Accounting Final 41-80

In the first month of operations, the total of the debit entries to the cash account amounted to $7,000 and the total of the credit entries to the cash account amounted to $4,000. The cash account has a

(C) $3,000 debit balance

During January 2017, its first month of operation, Osborn Enterprises earned net income of $6,800 and paid dividends to the owners of $2,000. At January 31, the balance in Retained Earnings will be

(C) $4,800 credit

When a perpetual inventory system is used, which of the following is a purpose of taking a physical inventory?

(A) To check the accuracy of the perpetual inventory records

Leyland Realty Company received a check for $18,000 on July 1, which represents a 6-month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $18,000. Financial statements will be prepared on July 31. Leyland Realty should make the following adjusting entry on July 31

(A) debit Unearned Rent Revenue, $3,000; credit Rent Revenue, $3,000

One of the accounting concepts upon which adjustments for prepayments and accruals are based is

(A) expense recognition

Prepaid expenses are

(A) paid and recorded in as asset account before they are used or consumed

Using accrual accounting, expenses are recorder and reported only

(A) when they are incurred whether or not cash is paid

Manufactured inventory that has begun the product process but is not yet completed is

(A) work in progress

Conway Company purchased merchandise inventory with an invoice price of $12,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period?

(B) $11,760

Barnes Company showed the following balances at the end of its first year.... What amount did Barnes Company show as a total credit?

(B) $41,400

During February 2017, its first month of operations, the owner of Schwenn Enterprises invested cash of $100,000. Schwenn has cash sales of $20,000 and paid expenses of $35,000. Assuming no other transactions impacted the cash account, what is the balance in cash at February 28?

(B) $85,000 debit

If Hostell Company has net sales of $500,000 and cost of goods sold of $350,000, Hostell's gross profit rate is

(B) 30%

Crowder Corporation recorded the return of $200 of goods originally sold on credit to Discount Industries. Using period inventory approach, Crowder would record this transaction as

(B) Sales Returns and Allowances 200 Accounts Receivable 200

The expense recognition principal matches

(B) expenses with revenues

If a company is given credit terms of 2/10, n/30, it should

(B) pay within the discount period and recognize a savings

Andrea Fashions sold merchandise for $190,000 cash during the month of July. Returns that month totaled $4,000. If the company's gross profit rate is 40%, Andrea's will report monthly net sales revenue and cost of goods sold of

(C) $186,000 and $111,600

On July 1 the Fisher shoe Store paid $24,000 to Acne Realty for 6 months rent beginning July 1. Prepaid rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by the Fisher Shoe Store is

(C) debit Rent Expense, $4,000; credit Prepaid Rent, $4,000

Greese Company purchased office supplies costing $7,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $2,500 still on hand. The appropriate adjusting entry to be made at the end of the period would be

(C) debit supplies expense, $4,500; credit supplies, $4,500

The entry to record the return of goods from a customer would include a

(C) debit to Sales Returns and Allowances

Which of the following items does not result in an adjustment in the merchandise inventory account under a perpetual system?

(C) payment of flight costs for goos shipped to a customer

The journal entry to record credit sale ignoring cost of goods sold is

(D) Accounts Receivable Sales revenue

The primary difference between a periodic and perpetual inventory system is that a periodic system

(D) determines the inventory on hand only at the end of the accounting period

Stan's Market recored the following events involving a recent purchaser of inventory: Received goods for $120,000, terms 2/10, n/30 Returned $2,400 of the shipment for credit Paid $600 freight on the shipment Paid the invoice within the discount period As a result of these events, the company's inventory

(D) increased by $115,848

Adjusting entries affect at least

(D) one income statement account and one balance sheet account