Accounting JPCU

Cash flows from operating activities include:

changes in accounts receivable

Ownership structure can vary from one company to another, but the most basic form of corporation offers:

common stock.

Accumulated Depreciation is classified as a

contra-asset account.

The Accumulated Depreciation account is a

contra-asset account.

The control components used by companies as a framework when analyzing their internal control systems include:

control environment.

An asset's book value or carrying value is its:

cost minus accumulated depreciation.

Which of the following statements about normal account balances is correct?

Assets have debit balances and liabilities have credit balances.

Which of the following is an activity in the operations of a manufacturer, but not in the operations of a merchandising or service company?

Buving raw materials

What is the purpose of the statement of cash flows?

It is intended to provide a cash-based view of a company.

Which of the following statements about an adjusted trial balance is correct?

It is used to prepare financial statements.

Transactions are entered into a ____ each day they occur.

Journal

What kind of account is Deferred Revenue?

Liability

Who has primary responsibility for making sure that a company's financial statements follow GAP?

Management

Which of the following would be included in the raw materials inventory of a company making ice cream?

Milk and cream used to make the ice cream.

Which of the following is not a specific account in a company's chart of accounts?

Net Income

Which of the following line item amounts would be under the Retained Earnings column of a Statement of Stockholders' Equity?

Net Income

When preparing the balance sheet for Papago Company for December 31, 2021, which item would not be classified as a current liability?

Note payable due March 1, 2023

If a company borrows money from a bank and signs an agreement to repay the loan several years from now, in which account would the company report the amount borrowed?

Notes Payable (long-term)

Which of the following would not be included in the cash and cash equivalents amount reported on the balance sheet?

Notes Receivable due in 90 days

In the U.S., public companies must be audited by independent auditors using rules approved by the

Public Company Accounting Oversight Board (PCAOB).

An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual is a

bank reconciliation.

An asset's cost minus accumulated depreciation is its value.

book

EPS is a good predictor of:

future stock prices.

Deferred Revenue is a liabilitv because:

goods or services have been paid for, but not yet provided to the customer.

The Accounts Payable account:

has a normal credit balance.

The fraud triangle contains three elements that must exist for accounting fraud to occur. The elements are:

incentive, opportunity, and rationalization.

Expenses are reported on the:

income statement in the time period in which they are incurred

The financial statement that reports revenues and expenses is the:

income statement.

Treasury stock is reported in the:

stockholders' equity section of the balance sheet.

Permanent accounts are found on:

the balance sheet.

Dividing the long life of a company into shorter periods such as months, quarters, or years for reporting purposes is called the:

time period assumption.

Par value of a stock refers to the:

value assigned to a share of stock in the corporate charter.

The direct write-off method for uncollectible accounts:

violates the expense recognition princiole.

A process for approving and documenting all purchases and payments on account is referred to as a

voucher system.

Which of the following accurately describes the treatment of ordinary and extraordinary repairs?

Ordinary repairs are expensed as incurred; extraordinary repairs are treated as a capital expenditure.

Which of the following events does not create a liability?

Remitting sales tax to the government

All of the following are a part of contributed capital except:

Retained Earnings

Which of the following line items appear on an income statement?

Revenues

Consider the following journal entry: debit Software credit Cash credit Notes Payable 18,000 7,200 10,800

The company buys $18,000 of software, pays cash of $7,200, and signs a note for $10,800

Contingent liabilities arise from past transactions, but depend on future events.

True

Cost of goods sold = Beginning inventory + Purchases - Ending inventory

True

Deferred Revenue is reported on the balance sheet as a liability.

True

Dividing up the continuing life of a company into shorter periods is called the time period assumption.

True

Ending inventory = Beginning inventory + Purchases - Cost of goods sold

True

FOB shipping point means that ownership of goods passes to the buyer when the goods leave the seller's place of business.

True

GAAP does not allow cash basis accounting to be used in external financial reports.

True

If inventory is sold with terms of FOB shipping point, the goods belong to the customer while in transit.

True

In a perpetual inventory system, the cost of goods sold is recorded as each sale occurs.

True

Internal controls include the policies and procedures a company implements to promote efficient and effective operations, protect assets, enhance accounting information, and adhere to laws and regulations.

True

Inventory is reported on the balance sheet as a current asset.

True

Issuing stock to obtain financing is called equity financing.

True

The Sarbanes-Oxley Act (SOX) requires external auditors to test the company's internal control system.

True

The allowance method for uncollectible accounts is used for both accounts receivable and notes receivable.

True

The perpetual inventory system uses the Inventory account to keep track of the amount of inventory that is purchased.

True

Treasury stock is a corporation's own stock that has been issued and subsequently repurchased by the corporation.

True

Under the five-step revenue recognition model, a contract can be written, verbal, or implied.

True

When a company sells goods, it removes their cost from the Inventory account and reports the cost on the income statement as Cost of Goods Sold.

True

When a periodic inventory system is in use, the Inventory account is updated only at the end of the period.

True

Which of the following statements about financing activities is not correct?

When a company repays a loan, it reports a cash inflow from financing activities.

A company's financial records at the end of the year included the following amounts:

$104,400

Coast Company has 5,000 items of building supplies on hand that cost $150,000; a bill related to these supplies totaling $50,000 from a vendor has not yet been paid. The company expects to earn $400,000 for its services when it uses the building supplies. The company's balance sheet would include an asset, Supplies, in the amount of:

$150,000.

Which of the following would be listed as a current liability?

Accounts Payable

MacKenzie Manufacturing purchased equipment for $160,000. In addition, shipping charges of $2,000 were incurred to obtain the equipment. The company paid $12,500 to construct a foundation and install the equipment. The equipment is estimated to have a residual value of $15,000 at the end of its 5-vear useful life. Using the straight-line method, what is the amount of depreciation expense each year?

$31,900

Zorn Incorporated makes a sale for $390. The company is required to collect sales tax of 10%. What is the amount that will be credited to the Sales Tax Payable account?

$39

The unadjusted trial balance at the end of the year includes the following: Accounts Receivable Allowance for Doubtful Accounts $ 100,000 1,200

$4,900

Cash had a beginning balance of $70,700. During the month, Cash was credited for $16,180 and debited for $18,840. At the end of the month, the balance is:

$73,360 debit.

MacKenzie Manufacturing purchased equipment for $160,000. In addition, shipping charges of $2,000 were incurred to obtain the equipment. The company paid $12,500 to construct a foundation and install the equipment. The equipment is estimated to have a residual value of $15,000 at the end of its 5-year useful life. Using the straight-line method, what is the book value of the equipment at the end of the third full year of use?

$78,800

Liabilities reported on the balance sheet include:

Accounts Payable, Notes Payable, and Salaries and Wages Payable.

The Allowance for Doubtful Accounts account is a contra-account that offsets:

Accounts Receivable.

Which of the following is the best measure of a company's profitability?

Accrual-based net income

all of the transactions of Harding Trading Company for the year have been journalized and posted. The following information has been gathered for the adjustment process as of December 31, 2022: A) The Supplies account shows a balance of $900. A count of supplies revealed $400 on hand. B) The $1,200 premium relating to a one-year insurance policy was paid on December 1, 2022. C_) The company's equipment, which was purchased last year, depreciates at a rate of $1,000 per year. D) On September 30, 2022, a customer paid $10,000 in advance for services; as of December 31, 2022, services in the amount of $3,000 had been performed for this customer. E) Employees are paid $5,000 on Fridays for the 5-day workweek, which ends on that Friday. However, December 31, 2022 falls on a Thursday. F) The company has completed $500 of work for customers; the customers have not yet been billed and the related revenue has not been recorded. Required: Prepare the adjusting entries required at December 31, 2022. For each of the adjusting items, indicate the amount and the direction of effects of the adjusting journal entry on the elements of the balance sheet and income statement. Complete the following table by entering the amount and the direction (+ for increase, − for decrease) or leave blank for no effect.

A Decrease B No Change C Decrease D Increase E No Change F Increase

Which of the following items is considered to be a cash equivalent?

A one-month Treasury bill due in two weeks.

The following summarizes the aging of accounts receivable for Johnston Supplies, Incorporated as of July 31, 2022: Number of Days Unpaid Not yet due 1 to 30 days past due 31 to 60 days past due Over 60 days past due Total Accounts Historical : Receivable Uncollectible $ 126,500 2% 89,200 12% 53,600 18% 31,800 35%

A. Allowance Balance 28,947 Difference 5,065 B. Debit 3.081 Credit 34.012 C. Balance 34.012-3.081=30.931 (NEEDS JOURNAL ENTRY)

Which method for estimating bad debts is generally considered to be the most accurate?

Aging of accounts receivable method

Accounts Receivable, Net (or Net Accounts Receivable) equals Accounts Receivable (gross) minus:

Allowance for Doubtful Accounts.

Which of the following is not a characteristic of tangible long-lived assets?

Amortized over their useful lives

Which of the following are the three basic elements of the balance sheet?

Assets, liabilities, and stockholders' equity.

Which of the following is an operating activity?

Billing customers for services rendered but not yet paid for

Which of the following statements about an auto manufacturer's inventory is not correct?

Cars that have been sold to dealers would be included in finished goods inventory.

Which of the following is included in the financing activities on a statement of cash flows?

Cash dividends paid.

Which of the following would be included in cash flows from operating activities?

Cash received from customers.

Employee fraud includes which of the following categories?

Corruption

Who has first claim to a business's assets should the company go out of business?

Creditors

Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1. Brickyard signs a $200,000, 4%, 9-month note. Interest is due at matur On January 1, which of the following journal entries will be made by Brickyard to record the issuance of the note?

Debit Cash and credit Notes Payable for $200,000.

Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1. Brickyard signs a $200,000, 4%, 9-month note. Interest is due at maturity on September 30. The company's fiscal year ends June 30 and adjusting entries are recorded at that time only. What adjusting entry should Brickyard make on June 30 before preparing its annual financial statements?

Debit Interest Expense and credit Interest Payable for $4,000.

Shaylee, Incorporated borrowed $62,000 from a bank, depositing those funds in its bank account and signing a formal agreement to repay the loan in two years. What is the correct journal entry for this transaction?

Debit cash and credit notes pavable for $62.000

Which of the following statements about an adjusted trial balance is correct?

Debits should equal credits both before and after adjustments are made.

Which of the following accounts would be classified as a current liability on a classified balance sheet?

Deferred Revenue

The stockholders' equity section of the balance sheet includes all of the following except:

Dividends.

Which one of the following is not a current asset?

Equipment

Which of the following must be paid by both the employee and the employer?

FICA taxes

The gross profit percentage is computed by dividing operating income by net sales.

False

The receivables turnover ratio is calculated as: Average net receivables divided by Net sales.

False

In the U.S., Generally Accepted Accounting Principles (GAAP) are established by the:

Financial Accounting Standards Board (FASB). V

Which of the following intangible assets has an unlimited life?

Goodwill

Which of the following statements about payroll is correct?

Gross earnings are computed by multiplying the time worked by the pay rate promised by the employer.

Which of the following is a service company?

H&R Block

Identify whether each of the following list of items is an operating activity cash flow (O), an investing activity cash flow (I), a financing activity cash flow (F), or none of these (None).

I DONT KNOW but this is what i got: 1. 1 2. 0 3. 0 4 F 5 F 6. 0 7 1 8. 1 9. 0 10. F

Choose the appropriate letter to match the characteristics with the type of company. A given characteristic may match more thi company.

I dont know

Selected accounts for Moonbills Corporation appear below. Required: For each account, indicate the following: In the first column, indicate the nature of each account, using the following abbreviations: Asset - A, Liability - L, Stockholders' Equity - SE. In the second column, indicate the normal balance by inserting dr (for debit) or cr (for credit).

I dont know

Preferred stock has some distinctly different characteristics from common stock. Which of the characteristics below is not related to preferred stock?

It generally has voting rights.

Which of the following is the set of laws enacted by the government to strengthen corporate reporting in response to the Enron, WorldCom and other frauds?

Sarbanes-Oxley Act

Which of the following classifications is not used on the statement of cash flows?

Spending

Which of the following expressions of the accounting equation is correct?

Stockholders' Equity = Assets - Liabilities

Which of the following statements about the need to make accrual adjustments at the end of the accounting period is not correct?

The Cash account should be adjusted for the effects of accrued revenues and expenses during the accounting period.

Which of the following is a characteristic of a partnership?

The profits, taxes, and legal liability are the responsibility of two or more owners.

Which of the following statements about the statement of cash flows is not correct?

The statement of cash flows is contained in the notes to the financial statements

Which of the following statements about the debit/credit framework is correct?

The total value of credits in all accounts must always equal the total value of debits in all accounts.

What is the main goal of GAAP?

To ensure that the financial information produced by companies is useful to existing and potential investors and other parties in decision making.

If a company wants exclusive rights to a special name, image or slogan, it should obtain a:

Trademark

Current liabilities could include all of the following except:

a bank loan due in 18 months.

Sales tax collected by a company is normally reported as:

a current liability.

Removing an uncollectible account and its corresponding allowance from the accounting records is called:

a write-off.

For the employee, net pay is equal to gross earnings minus:

all payroll deductions.

An economic resource that is controlled by a company and will provide future benefits is referred to as:

an asset

Cash and cash equivalents include assets that:

are short-term. highly liguid. and ourchased by the entity within three months of maturity

Which of the following are similarities between a six-month note receivable and an account receivable? They both are:

current assets.

Obligations due to be paid within one year or the company's operating cycle, whichever is longer, are classified as:

current liabilities

The potential disadvantages of extending credit include all the following except:

customers buving too much.

Matching part of the cost of a long-lived asset with the revenues generated by the asset is:

depreciation.

Collusion occurs when:

employees work together to get around internal controls.

Recording depreciation is an application of the:

expense recognition principle ("matching").

A remittance advice

explains the purpose of a customer's payment.

An attempt to deceive others for personal gain is known as

fraud.

The purpose of recording an adjusting entry for salaries and wages is to record wages:

incurred but not yet paid.

When a company issues stock to the public for the first time, the issuance is called a

initial public offering (IPO).

Interest Receivable:

is an asset reported on the balance sheet.

The Accounts Receivable account:

is increased by a debit.

Goodwill:

is not amortized but is tested annually for impairment.

On the balance sheet, the Allowance for Doubtful Accounts:

is subtracted from AccountsReceivable.

Cash flows from financing activities can include:

issuing long-term debt

The obligations and debts of a business are referred to as:

liabilities.

Internal users of financial data include:

management.

Intel makes microchips from raw materials acquired from suppliers. Intel is a:

manufacturer.

The primary source of revenues and expenses comes from:

operating activities.

A sole proprietorship is:

owned and operated by one individual.

The right to exclude others from making or using an invention is a:

patent.

The balance sheet category "Intangible Assets" includes:

patents, trademarks, and franchises.

The straight-line depreciation method:

reports an equal amount of depreciation expense each ear.

Accounts Receivable should be increased for

revenues earned during the period but not yet collected.