Accounting Final

estimated liability

A warranty is an example of an: contingent liability, estimated liability, settled liability, or a known liability.

free on board

FOB means

to help investors, creditors, and others make decisions

What is the purpose of financial accounting information?

date of record

Will determine which shareholders receive the dividends

accounts receivable

a T-account has a $759 credit balance. this account is most like NOT: accounts payable (credit), sales revenue (credit), common stock (credit), accounts receivable (debit)

$58,000 58,000+65,000=123,000

a company has $123,000 in assets and $65,000 in liabilities. How much does the company have in stockholders' equity?

$16,450

a company has $235,000 in credit sales. the company used the allowance method of determining uncollectible accounts expense. the allowance for doubtful accounts now has a $7,250 credit balance. If the company uses the allowance method based on 7% of credit sales, what will be the amount of the journal entry credited to allowance for uncollectible amounts?

$1,300????

a company has $4,500 in net sales, $3,200 in gross profit, $1,300 in ending inventory, and $1,800 in beginning inventory. the company's cost of good sold is....

$80,000 23,500+ 56,500=80,000

a company has liabilities of $23,500 and stockholders' equity of $56,500. How much does the company have in assets?

56700-26700=30000/56700=*52.9%*

a company has net sales of $56,700 and a cost of goods sold of $26,700. the company's gross profit percentage is approximately:

outweighs the benefits of the system

a company may be limited in their internal control procedures because the cost of hiring enough people to implement the procedures:

$10,400: 1/estimated useful life x 2 x book value at the beginning of the year= depreciation expense per year.

a company purchased furniture on Jan. 1, 2012. its cost was $15,600 and it had residual value of $1,600. Its useful life is determined to be 3 years. using double-declining balance depreciation, the depreciation for 2012 to the nearest dollar will be

reduces the risk of undetected errors

a good internal control system does which of the following?

LIFO method

a method of valuing inventory based on the assumption that the newest goods will be sold first is called the

FIFO method

a method of valuing inventory based on the assumption that the oldest goods will be sold first is called the

specific cost method

a method of valuing inventory based on the costs for each individual item is called

specific-identification method of inventory costing

a new car lot would probably cost its inventory using the _____method of inventory costing

cumulative preferred stock

a type of stock that pay dividends in arrears is: cumulative preferred or common stock

accrued revenue

accounts receivable (asset) would be an example of

liabilities

all payables are listed as...

rationalization

an employee's moral beliefs make it impossible to commit a fraud. this contradicts which part of the fraud triangle?

intangible assets

assets that cannot be seen, touched, or held are called

($3,500) 29,500-33,000=(3,500) sales-expenses

beginning retained earnings are $65,000; sales are $29,500; expenses were $33,000 and dividends paid are $3,500. How much is the net income or loss for the company?

ensure larger bonuses to upper management at year-end

besides using the overstatement of earnings to inflate a company's stock price, overstating earnings may also:

secured bonds

bonds that are backed by collateral are: callable bonds, secured bonds, unsecured bonds, or convertible bonds?

unsecured bonds

bonds that are backed only by the credit of the issuing company are: collateral bonds, callable bonds, unsecured bonds, or term bonds?

convertible bonds

bonds that can be exchanged for stock are called: debenture bonds, convertible bonds, callable bonds, or serial bonds?

callable bonds

bonds that may be retired at a prearranged price are called: convertible bonds, callable bonds, term bonds, or secured bonds?

depreciated

buildings, vehicles, and desks are: amortized, depleted, expensed, or depreciated

$47,304 -50 43267-5288+9325

casey Company's bank statement shows a bank balance of $43,267. the statement shows a bank service charge of $50. Casey's book balance shows outstanding checks of $5,288 and deposits in transit of $9,325. the bank side reconciliation would show cash of:

depleted

coal, oil, and timber are depreciated, depleted, amortized, or expensed

perceived pressure

committing a fraud because of a drug habit or living beyond your means is an example of

left side of the account

debit means:

added to the bank balance

deposits in transit are: subtracted or added to the book or bank balance

assets

expenses paid in advance such as rent and insurance are classified as prepaid expenses. into what category are they placed?

long-term liabilities and equity accounts

financing activities affect: long-term liabilities and equity accounts or current and long-term liabilities

rationalization

finding good reasons for doing things that we really know are wrong is an example of:

cost of goods sold is overstated and net income is understated in Period 1

if Period 1 ending inventory is understated then,

par

if a bond 's stated rate of interest is equal to the market rate of interest, the bond will be issued at:

cash basis of accounting

if a business records expenses when paid, the company is using the

accrual basis of accounting

if revenues are recognized and recorded when earned, the company is using the

discount

if the market rate of interest is greater than the bond's stated rate of interest, the bond will be issued at: 5<10

operating

in order to be successful over the long run, the main source of a company's cash must come from: operating, financing, or investing accounts?

2nd

inventory errors cancel out at the end of ____ accounting periods

asset

inventory for a merchandising business is classified as an

long-term assets

investing cash flows affect: long-term assets, current assets and current liabilities, equity accounts, or long-term liabilities

capital leases

leases that are treated as financed purchases are called: revenue leases, expensed leases, capital leases, or operating leases?

not treated as fixed assets

long-term investments (assets) by a corporation are: not treated as fixed assets, amortized, depreciated, or depleted

preemption

maintaining their proportionate share in the ownership of a corporation when new stock is available to be purchased is an example of which stockholder right?: preemption, vote, liquidation, or dividends?

$33,350----> 125000-10000=115000/50000=2.3 x 14500=33350

meranda corporation purchases a machine for $125,000.it has an estimated salvage value of $10,000 and is expected to produce 50,000 units in its lifetime. during the first year of operation, it produced 14,500 units. to the nearest dollar, the depreciation for the first year under the units of production method will be

liabilities

obligations that are owed to others due to past transactions are categorized as

Balance sheet

of the financial statements, which is dated as of a specific date?

assets

of the following, which are reported on the balance sheet? assets, expenses, net income or net loss, or revenues

current assets and current liabilities

operating cash flows affect: current assets and current liabilities, long-term assets, long-term liabilities, or equity accounts?

subtracted from the bank balance

outstanding checks are added or subtracted to or from bank balance

amortized

patents, goodwill, and trademarks are: depreciated, depleted, amortized, or expensed

regardless of method inventory

physical inventory counts must be done

deferred expense

prepaid rent (asset) would be an example of

permanent, temporary, and permanent

respectively, cash(asset) rent expense, and accounts payable (liability) are: temporary or permanent assets permanent and liability temporary

paid-in capital

stockholders' stake in stock appears in: paid-in capital, cash, owner's equity, and retained earnings.

general ledger

the _____ keeps a running balance of an individual account

retained earnings

the account to which revenue and expenses are closed is called

assets, liabilities, and stockholder's equity

the accounts that are NOT closed are:

balance sheet approach

the aging method is called AB

subtracting $9 from the bank balance

the bank recorded a $56 deposit as $65. this bank error would be corrected by: adding or subtracting $9 to or from the bank balance

cash reported on the balance sheet and the accrual based income statement

the cash flow statement is the communicating link between the:

perceived opportunity

the chance to commit a fraud, conceal it, and avoid punishment is an example of:

0.456 current assets/current liabilities

the company has current assets of $35,600, total assets of $67,000 and current liabilities of $78,000. the company's current ratio is approximately:

income statement

the cost of goods sold accounts appears on the

straight-line method

the depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of month or years is called

that it may help to increase the stock price of a company

the goal of overstating earnings by using fraud is:

general ledger

the information from the general journal is transferred to the:

dividing cost of goods sold by average inventory cogs/average inventory

the inventory turnover rate is computed by

declaration

the liability "dividend payable" is recognized on the date of: record, declaration, stock issue, or payment

income statement approach

the percent-of-sales method is called the PI

how cash was received and used during the period

the purpose of the statement of cash flows is to show:

debit, credit, debit

the retained earnings accounts of dividends (debit), revenues (credit), and expenses (debit) have normal balances of.... Debit=ADE Credit=LEQR

managerial

the statement of cash flows reports the sources and uses of cash from all of the following EXCEPT: financing, investing, managerial, or operating

income statement

this reports the results of operations for a specific period

only known when a physical count is taken

under the periodic inventory method, the amount of inventory is

deferred revenue

unearned subscriptions revenue would be an example of

$3,570

using a 360-day year, the maturity value of a 90 day note for $3,500 at 8% annual interest is: 90/360=.250 x .08 x 3500= 70 + 3500= 3570

accrued expense

wages payable (liability) would be an example of

short-term liabilites

wages payable, income taxes payable, and accounts payable are:

cash

which is not included in paid-in capital?: additional paid-in capital, cash, common stock, or preferred stock?

operating

which of the following activities is computed differently using the two methods of formatting a statement of cash flows? financing, operating (indirect), investing, or both operating and investing?

corporations

which of the following are considered to be legal entities that exist separate and distinct from their owners?: organizations with more than 100 partners, partnerships, corporations, or sole proprietorships?

Balance sheet

which of the following financial statements illustrates the accounting equation? A=L+SE

FOB shipping point

which of the following indicates that the shipment is free on board and the buyer pays all of the shipping and freight costs? BP

FOB destination

which of the following indicates that the shipment is free on board and the seller pays all of the shipping and freight costs? SD

date of issuance

which of the following is NOT a date associated with dividends?: date of issuance, date of record, date of declaration, or date of payment? (declaration, record, payment)

buying land

which of the following is NOT a part of financing activities? paying off loans, issuing stock, paying dividends, or buying land?

paying dividends

which of the following is NOT part of operating activities? paying utilities, earnings revenue, paying payables, or paying dividends?

realization

which of the following is NOT part of the fraud triangle? perceived opportunity, rationalization, realization, or perceived pressure

mortgage payable

which of the following would NOT be considered a contingent liability? pending a legal action, cosigning a loan, potential fines from the EPA, or mortgage payable?

land

which of the following would NOT be considered an intangible asset? franchise, goodwill, copyright, or land

timber

which of the following would be considered a natural resource? wheat, livestock, corn, or timber

separation of duties

which of the following would be considered a part of control activities in an internal control system? locating weaknesses in an internal control system, having a leadership philosophy, separation of duties, having large quantities of cash on hand?

stock split

which of the following would be used to decrease the par value of a company's stock?: sale of additional stock, stock split, stock dividend, or cash dividend?

Corporation

which type of organization has stockholders?

GAAP

The guidelines that describe the rules of accounting are called

decrease on debit side, increase on credit side and are liabilities

Accounts payable (credit), taxes payable (credit), and notes payable (credit): increase or decrease on debit or credit side and are expenses, revenues, liabilities, or assets?

known liability

Accounts payable would be an example of a: known liability, accrued liability, estimated liability, or contingent liability?

cost of goods sold available for sale

Beginning inventory + net purchases =

Accounting

GAAP is the acronym for generally accepted ______ principles

LIFO (pay less, get less)

In order to pay the least income tax possible in periods of rising inventory costs, the company should use which of the following inventory costing methods?

assets

Land, cash, office equipment and accounts receivable belong to what category of accounts?

subtracted from the book balance

NSF check amounts are added or subtracted from book balance

add $450 to their book balance

PNC bank collected a $450 note from a customer for ABC company. When doing the bank reconciliation, ABC should

$48,000 preferred stock paid-in preferred common stock paid-in common no retained earnings

RH corporation stockholders' equity section includes the following information: preferred stock- $11,000 paid-in capital in excess of par-preferred- 17,000 common stock-16,000 paid-in capital in excess par-common-4,000 retained earnings- 7,000 total paid-in capital is?