Accounting 201 Final exam - Chong Wang

Frosty Inc. Has the following Balances of December 31 prior to closing entries Revenues ----- 35,000 Retained Earnings, Jan 1 ----- 10,000 Cash ----- 7,000 Expenses ----- 23,000 Accounts Payable ----- 4,000 Dividends ----- 1,000 Supplies ----- 18,000 Based upon the balances above, what net adjustment would be made to retained earnings due to closing entries? A. Increase of $11,000 B. Increase of $13,000 C. Increase of $12,000 D. Increase of $14,000

A

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? A. 34,000 Increase B. 55,000 Increase C. 34,000 Decrease D. 76,000 Increase

A

Inventory records for Dunbar Incorporated revealed the following Number Units Date Transaction of units cost Apr.1 Beginning inventory 500 $2.40 Apr.20 Purchase 400 $2.50 Dunbar sold 700 units of inventory during the month. Ending inventory assuming FIFO would be A. 500 B. 490 C. 470 D. 480

A

Providing services and receiving cash will A. Increase assets and increase stockholders' equity B. Increase assets and increase liabilities C. Decrease assets and increase liabilities D. Decrease liabilities and increase stockholders' equity

A

The Surf's Up issues 1,000 shares of 6%, $100 par value preferred stock at the beginning of 2014. All remaining shares are common stock. The company was not able to pay dividends in 2014, but plans to pay dividends of $18,000 in 2015. Assuming the preferred stock is "non-cumulative", how much of the $18,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2015? A.$6,000 to preferred stockholders and $12,000 to common stockholders. B.$18,000 to preferred stockholders and $0 to common stockholders. C.$12,000 to preferred stockholders and $6,000 to common stockholders. D.$9,000 to preferred stockholders and $9,000 to common stockholders.

A

The balance shown in the august bank statement of colt company was $23,000. After examining the August bank statement and items included with it, the company's accountant found: Checks outstanding 4,300 NSF check 140 Note collected by bank for Colt Comp. 1,200 Deposits outstanding 1,800 Bank service fees 60 What is the amount of cash that should be reported in the balance sheet as of August 31? A. $20,700 B. $17,200 C. $18,700 D. $22,200

A

The entry to record a monthly payment on an installment note such as a car loan. A. Increase expense, decreases liabilities, and decreases assets. B. Increases expense, increases liabilities, and increases assets C. Increases expense, decreases liabilities, and increases assets D. Increases expense, increases liabilities, and decreases assets

A

The equation best describing the balance sheet is: A. Assets = Liabilities + Stockholders' Equity B. Revenues - expenses = Net Income C. Ending retained earnings + Dividends = Net Income D. Revenues + Expenses = Net Income

A

The following information pertains to Sooner Company's cash balance and bank reconciliation as of August 31: Company balance before reconciliation 5,000 Checks outstanding 2,500 Notes collected by the bank 2,200 Service fee 50 Deposits outstanding 2,000 What is the correct cash balance for Sooner Company? A. $7,150 B. $5,150 C. $7,615 D. $7,250

A

The sale of gift cards by a company is a direct example of A. Unearned revenue B. Sales tax payable C. Current portion of long-term debt D. Contingencies

A

Which of the accounts are decreased on the debit side and increased on the credit side? A. Liabilities, stockholders' equity, and revenues B. Dividends, liabilities, and assets C. Expenses, dividends, and stockholders' equity D. Assets, dividends, and expenses

A

Which of the following leases is just like a rental A. An operating lease B. A capital Lease C. Both an operating and a capital lease D. Neither an operating lease nor a capital lease

A

in 2015 ,Megadeth clinic bills customers $50 million. By the end of the year, $20 million remains due from customers. Estimates that 30% will not be collected. A. A debit to Bad debt Expense $6 and a credit to allowance for uncollectible accounts $6 B. A debit to allowance for uncollectible accounts $15 and a credit to bad debt expense $15 C. A debit to bad debt expense $15 and a credit to accounts receivable $15 D. A debit to allowance for uncollectible accounts $6 and a credit to accounts receivable $6

A

Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight-line method and was sold at the end of the third year of use for $25,000 cash. Alliance should record: A. A gain of $5,000 B. A loss of $5,000 C. Neither a gain nor a loss since the computer was sold at its book value. D. Neither a gain nor a loss since the gain would not be recognized.

B

Childers Service Company provides services to customers totaling $3000 for which is billed the customers. How would the transaction be recorded? A. Debit cash $3,000, Credit service revenue $3,000 B. Debit Accounts Receivable $3,000, credit Service Revenue $3,000 C. Debit Accounts Receivable $3,000, credit cash $3,000 D. Debit service Revenue $3,000, credit Accounts Receivable $3,000

B

In December 2014, Quebecor printing received magazine subscriptions for 2015 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event? A. Debit Cash, $500; Credit Subscription Revenue, $500 B. Debit Cash, $500; Credit Unearned Revenue, $500 C. Debit subscription revenue, $200; Credit cash, $200 D. No journal entry is necessary

B

Innovative products reported net income of $205,000. Beginning and ending inventory balances were $40,000 and $45,000, respectively. Accounts Payable balances at the beginning and end of the year were $35,000 and $33,000, respectively. Assuming that all relevant information has been presented, the company would report operating cash flows of A. $202,000 B. $198,000 C. $212,000 D. $205,000

B

Jan 1, 2010, Company X issues $50,000 bonds at 12% due in 5 years, with interest payment semiannually on June 30 and December 31 each year. What is the journal entry of first interest payment? A. Debit interest expense $6,000, Credit Cash $6,000 B. Debit interest expense $3,000, Credit Cash $3,000 C. Debit Cash $3,000, Credit Interest Expense $3,000 D. Debit interest expense $6,000, Credit Interest Payable $6,000

B

Kansas Enterprises purchased equipment for $60,000 on January 1, 2015. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the double-declining balance method, depreciation expense for 2016 would be: A.$14,000. B.$14,400. C.$15,000. D.$16,000.

B

Kansas enterprises purchased equipment for 60,000 on January 1. 2015. The equipment is expected to have a 5 year life, with a residual value of $5000 at the end of 5 years. Using the straight line method, depreciation expense for 2016 would be. A. $12,000 B. $11,000 C. $13,000 D. $14,000

B

On December 2, Coley Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On December 20, Coley Corp. reissued 400 shares for $15 each. Which of the following is correct regarding the journal entry for the reissued shares? A. Debit Cash $15,000. B. Credit Treasury Stock $10,800. C. Credit Paid in Capital - Treasury Stock $5,200. D. Credit Treasury Stock $6,000.

B

The Cost of Providing goods and services to customers are referred to as: A. Assets B. Expenses C. Liabilities D. Revenues

B

The closing Entry for expenses includes A. A debit to dividends and a credit to all expense accounts. B. A debit to Retained Earnings and a credit to all expense accounts C. A debit to revenues and a credit to Retained Earnings. D. A debit to Revenues and a credit to all expense accounts

B

Use the following appropriate amounts to calculate net income: Revenues, $12,000; Liabilities, $5000; Expenses, $4,000; Assets, $19,000; Dividends, $4,000. A. $6,000 B.$8,000 C.$4,000 D.$14,000

B

Which of the following is not a current liability? A. Accounts payable B. A note payable due in 2 years C. Current portion of long-term debt D. Sales tax

B

Which of the following leases is essentially the purchase of an asset with debt financing A. An operating lease B. A capital lease C. Both an operating and a capital lease D. Neither an operating lease nor a capital lease

B

Baker Fine Foods has beginning inventory for the year of $12,000. During the year, Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory. Baker will report cost of goods sold equal to A. 150,000 B. 158,000 C. 142,000 D. 170,000

C

Brian Inc. Borrowed $8,000 from first bank and signed a promissory note. What entry should Brian Inc. Record? A. Debit Cash, $8,000; Credit Notes receivable, $8,000 B. Debit Notes Receivable, $8,000; Credit Cash, $8,000 C. Debit Cash, $8,000; Credit Notes Payable, $8,000 D. Debit Notes Payable, $8,000; Credit Cash, $8,000

C

Cash received from issuing common stock would be classified in which section of the statement cash flow A. Operating B. Investing C. Financing D. Not Shown

C

Creditors' claims to a corporation's resources are referred to as: A. Dividends B. Assets C. Liabilities D. Stockholders' equity

C

Daniel Dino Restaurant owes employee salaries of $15,000. This would be recorded as: A. Debit salaries expense, credit cash B. Debit salaries payable, credit cash C. Debit salaries expense, credit salaries payable D. Debit salaries payable, credit salaries expense

C

During the year, Victory Solutions: (1) received cash of $5,000 billed to a customer in 2014; (2) earned $20,000 of net income; (3) paid interest of $6,000 on a corporate bond issued; (4) paid dividends of $8,000 to its stockholders; (5) borrowed $40,000 from a local bank; and (6) purchased its own shares of common stock for $10,000. What is Victory Solution's cash flow from financing activities? A. $40,000 B. $30,000 C. $22,000 D. $16,000

C

Fashion, Inc. had a Retained Earnings balance of $12,000 at December 31, 2015. The company had an average income of $7,500 over the next 3 years, and an ending Retained Earnings balance of $15,000 at December 31, 2016. What was the total amount of dividends paid over the last three years? A.$4,500. B.$6,500. C.$19,500. D.$27,000.

C

Kela corporation reports net income of $450,000 that includes depreciation expense of $70,000. Also, cash of $50,000 was borrowed on a 5-year note payable. Based on this data, total cash inflows from operating activities are: A.$380,000 B.$470,000 C.$520,000 D.$570,000

C

Lense Laboratories' net income was $250,000. Given the account information below, what is the net operating cash flows for Lense Laboratories? Increase in Accounts payable 60,000 Increase in Salaries Payable 50,000 Decrease in Inventory 30,000 Depreciation Expense 45,000 Increase in Prepaid Insurance 3,000 A. $152,000 B. $278,000 C. $312,000 D. $438,000

C

On February 1, 2015, Middleton Corp. Lends cash and accepts a $1,400 note receivable that offers 6% interest and is due in six months. How much interest revenue will Middleton Corp report during 2015? A.$49 B.$504 C.$42 D.$84

C

On July 7, 2012, Saints Inc. received $10000 in cash from a customer for services to be provided on October 10, 2012. Which of the following describes how the transaction should be recorded on July 7, 2012? A. Debit Cash $10,000, Credit service revenue $10,000 B. Debit Accounts receivable $10,000, credit service Revenue $10,000 C. Debit cash $10,000, credit unearned revenue $10,000 D. Debit unearned revenue $10,000, credit cash $10,000

C

Provide golf services $400 "on account" A. Debit accounts receivable $400, credit unearned service revenue $400 B. Debit service revenue $400, credit service revenue $400 C. Debit accounts receivable $400, credit service revenue $400 D. Debit service revenue $400, credit accounts payable $400

C

Record depreciation expense $4,000 A. Debit accumulated depreciation $4,000, credit equipment $4,000 B. Debit cash $4,000, credit depreciation expense $4,000 C. Debit depreciation expense $4,000, credit accumulated depreciation $4,000 D. Debit equipment $4,000, credit Depreciation expense $4,000

C

Sell shares of common stock for $30,000 to obtain cash will. A. debit cash $30,000, credit revenue $30,000 B. Debit common stock $30,000, Credit cash $30,000 C. Debit cash $30,000, credit common stock $30,000. D. Debit Notes Payable $30,000, credit Common Stock $30,000

C

Sooner Company has 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? A. 47,000 B. 35,000 C. 23,000 D. 7,000

C

The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. What is the entry when the dividends are declared A. Dividends 9,000 Dividends Payable 9,000 B. Dividends 9,000 Cash 9,000 C. Dividends 12,000 Dividends Payable 12,000 D. Dividends 12,000 Cash 12,000

C

The corporation's own stock that has been issued and then repurchased by the company is referred to as A. Preferred stock B. Authorized stock C. Treasury stock D. Common stock

C

The following information pertains to Alpha computing at the end of 2015: Assets 970,000 Liabilities 560,000 Net Income 90,000 Common Stock 350,000 Alpha computing's retained Earnings account had a zero balance at the beginning of 2015. What amount of dividends did the company pay in 2015? A. $280,000 B. $150,000 C. $30,000 D. $80,000

C

The following information pertains to Lindsey Corp. at the end of the year. Credit sales 150,000 Accounts payable 20,000 Accounts Receivable 30,000 Allowance for Uncoll. Accounts 800 Debit Cash Sales 5,500 Lindsey Corp. uses the percentage - of - sales method and estimates that 2% of the credit sales are uncollectible. After the year-end adjustment, what amount of bad debit expense would Lindsey report for the year? A. 1,200 B. 2,200 C. 3,000 D. 3,800

C

The two categories of stockholders' equity usually found in the balance sheet of a corporation are: A. Common stock and liabilities B. Assets and liabilities C. Common stock and retained earnings D. Revenues and expenses

C

Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. This is an example of A. Sales Revenue B. Sales Discount C. Sales Return D. Sales Alowance

C

When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as: A. Debit cash; Credit dividends B. Debit Retained Earnings; Credit Dividends C. Debit Dividends; credit cash D. Debit Dividends; credit accounts payable

C

Which of the following is not a primary source of corporate debt financing? A. Bonds Payable B. Common Stock C. Leases D. Notes Payable

C

Wiley Company purchased new equipment for $60,000. Wiley paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,000; sales tax paid $2,000; installation cost, $1,000; installation cost, $1,000 and annual liability insurance fees, $1,000. The cost recorded for the equipment was: A. $60,000 B. $61,000 C. $64,000 D. $65,000

C

A company issued 1,000 shares of $1 par value preferred stock for $5 per share. What is true about the journal entry to record the issuance? A. Debit preferred Stock $5,000 B. Credit Cash $5,000 C. Credit preferred stock $5,000 D. Credit additional Paid-in capital $4,000

D

During the year, Next Tec corp. had the following cash flows: receipt from customers, $10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers, $5,000; payment of dividends, $1,000, payment to workers, $2,000; and payment for machinery, $8,000. What amount would be reported for financing cash flows on the Statement of Cash flows? A. $5,000 B. $2,000 C. $6,000 D. ($8,000)

D

Megginson, Inc. Issued a five-year corporate bond of $300,000 with a 5% interest rate. What effect would the bond "at maturity" have on Megginson, Inc.'s accounting equation? A. Increase assets and liabilities B. Increase and decrease assets C. Increase assets and stockholders' equity D. Decrease assets and liabilities

D

Purchase inventory $200 "on account" A. Debit cash $200, credit revenue $200 B. Debit inventory $200, credit Cash $200 C. Debit Cash $200, credit inventory $200 D. Debit Inventory $200, credit accounts payable $200

D

Samson Enterprises issued a ten-year, $20 million bond with a 10% interest. The entry to record the bond issuance would have what effect on the financial statements? A. Increase assets B. Increase liabilities C. Increase stockholders' equity D. A and B

D

The following information pertains to Julia & Company: March 1 Beginning inventory = 30 units @ $5 March 3 Purchased 15 units @ $4 March 9 Sold 25 units @ $8 What is the cost of goods sold for Julia & company assuming it uses LIFO? A.$125 B.$100 C.$110 D.$85

D

Universal Travel, Inc. borrowed $500,000 on November 1, 2015, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable in full at maturity on October 31, 2016. In connection with this note, Universal Travel, Inc. Should record interest expense in 2016 in the amount of: A. $8,000 B. $30,000 C. $5,000 D. $25,000

D

Using the information below from the accounting records of Thomas Corporation, owners' claims to the company's resources amount to: Assets --- 1,200,000 Liabilities --- 800,000 Net Income --- 100,000 Retained Earnings --- 250,000 A. 1,200,000 B. 800,000 C. 250,000 D. 400,000

D

When $2,500 of accounts receivable are determined to be uncollectable, which of the following should the company record to write off the accounts using the allowance method? A. A debit to Bad debt expense and a credit to allowance for Uncollecible accounts. B. A debit to allowance for uncollectible accounts and a credit to bad debit expense. C. A debit to bad debit expense and a credit to accounts receivable. D. A debit to allowance for uncollectible accounts and a credit to accounts receivable.

D

Which of the following is a permanent account? A. dividends B. Service Revenue C. Advertising Expense D. Retained Earnings

D