Accounting test 2

In preparing a bank reconciliation, all of the following would be used to adjust the balance per books, EXCEPT: A. Interest on bank accounts B. Bank service charges C. Customer note collected D. Deposits in transit E. NSF customer checks

Deposits in transit

Which of the following accounts would not have have a balance on the Post Closing Trial Balance? A. Dividends B. Prepaid expenses C. Retained Earnings D. Unearned revenues E. Accumulated depreciation

Dividends

Which of the following accounts are considered permanent accounts? A. Land and Accounts Receivable B. Common Stock and Salary Expense C. Accounts Payable and Service Revenue D. Inventory and Cost of Goods Sold

Land and Accounts Receivable

Adjusting entries: A. close the revenue accounts. B. adjust Cash. C. adjust Unearned Revenue. D. close the expense accounts.

adjust Unearned Revenue.

A deferred expense could also be called A. a liability. B. a contra revenue. C. a contra asset. D. an accrued expense. E. an asset.

an asset.

Which account is credited in the adjusting entry to allocate the cost of equipment? A. Equipment Expense B. Accumulated Equipment C. Depreciation Expense-Equipment D. Accumulated Depreciation-Equipment

Accumulated Depreciation-Equipment

Which of the following accounts would have balances on a post closing trial balance? A. Loss on Sale of Equipment B. Dividends C. Utilities expense D. Interest revenue E. Accumulated depreciation

Accumulated depreciation

A doctor performed surgery in March and did not receive cash from the patient until July. Under accrual accounting, the doctor recognizes revenue: A. in July. B. in March. C. in either March or July. D. at a time that cannot be determined from the facts

in March

Under accrual accounting, revenue is recorded: A. when the services are performed, regardless of when the cash is received. B. at the end of every month. C. only if the cash is received at the same time the services are performed. D. when the cash is received, regardless of when the services are performed.

when the services are performed, regardless of when the cash is received.

The following balance sheet items, listed in alphabetical order, are available from the records of Breaking Bad Company as of December 31, 2015. Total total non-current assets is $[ ].

425000 (BUILDINGS - DEPRECIATION BUILDINGS = A EQUIPMENT - DEPRECIATION EQUIPMENT = B A+B+PATENTS=425000)

Bagel Corp. billed a customer $125,000 for service performed during the month of September. The journal entry to reflect this billing would be: Use the following abbreviations for accounts to fill in the blanks: CA = Cash AR = Accounts Receivable AP = Accounts Payable SR = Service Revenue UR = Unearned Revenue Debit [ ] and Credit [ ].

Debit AR and Credit SR

On September 19, Beagle Corp. received payment of $40,000 for services provided to a customer in August. The September 19 journal entry would be: Use the following abbreviations for accounts to fill in the blanks: CA = Cash AR = Accounts Receivable AP = Accounts Payable SR = Service Revenue UR = Unearned Revenue Debit [ ] and Credit [ ].

Debit [CA] and Credit [AR].

A type of liability resulting from the receipt of cash before the recognition of revenue is A. an accrued liability B. an accrued asset C. a deferred revenue D. a deferred expense E. a cost allocation

a deferred revenue

Prepaid expenses will become ________ when their future benefits expire. A. expenses B. revenues C. assets D. liabilities

expenses

Accounts that relate to a limited period of time are called: A. asset and liability accounts. B. temporary accounts. C. permanent accounts. D. real accounts.

temporary accounts.

With an accrual of revenue: A. plant assets can create an accrual adjustment. B. the cash is received before the revenue is recorded. C. the cash is received after the revenue is recorded. D. prepaid expenses can create an accrual adjustment.

the cash is received after the revenue is recorded.

An accrued asset could also be called A. a prepaid expense. B. an accrued expense. C. a deferred expense. D. an accrued revenue. E. an accrued contra asset.

an accrued revenue.

Given the following activity for Caprock Company during the month of February, how much total expense would Caprock Company recognize on the February income statement using accrual accounting? Feb. 1 Caprock paid a total of $3,000 for 3 months of automobile insurance. The coverage on the insurance policy included the months of February, March, and April. Feb. 5 Caprock paid $5,000 to its landlord for February rent. Feb. 10 Caprock paid $4,000 on an accounts payable that had been recorded in January. Feb. 27 Caprock received the bill for the February utilities, and recorded $5,000 in accounts payable on that date. The bill will be paid in March. A. $14,000 B. $11,000 C. $12,000 D. $10,000 E. $17,000

$11,000 (Feb 1. 3,000/3 = 1000 Feb 5. rent expense = 5,000 Feb 27. utilities expense = 5,000 add all)

On September 1, Tucker Inc. received $30,000 from a customer who would like Tucker to provide services evenly over the next five months. Using the revenue recognition principle, how much would Tucker record as revenue for the year from this job? A. $30,000 B. $24,000 C. $6,000 D. $18,000 E. $0

$24,000 ($30,000/5 MONTHS=6000 $30,000-6000= )

The following balance sheet items, listed in alphabetical order, are available from the records of Breaking Bad Company as of December 31, 2015. Total total current liabilities is $[ ].

$450000 (Accounts payable= 300000 Income taxes payable=50000 Interest payable = 100000)

During the month of October, Labrador, Inc. provided $300,000 of services for cash and $500,000 of services on account. Also during October, Labrador's customer paid $400,000 on their accounts. How much should Labrador report as revenues for October? A. $800,000 B. $500,000 C. $400,000 D. $300,000 E. $700,000

$800,000 (cash+services on account)

Use the following data to answer the question presented below for Linda Company's preparation of a bank reconciliation on October 31, 2015: Bank Statement balance: $12,800 Outstanding checks: 8,400 NSF checks: 5,200 Service charges: 400 Deposits in transit: 3,500 Interest earned on checking account: 100 What is the adjusted cash balance on October 31, 2015?

(Bank statement balance + Deposits in transit -Outstanding checks) 7,900

Movie 16 Theaters, Inc. has the following information for March 31, 2016: balance per the company records, $8,684; outstanding checks of $14,400, a deposit in transit of $5,220, bank service charge of $310, and NSF checks of $4,225. What is the adjusted cash balance? (Do Not enter dollar signs.)

(balance per the company records-bank service charge-NSF checks) 4,149

The Marjan Company's bank statement showed a balance of $14,087 on March 31, 2017. In searching its records and the bank statement, Marjan found the following: Outstanding checks: $856 Bank service charges: 80 Non-sufficient funds checks: 907 Deposits in transit: 1,640 Customer note collected by the bank: 1,020 Based on this financial information, what should be the adjusted bank balance on the bank reconciliation?

14,871 (BALANCE: $14,087 ADD DEPOSITS SUB OUTSTANDING CHECKS)

Andy, Inc. was in the process of reconciling its bank balance with the company records and found an unadjusted book balance of $17,120, outstanding checks of $2,065, non-sufficient funds (NSF) checks of $508, deposits in transit of $1,650, bank service charges of $75, a customer note collected by the bank of $3,000 and interest on the note collected of $40. The adjusted book balance on the bank reconciliation should be? (Do not enter dollar signs.)

19,577 (Balance as per Books 17120 (Add): customer note received 3000 (Add):collection of note interest by bank 40 (Less):Non Sufficient Funds 508 (Less):Bank charges 75)

On October 31, 2016, Siri Studios, Inc. had a balance per their records of $15,015. In reconciling their October 31, 2016 bank statement, Siri found outstanding checks of $4,500, a deposit in transit of $8,300, NSF checks of $1,400, and bank service charges of $88. Additionally, the October 23rd deposit of $8,100 was incorrectly recorded as $1,800 in the records of Siri. The adjusted cash balance should be? (Do Not enter dollar signs.)

19,827 (Cash balance according to company's records: 15015 Adjustments: Less: NSF Cheque: -1400 Error in recording check: 6300 Bank service charges: -88)

Using the following information determine the amount that Pearson will report as Cash and Cash Equivalents on the Balance Sheet at the end of December. Item Amount Cash is checking account: $10,000 Petty cash: 580 Postage Stamps: 654 Check from customer dated Jan 20, next year: 321 3-month certificate of deposit: 35,000 12- month certificate of deposit: 35,000 Check from customer dated Dec 15, this year: 175 Undeposited Cashier's Checks from customer: 729 IOU from customer: 500 6-month U.S. Treasury bill purchased 4 months ago: 2,500 2-month high-grade Canada government security purchased 1 month ago: 1,000 Cash in savings account: 100 Accounts Receivable: 3,700 1-month U.S. Treasury bill purchased 2 weeks ago: 2,000 Time Deposits: 1,600

51184 (Cash in checking account: 10000 Petty cash: 580 3 month certificate of deposit: 35000 Unrecorded check-Dec 15: 175 Unrecorded cashier's checks from customer: 729 2 month high grade Canada Government: 1000 Cash in savings account: 100 1 month US Treasury bill: 2000 Time deposits: 1600 Cash and cash equivalents: 51184 )

Black and Red Corp. has the following accounts and balances as of December 31, 2017. The total current liability amount is $[ ].

52,000 (Accounts payable= 23,000 Interest payable= 10,000 Customer deposits= 19,000)

On September 1, 2017, Kian Co. recorded an Unearned Revenues account, a liability, for $66,000. This amount represents an amount that a customer paid in advance and the amount will be recognized in Service Fees evenly over a six-month period. The adjusting entry needed on December 31, 2017, would be: Use the following abbreviations for accounts to fill in the blanks: CA = Cash AR = Accounts Receivable SF = Service Fees AP = Accounts Payable UR = Unearned Revenue A Debit to [ ] and a Credit to [ ] for $[ ].

A Debit to [UR] and a Credit to [SF] for $[44,000]. ($66,000/1.5)

What type of account is Accounts Receivable and on which financial statement is it reported? Use the following abbreviations to fill in the blanks: For Account type : A = Asset XA = Contra Asset L=Liability OE = Owners' Equity XOE = Contra Equity R = Revenue E = Expense For Financial Statements IS = Income Statement SRE = Statement of Retained Earnings BS = Balance Sheet CF = Statement of Cash Flows Account type [ ] reported on the [ ]

Account type [Asset] reported on the [Balance Sheet]

What type of account is Dividends and on which financial statement is it reported? Use the following abbreviations to fill in the blanks: For Account type : A = Asset XA = Contra Asset L=Liability OE = Owners' Equity XOE = Contra Equity R = Revenue E = Expense For Financial Statements IS = Income Statement SRE = Statement of Retained Earnings BS = Balance Sheet CF = Statement of Cash Flows Account type [ ] reported on the [ ]

Account type [XOE] reported on the [SRE]

Big Daddy Auto Parts, Inc. has an office supplies account that had a January 1st balance of $13,450. During the year, Big Daddy Auto purchased $24,360 in office supplies. On December 31st, a count of the office supplies revealed that there were $7,500 remaining. On December 31st, Big Daddy's adjusting entry for office supplies should be: Use the following abbreviations for accounts to fill in the blanks: AR = Accounts Receivable AP = Accounts Payable OS = Office Supplies Inventory OE = Office Supplies Expense Debit [a] and Credit [b] for $[c].

Debit [OE] and Credit [OS] for $[30,310]. ($24,360+13,450-7,500)

On November 1, NASA rented some office space in Houston for twelve months paying $30,000 in advance for the 12-month rental. NASA adjusts accounts annually on December 31st for its financial report. The appropriate adjusting entry for NASA's office rent on December 31st would be: Use the following abbreviations for accounts to fill in the blanks: PR = PrePaid Rent CA = Cash AR = Accounts Receivable RE = Rent Expense Debit [] and Credit [] for $[].

Debit [RE] and Credit [PR] for $[5,000].

Which one of the following is an example of an deferred expense? A. Equipment that has a useful life of ten years has been purchased. B. Customers made payments on their accounts. C. Cash has been received from customers for work that is to be completed in future periods. D. The utility bill for the current month has been paid. E. Wages have been earned by employees, but have not been paid at the end of the period.

Equipment that has a useful life of ten years has been purchased.

On March 25, its first day of operations, Ladybug Inc. purchased $1,200 of office supplies on account. On March 31st, Ladybug had $800 of office supplies on hand. On April 5th Ladybug paid for the supplies it had purchased on account on March 25th. Under accrual accounting which of the following statements about recognizing supplies expense is correct? A. Ladybug should recognize $1,200 of supplies expense in March. B. Ladybug should not recognize any supplies expense in March. C. Ladybug should recognize $400 of supplies expense in March. D. Ladybug should recognize $800 of supplies expense in March. E. Ladybug should recognize $1,200 of supplies expense in April.

Ladybug should recognize $400 of supplies expense in March. ($1,200 of office supplies on account-$800 of office supplies on hand)

On a classified balance sheet: A. Salaries Payable is a long-term liability. B. Accounts Receivable is a current liability. C. Notes Payable due in one year is a current liability. D. Dividends is a current asset.

Notes Payable due in one year is a current liability.

Which of the following would be items that would be subtracted from balance per bank in a bank reconciliation: A. Deposit in transit and a customer's NSF check. B. Service charge for a lock box and outstanding checks. C. Deposit in transit, interest earned on an account, and customer NSF check. D. Customer's NSF check and outstanding checks. E. Outstanding checks and a deposit of $1,100 that was recorded as $11,000 by the bank.

Outstanding checks and a deposit of $1,100 that was recorded as $11,000 by the bank.

In preparing a bank reconciliation, all of the following would be used to adjust the balance per books, EXCEPT: A. Error made in company's records. B. Interest on bank accounts. C. NSF customer checks. D. Bank service charges. E. Outstanding checks.

Outstanding checks.

Wolverine, Inc. has the following account balances related to its 2016 operations: Repair Revenues: $840,000 Insurance Expense: $85,000 Wages and Salaries: 240,000 Advertising: 1,500 Depreciation Expense: 13,000 Unearned Revenue: 120,000 Equipment Rentals Revenues: 56,000 Accum. Depreciation: 25,000 Which of these accounts would be debited in the closing entries? A. Wages and Salaries, Depreciation Expense, Insurance Expense, and Advertising only B. Repair Revenues and Equipment Rental Revenues only C. Repair Revenues, Equipment Rental Revenues, and Unearned Revenue only D. Repair Revenues, Equipment Rental Revenues, Unearned Revenue, and Accum. Depreciation only E. Repair Revenues only

Repair Revenues and Equipment Rental Revenues only

The closing entry for the Salaries Expense account includes a debit to: A. Net Income and a credit to Salaries Expense. B. Salaries Expense and a credit to Retained Earnings. C. Retained Earnings and a credit to Salaries Expense. D. Salaries Expense and a credit to Net Income.

Retained Earnings and a credit to Salaries Expense.

The following balance sheet items, listed in alphabetical order, are available from the records of Breaking Bad Company as of December 31, 2015. Total current assets is $[ ].

Total current assets is $[650,000]. (CASH+ACCOUNT RECEIVABLE+MARKET SECURITIES+OFFICE SUPPLIES)

________ will be increased when a company receives cash before performing the services. A. Unearned Service Revenue B. Accumulated Depreciation C. Accrued Salaries Payable D. Service Revenue

Unearned Service Revenue

Badger, Inc. has the following account balances related to its 2016 operations: Repair Revenues: $840,000 Prepaid Expenses: $85,000 Wages and Salaries: 240,000 Dividends: 1,500 Depreciation Expense: 13,000 Unearned Revenue: 120,000 Interest Revenue: 6,000 Accum. Depreciation: 25,000 Which of these accounts would be credited in the closing entries? A. Wages and Salaries, Depreciation Expense, Insurance Expense, and Advertising only B. Repair Revenues, Interest Revenue, and Unearned Revenue only C. Wages and Salaries, Depreciation Expense, and Dividends only D. Repair Revenues and Interest Revenue only E. Wages and Salaries, and Depreciation Expense only

Wages and Salaries, Depreciation Expense, and Dividends only

A deferred revenue could also be called A. an accrued revenue. B. a contra asset. C. an asset. D. a liability. E. a contra revenue.

a liability

Interest payable, income tax payable and salary payable are all examples of: A. retained earnings. B. accrued liabilities. C. prepaid expenses. D. expenses of future periods.

accrued liabilities.

An accrued liability could also be called A. an accrued expense. B. a deferred expense. C. unearned revenue. D. an accrued contra asset. E. an accrued revenue.

an accrued expense.

The entry to close expense account(s) includes a: A. debit to the expense accounts. B. credit to Retained Earnings. C. debit to the revenue accounts. D. credit to the expense accounts.

credit to the expense accounts.

When preparing the financial statements of a company: A. current assets are the most liquid assets. B. the balance sheet must be prepared using the account format. C. the income statement can be prepared using the multistep or report format. D. liabilities are not classified on the balance sheet.

current assets are the most liquid assets.

After the closing entries are prepared and posted: A. the temporary accounts will have debit balances. B. all liability accounts will have a zero balance. C. all asset accounts will have a zero balance. D. the Retained Earnings account will have the correct ending balance.

the Retained Earnings account will have the correct ending balance.

The revenue principle deals with the following: A. when to record revenue and the amount of revenue to record. B. where to record revenue and the amount of revenue to record. C. when to record revenue and where to record this revenue. D. when to record revenue and when to record related expenses.

when to record revenue and the amount of revenue to record.