Accountinggg
On October 1, 2018, Parker, Inc. made a loan to one of its customers. The customer signed a 9-month note for $110,000 at 15%. Calculate the maturity value of the note. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
$122,375
On October 1, 2020, Jewelry Specialists, Inc. made a loan to one of its customers. The customer signed a 9-month note for $ 120,000 at 15%. Calculate the total interest earned on the note. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.
$13,500
The Allowance for Bad Debts account has a credit balance of $8,300 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $ 14,500. What will be the balance of the Allowance for Bad Debts reported on the balance sheet?
$14,500
The Allowance for Bad Debts account has a credit balance of $8,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $14,000. What will be the balance of the Allowance for Bad Debts reported on the balance sheet?
$14000
The cost of an asset is $1,160,000, and its residual value is $150,000. Estimated useful life of the asset is ten years. Calculate depreciation for the second year using the double-declining-balance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)
$185,600
On January 1, 2018, Jordan, Inc. acquired a machine for $1,020,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $59,000. Calculate the depreciation expense per year using the straight-line method
$192,200
On October 1, 2019, Fashion Jewelers accepted a 4-month, 11% note for $7,000 in settlement of an overdue account receivable. The accounting period ends on December 31. Calculate the accrued interest on the note at December 31, 2019. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.
$193
How do you calculate Gross Profit Percentage? (GPP)
1. GPP= (Revenue-(overhead+direct materials+direct labor))/ revenue 2. GP= (Revenue-direct materials)/ revenue
How do you calculate the acid-test ratio?
ATR = (Cash + Accounts Receivable + Short-term Investments) / Current Liabilities
Forever Jewelers uses the perpetual inventory system. On April 2, Forever sold merchandise with a cost of $ 2,500 for $ 7,000to a customer on account with terms of 4/15, n/30. Which of the following journal entries correctly records the sales revenue?
Accounts Receivable 6,720 Sales Revenue 6,720
Which of the following accounts will have an ending balance after the closing process is completed?
Accumulated Depreciation
Which of the following is a requirement of the Sarbanesminus-Oxley Act?
An outside auditor must evaluate the client's internal controls and report on the internal controls as part of the audit report
Outstanding checks
An outstanding check is a check that has been recorded and has already been deducted from the company's book balance, but the bank has not yet paid (deducted). Such checks are shown as "Less: Outstanding checks" on the bank side because when the bank does not record the checks, it will decrease the bank balance.
How do you calculate assets?
Assets= liabilities + stockholder's equity
Regarding impairment of intangible assets, which of the following statements is incorrect?
If any impairment occurs, the company records a loss in the period in which the intangible asset was acquired.
What is a classified balance sheet?
In a classified balance sheet, assets and liabilities are classified as either current (within one year)
The cash ratios of four companies are listed below. Company Cash Ratio Juan Corp. 0.26 Rose, Inc. 0.11 Freelance, Inc. 0.16 Pioneer Corp. 0.29 Which company has the highest ability to repay its current liabilities?
Pioneer Corp
Which of the following statements regarding receivables is correct?
Receivables occur when a business loans money to another party
The Income Summary account has a credit balance of $ 24,000 after the revenue and expense accounts have been closed. Which of the following is credited to close the Income Summary account?
Retained Earnings
To which of the following accounts should the balance in the Income Summary account be closed?
Retained Earnings
Which of the following is a permanent account?
Salaries Payable
Under the perpetual inventory system, the adjusting journal entries to record estimated sales returns (the original sales were on account) would be:
Sales Revenue XX Refunds Payable XX Estimated Returns Inventory XX Cost of Goods Sold XX
Which of the accounts will be closed by crediting the Income Summary account?
Service Revenue
When a company uses the perpetual inventory system ___________.
The Merchandise Inventory account is debited for purchases of goods that the company intends to resell to customers.
Which of the following should not be considered when comparing the Adjusted Trial Balance to the Post-Closing Trial Balance to ensure that no errors were made in the closing process?
The account balances on each of the trial balances are the same.
Alltech Company maintains a separate accounts receivable account for each customer. On June 18, Alltech provides $ 6,100 of services on account to customer Anthony and $2,000 of services on account to customer Walker. How will these two transactions affect the control and subsidiary accounts?
The control account, Accounts Receivable, will be increased with a debit of $ 8100
For each statement below, identify whether the statement applies to the periodic inventory system, the perpetual inventory system, or both.
a. Normally used for relatively inexpensive goods (periodic) b. Keeps a running computerized record of merchandise inventory (perpetual) c. Achieves better control over merchandise inventory (perpetual) d. Requires a physical count of inventory to determine the quantities on hand. (Both) e. Uses bar codes to keep up-to-the-minute records of inventory (perpetual)
The current ratio measures a companys
ability to pay current liabilities from current assets
Public companies _____
are audited by accounting firms that do not also provide certain consulting services to the public company
Which of the following is representative of safeguarding assets?
attaching electronic sensors to merchandise inventory
Woods, Inc. earned revenues of $10,000 and incurred expenses of $6,00. The company declared and paid cash dividends of $3,000. What is the balance in the Income Summary account after closing net income or net loss to the Retained Earnings account?
balance of $0
The document that explains all the differences between the company's cash records and the bank's figures is called a(n)
bank reconciliation
Payment by check is an important internal control over cash payments because
before signing the check, the official reviews the invoice supporting the payment AND the check must be signed by an authorized official
The gain or loss on the sale of a plant asset is determined by comparing the market value of assets received with the ________ of asset sold
book value
Separation of duties is important for internal control of
cash payments AND cash receipts
When recording credit card or debit card sales using the net method
cash received equals sales minus the fee assessed by the card processing company.
How do you calculate operating income?
gross profit-total operating expenses= operating income
Businesses record goodwill _____
if they acquire another company at an amount higher than the market value of its net assets
Assets with no physical form are
intangible assets
Martin Inc. has a cash ratio of 0.3. This implies that the company
is not sending a strong message to investors and creditors that it has the ability to repay its short- term debt
When a company uses the allowance method to measure bad debts, _____
the amount of bad debts expense is estimated at the end of the accounting period
Under the gross method, _________
the processing fees charged are deducted from the company's bank account by the credit card processor
Which of the following is an objective of internal control?
to encourage employees to follow company policies
Which of the following is not an acceptable task for a retail store manager?
using the point-of-sale terminal's tape to record the journal entry for sales revenue
Under the direct write-off method, which of the following is included in the entry to write off an uncollectible account?
a credit to the customer's Account Receivables
Under the direct write-off method, which of the following is included in the entry to write off an uncollectible account?
a credit to the customer's Accounts Receivable
A company that uses the perpetual inventory system purchases inventory for $ 63,000 on account, with terms of 2/10, n/30. Which of the following is the journal entry to record the payment made within 10 days?
a debit to Accounts Payable for $63,000, a credit to Merchandise Inventory for $1,260, and a credit to Cash for $61,740
The petty cash fund had an initial imprest balance of $ 130. It currently has $ 23 and petty cash tickets totaling $ 72 for office supplies. The entry to replenish the fund would contain
a debit to Cash Short & Over for $35 Worked solution: ($130-$23=$35)
A petty cash fund was established with a $ 350 balance. It currently has cash of $ 44 and petty cash tickets totaling $ 306. Which of the following would be included in the entry to replenish the fund?
a debit to various expenses for $306
The bank made an EFT payment of a telephone bill of $5,000. How would this information be included on the bank reconciliation?
a deduction on the book side
On January 1, 2018, McHenry Manufacturing Corporation purchased a machine for $40,800,000. McHenry's management expects to use the machine for 24,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $50,000. The machine was used for 3,700 hours in 2018 and 5,400 hours in 2019. Calculate the book value of the machine at the end of 2019 if the company uses the units- of-production method of depreciation. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
$25,348,928
Danube Corp. purchased a used machine for $ 22,000. The machine required installation costs of $5,000 and insurance while in transit of $1,800. At which of the following amounts would the machine be recorded?
$28,800
Laramie Corporation has acquired a property that included both land and a building for $560,000. The corporation hired an appraiser who has determined that the market value of the land is $330,000 and that of the building is $470,000. At what amount should the corporation record the cost of the building? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.
$330,400
On October 1, 2019, Springfield, Inc. made a loan to one of its customers. The customer signed a 6-month note for $ 100,000 at 15%. How much interest revenue did the company record in 2020 for this note? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
$3750
On October 1, 2018, Equipment Suppliers, Inc. made a loan to one of its customers. The customer signed a 4-month note for $ 150,000 at 12%. How much interest revenue did the company record in the year 2018? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
$4500
Accounts Receivable has a balance of $5,000, and the Allowance for Bad Debts has a credit balance of $410. The allowance method is used. What is the net realizable value of Accounts Receivable after a $170 account receivable is written off?
$4590
The Allowance for Bad Debts has a credit balance of $ 8,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of- receivables method, the company's management estimates that uncollectible accounts will be $14,000. What will be the amount of Bad Debts Expense reported on the income statement?
$6,000
On April 1, 2019, Barnes Services received a 6-month note for $ 12,000 at 11%. Calculate the amount of interest due at maturity. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
$660
A company purchased inventory for $ 72,000 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid the shipper $ 1,800 cash for freight in. The company paid the vendor nine days after the invoice date. If there was no beginning inventory, the cost of inventory would be ________. (Assume a perpetual inventory system.)
$72,360
Long Branch Company's Cash account shows an ending balance of $ 860. The bank statement shows a $ 10 service charge and an NSF check for $ 80. A $ 300 deposit is in transit, and outstanding checks total $350. What is Long Branch's adjusted cash balance?
$770 Worked: $860-($10+$80)=$770
The Allowance for Bad Debts account has a credit balance of $3,000 before the adjusting entry for bad debts expense. The company's management estimates that 3% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $ 280,000. What is the amount of Bad Debts Expense reported on the income statement for 2019?
$8,400
The Allowance for Bad Debts account has a credit balance of $ 2,000 before the adjusting entry for bad debts expense. The company's management estimates that 2% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $ 300,000. What will be the balance of Allowance for Bad Debts on the December 31, 2019 balance sheet?
$8000
A & B Commercial Cleaning is a new business. During its first year of operations, credit sales were $ 40,000 and collections from credit sales were $ 31,000. One account for $ 650 was written off. Management uses the percent-of-sales method to account for bad debts expense and estimates 3% of credit sales to be uncollectible. What is the balance of Accounts Receivable at the end of the first year?
$8350
A company received a bank statement showing a balance of $78,000. Reconciling items included outstanding checks of $2,200 and a deposit in transit of $ 9,400. What is the company's adjusted bank balance?
$85,200
A company received a bank statement showing a balance of $79,000. Reconciling items included outstanding checks of $ 2,200 and a deposit in transit of $ 9,300. What is the company's adjusted bank balance?
$86,100
Which of the following is a plant asset?
Equipment
On January 1, 2017 Hilldale, Inc. had total assets of $366,00. During the year, the company purchased new machinery worth $84,000 and promised to pay the amount due after two years. Throughout the year, it earned revenue of $58,000 every month. Calculate the asset turnover ratio
1.71 times
A company made net sales revenue of $ 550,000 and cost of goods sold totaled $ 192,50. Calculate its gross profit percentage
65%
A petty cash fund was established with a $ 370 balance. It currently has cash of $ 41 and petty cash tickets totaling $ 329. Which of the following would be included in the entry to replenish the fund?
A debit to various expenses for $329
A check of $300,000, deposited by a company, was returned to the bank for nonsufficient funds. How would this information be included on the bank reconciliation?
A deduction on the book side
Deposits in transit (outstanding deposits)
A deposit in transit has been recorded and has already been added to the company's book balance, but the bank has not yet recorded it. These are shown as "Add: Deposits in transit" on the bank side because when the bank does record these deposits, it will increase the bank balance.
Bank collections
Bank collections are cash receipts the bank has received and recorded for a company's account but that the company has not recorded yet on its books. An example of a bank collection would occur when a business has its customers pay directly to its bank. Another example is a bank collecting on a note receivable for a business. A bank collection (which increases the bank balance) that appears on the bank statement will show as "Add: Bank collections" on the book side of the reconciliation because it represents cash receipts not yet recorded by the company.
Bank errors
Bank errors are posting errors made by the bank that either incorrectly increase or decrease the bank balance. All bank errors are corrected on the bank side of the reconciliation by reversing the effect of the errors.
Which of the following is the most liquid asset?
Cash
Which of the following accounts will be included in a post-closing trial balance?
Common Stock
Which of the following line items will appear on the income statement of a merchandiser but not of a service company?
Cost of Goods Sold
The petty cash fund has a current balance of $ 300, which is the established fund balance. Based on activity in the fund, it is determined that the balance needs to be changed to $ 450. Which journal entry is needed to make this change?
Debit the Petty Cash account and credit the Cash account for $150
The petty cash fund has a current balance of $ 350, which is the established fund balance. Based on activity in the fund, it is determined that the balance needs to be changed to $ 500. Which journal entry is needed to make this change?
Debit the Petty Cash account and credit the Cash account for $150
Which of the following statements describes an invoice from a supplier?
It is a statement from the supplier showing the goods purchased and the amount due.
Which of the following statements describes a purchase order?
It is an order to purchase goods from a supplier
Which of the following statements is true of the direct write-off method?
It is only suitable for small companies that have very few uncollectible receivables
Which of the following statements is true of the direct write-off method?
It is only suitable for small companies that have very few uncollectible receivables.
Which of the following is true of the balance sheet presentation of the Allowance for Bad Debts?
It is shown as a contra account related to accounts receivable
What is liquidity?
Liquidity measures how quickly and easily an account can be converted to liquid assets
A business maintains subsidiary accounts for each of its customers. On May 15, the business provides services on account: $1,900 to customer J. Anthony ; $4,600 to customer A. Martin; and $1,400 to customer S. Lee. Which journal entry is needed to record these transactions?
May 15 Accounts Receivable- J. Anthony 1900 Accounts Receivable- A. Martin 4600 Accounts Receivable- S. Lee 1400 Service Revenue 7900
Which of the following statements is true?
Notes receivable usually have longer collection terms than accounts receivable
Which of the following is true when the estimate of an asset's useful life is changed?
The asset's remaining depreciable book value will be spread over the asset's remaining life
Service Charge
This cash payment is the bank's fee for processing a company's transactions. Service charges can also include the cost of printed checks and other bank fees. A service charge is often referred to as a debit memorandum and9 represents a decrease in the bank account. This will show as "Less: Service charges" on the book side of the reconciliation because it represents a cash payment not yet subtracted from the company's cash balance.
Specialty Foods, Inc. maintains a separate accounts receivable account for each customer. Regarding this accounting treatment, which of the following statements is incorrect?
When a customer makes a payment on account, a debit is posted to the accounts receivable subsidiary account as well as to the accounts receivable control account
In a lock-box system __________
a bank employee empties the box daily and records the deposits into the company's bank account
How do you calculate gross profit?
net sales revenue- cost of goods sold= gross profit
Delivery expense is a(n)
operating expense
How do you calculate net income?
operating income- other expenses= net income (loss)
Which of the following steps must be completed before preparing the adjusted trial balance?
post journal entries to the accounts
Under the net method of handling credit and debit card payments, the ________
processing fee is debited to the Credit Card Expense account on or just after the date of sale
Encryption
rearranges messages by a special process.
Preferred stockholders ______
receive a dividend preference over common stockholders
The Sarbanes-Oxley Act
requires that an outside auditor must evaluate a public company's internal controls
Michelle Darby receives cash from customers. Her other assigned job is to post the collections to customer accounts receivable. Her company has weak
separation of duties
Which of the following is not part of the definition of internal control?
separation of duties
