years. What is the amount of total current assets?

b. $103,500

At the Thai restaurant, revenues for June were $46,000 ($30,000 was received); cost of food was $15,100 (only 50% was paid to the supplier); and the monthly rent was $3,100 (all of which was paid in cash). Using cash accounting, what is the total revenue for the month of June?

b. $30,000

Given an accounts payable balance on the balance sheet of $32,500 and a balance from the previous year of $34,750 for this account, what is the percentage variance?

b. (6.47%)

The Regent Restaurant had total sales last year of $1,290,321. The food sales were $89,041 and food costs were $32,055. What was the food cost percentage for the Regent Restaurant?

b. 36.0%

. Which branch of accounting would be best used to determine the cost of disposable amenities used by your hotel's rooms division during the month of June?

b. Cost accounting

Which branch of accounting would be best used to determine your restaurant's total labor cost for the month of June?

b. Cost accounting

Sam Mehdi has received financial statements for this year through June 30th. His year-to-date total liabilities are $732,000. His stocks are shown as $400,000 and his retained earnings are $106,000. Year-to-date revenues are $702,498 and year-to-date expenses are $618,207. What is the total value of Sam's permanent equity accounts as of June 30th?

c. $ 506,000

The balance sheet for the Hotel Crosby shows $1,590,421 in assets and $1,081,320 in liabilities. Calculate the owners' equity.

c. $ 509,101

Given an accounts receivable balance on the balance sheet of $38,000 and a balance from the previous year of $36,150 for this account, what is the dollar variance?

c. $1,850.00

At the Thai restaurant, revenues for June were $46,000 ($30,000 was received); cost of food was $15,100 (only 50% was paid to the supplier); and the monthly rent was $3,100 (all of which was paid in cash). Using accrual accounting, what is the total cost of food (expense) for the month of June?

c. $15,100

Alicia Ayala owns a café that had revenues of $265,800 last year. Her expenses last year were $248,523. How much was her profit last year?

c. $17,277

The balance sheet for the Bayberry Lodge shows the following: Cash = $57,000; Accounts Receivable = $38,000; Inventories = 8,500; Net Fixed Assets = $606,000; Accounts Payable = $32,500; Common Stock = $95,000; Retained Earnings = 156,000. $24,000 is due on the mortgage this year, with $402,000 due in future years. What is the amount of total owners' equity?

c. $251,000

The budgeted amount for equipment repairs last year was $18,500, and the actual amount spent on this category was $17,200. What is the percentage variance?

c. (7.03%)

When using vertical analysis on a balance sheet, the business's total liabilities and owners' equity take on a value of________ .

c. 100.0%

Given $273,904 in food costs and $848,000 in food revenues, calculate the food cost percentage.

c. 32.30%

Chai manages a popular Thai restaurant. When he receives his monthly electric bill (which is due next month), using double entry accounting, he enters the total amount as ______ a to his utilities (expense) account and as ________ a to his accounts payable (liability) account.

c. Debit; credit

Which branch of accounting would be best used to determine your hotel's sales tax obligation for the month of June?

c. Tax accounting

Which branch of accounting would be best used to determine your restaurant's various payroll tax obligations for the second quarter of the year?

c. Tax accounting

When calculating percentage variance for an account on the balance sheet, the denominator is________________ .

c. The prior period's number

The balance sheet for the Bayberry Lodge shows the following: Cash = $57,000; Accounts Receivable = $38,000; Inventories = 8,500; Net Fixed Assets = $606,000; Accounts Payable = $32,500; Common Stock = $95,000; Retained Earnings = 156,000. $24,000 is due on the mortgage this year, with $402,000 due in future years. What is the amount of total long-term liabilities?

d. $402,000

Sales last year were $437,264 and sales this year are $486,700. What is the sales variance?

d. $49,436.00

The Regent Hotel spent $4,950 on newspaper advertising, with a total marketing expense of $15,860, and revenues of $692,576. What is the specific expense percentage for advertising?

d. 31.21%

8. The net income for this year is $52,360. Last year, net income was $50,040. What is the percentage variance in net income?

d. 4.64%

Paul has invested $75,000 in a new restaurant. In its first year, the restaurant had revenues of $350,000, and Paul received $6,000 on his investment. What is his ROI?

d. 8.00%

. Which branch of accounting would be best used to make decisions about your hotel's occupancy rate for the month of June?

d. Managerial accounting

Which of the following describes the impact of a credit entry?

d. ↓ Assets ↑ Liabilities ↑ Owners' Equity ↑ Revenues ↓ Expenses

Which branch of accounting would be best used to verify the documentation of the factors involved in calculating your general manager's bonus for the year?

e. Auditing

Which of the following does include the fixed assets?

Equipment

Obligations of a business that will be repaid more than one year are known as current liabilities.

False

The right side of a T account is debit side.

False

Which branch of accounting would be best used to record your hotel's profit for the month of June?

Financial accounting

In evaluating the revenues, expenses and profit produced by their business, managers can compare all items to revenues using the dollars or percentage change. This method is called:

Horizontal analysis

A summary of financial information for a defined accounting period is called a(n):

Income statement

Which branch of accounting would be best used to make decisions about your hotel's occupancy rate for the month of June?

Managerial accounting

Investors are particularly interested in _______, which measures the quality or strength of an investment.

ROI

The formula for calculating profits is:

Revenue - Expense

The income statement is naturally divided into three main parts that should be analyzed:

Revenue, Expense, and Profit

Permanent owner's equity accounts include:

Stock and retained earnings

Which branch of accounting would be best used to determine your hotel's sales tax obligation for the month of June?

Tax accounting

The balance sheet for the Trump Hotel shows the following: Cash = $59,500; Accounts Receivable = $38,000; Inventories = 8,500; Fixed Assets = $606,000; Accounts Payable = $32,500; Note Payable = $18,750; Common Stock = $95,000; Retained Earnings = 156,000. What is the amount of total current assets?

$ 106,000

Alicia Ayala owns a café that had revenues of $265,800 last year. Her expenses last year were $248,523. How much was her profit last year?

$ 17,277

Given an accounts payable balance on the balance sheet of $66,000 and a balance from the previous year of $46,150 for this account, what is the dollar variance?

$ 19,850