ACCT 2101: Final Exam Practice Questions
What assets should be amortized using the straight-line method? a. Intangible assets with definite lives b. Intangible assets with indefinite lives c. Natural resources d. All of the above
a. Intangible assets with definite lives
What is the effect on the financial statements when a company fails to accrue salaries expense at year-end? a. Net income is overstates and liabilities are understated. b. Expenses are understated and stockholders' equity is understated c. Expenses and liabilities are both overstated d. Net income is overstated and liabilities are properly reported.
a. Net income is overstates and liabilities are understated.
A company just starting business made the following four inventory purchases in June: June 1 150 units $ 780 June 10 200 units $ 1,170 June 15 200 units $ 1,260 June 28 150 units $ 990 TOTAL $4,200 A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand Using the LIFO inventory method, the value of the ending inventory on June 30 is.. a. $1,365 b. $1,620 c. $2,580 d. $2,835
a. $1,365
Smith Corporation has provided the following information: Cash sales totaled $125,000 Credit sales totaled $279,000 Cash collections from customers for services yet to be provided totaled $38,000. An $11,000 gain from the sale of property and equipment occurred. Interest income totaled $7,700. How much were Smith's operating revenues? a. $404,000 b. $411,700 c. $442,000 d. $460,700
a. $404,000
The Falcon Hardware Store reports the following information in its financial statements for the three years ending in 2013: 2013 2012 2011 Credit sales, net 1,640,000 1,394,000 1,282,000 COGS 1,244,000 1,057,400 948,680 Accts Rec. 278,800 209,100 205,000 Allow. for Doubt Acct 33,400 28,000 23,000 Inventory (LIFO cost) 232,000 141,800 142,300 The inventory turnover ratio in 2013 is approximately: a. 6.66 b. 6.32 c. 9.18 d. 7.30 e. None of the above
a. 6.66
Cadet Company paid an account payable of $1,000. this transaction should be recorded on the payment date as follows: a. Accounts Payable 1,000 Cash 1,000 b. Cash 1,000 Accounts Payable 1,000 c. Notes Payable 1,000 Cash 1,000 d. Cash 1,000 Costs of Goods Sold 1,000
a. Accounts Payable 1,000 Cash 1,000
Which of the following journal entries is correct when no-par common stock is initially issued for cash? a. Cash .............................................. XX Common Stock ..................................XX b. Cash .............................................. XX Common Stock ..................................XX Additional paid-in capital .................XX c. Cash .............................................. XX Common Stock ..................................XX Retained Earning ...............................XX d. Cash .............................................. XX Common Stock ..................................XX Gain on sale of stock .........................XX
a. Cash .............................................. XX Common Stock ..................................XX
Which of the following has primary responsibility to develop Generally Accepted Accounting Principles? a. Financial Accounting Standards Board b. Company Executives c. Securities & Exchange Commission d. Public Company Accounting Oversight Board
a. Financial Accounting Standards Board
Sales discounts are accounted for: a. In separate contra-revenue account b. As an addition to the Cost of Goods Sold c. As a direct reduction to the Sales account d. As a selling expense
a. In separate contra-revenue account
Which of the following statements is true? a. One of the reasons that a company would issue convertible preferred stock is to avoid the use of bonds, which have fixed interest charges that must be paid regardless of the amount of net income. b. In case of bankruptcy, the maximum that a stockholder can lose is an amount equal to the current book value of his/her shares. c. Due to the limited liability of the owners of a corporation, corporations normally are not regulated as closely as other forms of business. d. Preferred stockholders generally have preference over common stockholders in the exercise of their voting rights.
a. One of the reasons that a company would issue convertible preferred stock is to avoid the use of bonds, which have fixed interest charges that must be paid regardless of the amount of net income.
Which of the following statements is correct? a. Revenues are reported on the income statement regardless of whether the customer has paid for the goods and services. b. Expenses are reported on the income statement during the period that they are paid for. c. Net income includes a deduction for dividend payments made to stockholders' d. Net income normally equals the net cash generated by operations
a. Revenues are reported on the income statement regardless of whether the customer has paid for the goods and services.
Which of the following is not considered to be recordable transaction? a. Signing a contract to have an outside cleaning service clean offices nightly b. Paying employees their wages c. Selling stock to investors d. Buying equipment and agreeing to pay a note payable and interest at the end of a year.
a. Signing a contract to have an outside cleaning service clean offices nightly
Which of the following is true about the Statement of Cash Flows? a. The statement reports details of the change in cash during the period. b. The statement details revenues earned and expenses incurred during the period. c. The statement reports the changes in assets and liabilities in terms of cash flows. d. The statement classifies cash flows into customer, operating, and financing activities.
a. The statement reports details of the change in cash during the period.
Which of the following correctly describes the following adjusting journal entry? DR Depreciation Expense CR Accumulated Depreciation a. Total assets decrease b. Liabilities will increase c. Stockholders' equity is not affected d. Net income increases.
a. Total assets decrease
Which of the following statements is true? a. Unfavorable financial leverage results when the cost of borrowed funds exceeds the additional revenue generated through the use of those funds. b. A bond will sell at a price higher than its face value if the market rate of interest is higher than the bond's states interest rate. c. A mortgage bond is a good example of a debenture bond. d. A bond is a registered bond when specific property has been pledged to ensure its payment and this property is registered with the bond trustee.
a. Unfavorable financial leverage results when the cost of borrowed funds exceeds the additional revenue generated through the use of those funds.
Newark Company has provided the following information Cash sales, $400,000 Credit sales, $1,350,000 Selling and administrative expenses, $330,000 Sales returns and allowances, $90,000 Gross profit, $1,360,000 Bad debt expense, $33,000 Credit card discounts, $40,000 Net income, $1,030,000 How much are Newark's net sales? a.$1,620,000 b. $1,660,000 c. $1,667,000 d. $1,750,000
b. $1,660,000 Note: this answer is based on recording credit card discounts as expenses as we did in the Class Exercise. The textbook shows an approach where credit card discounts are treated as contra-revenue accounts. Please use the approach we followed in class in answering questions on the Final Exam
Nikita Company has provided the following information: -number of issued shares, 900,000 -net income, $1,000,000 -number of authorized common shared, 1,000,000 -number of outstanding common shares, 800,000 -number of treasury shares, 100,000 Assuming there were no changes to issued, outstanding, or treasury shares during the year, what is Nikita's earnings per share? a. $1.43 b. $1.25 c. $1.11 d. $1.00 e. None of the above
b. $1.25
Company Z reported the following selected balance sheet accounts: Land $20,000 Cash 12,000 Inventory 8,000 Accts. Payable 7,000 Note Payable(due in 3 years) 10,000 Accrued Expense Payable 2,000 Common Stock 30,000 Retained Earnings 16,000 What is Company Z's working capital? a. $12,000 b. $11,000 c. $13,000 d. $16,000
b. $11,000
Discount Furniture purchases goods for resale. Information from their accounting records for the month of October is present below Purchases during the mont $154,000 Beginning inventory 116,500 Ending Inventory 61,000 What is the company's costs of goods sold for the month? a. $98,500 b. $209,500 c. $135,250 d. $154,000 e. None of the above
b. $209,500
On January 1, 2014, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid $1,000 for transportation and installation. The expected useful life of the machine is 6 years and the residual value is $5,000. how much is the annual depreciation expense assuming use of the straight-line depreciation method? a. $6,100 b. $6,000 c. $5,950 d. $5,750
b. $6,000
During 2014, Sigma Company earned service revenues amounting to $700,000, of which $630,000 was collected in cash; the balance will be collected in January 2015. Also in 2014 there were collections of cash prior to the delivery of goods/services totaling $10,000. What amount should the 2014 income statement report for service revenues? a. $630,000 b. $700,000 c. $70,000 d. $570,000
b. $700,000
A bond with the face value of $100,000 was issued for $93,500 on January 1, 2014. The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. Interest paid annually. How much interest will be paid on December 31, 2014? a. $10,000 b. $8,000 c. $7,480 d. $9,350
b. $8,000
A bond with a maturity value of $100,000 has stated interest rate of 8 percent. Interest is paid annually. The bond matured in 10 years. When the bond is issued, the market rate of interest is 10 percent. What amount of cash is received when the bond is issued? a. $100,000 b. $87,707 c. $49,157 d. $113,421
b. $87,707 Note: You should choose the answer that is closest to your computation using the Present Value tables
The Brick Corporation acquired 200 shares of its own $40 par value common stock, all of which had been previously issued at par. The corporation paid $8,800 ($44 per share) for these treasury shares. Three weeks later it reissued all 200 of these treasury shares at $42 per share. The entry to record the resistance of these shares, assuming no previous transactions in treasury stock, is: a. Cash 8,400 Paid-in Capital - Treasury Stock Transactions 400 Treasury Stock - Common 8,800 b. Cash 8,400 Retained Earnings 400 Treasury Stock - Common 8,800 c.Cash 8,800 Treasury Stock - Common 8,800 d. Cash 8,800 Treasury Stock - Common 8,400 Paid-in Capital - 400 Treasury Stock Transactions
b. Cash 8,400 Retained Earnings 400 Treasury Stock - Common 8,800
Companies accept credit card payment for all of the following reasons, except for: a. The company can avoid costs of providing credit directly to consumers. b. Collection on credit card sales allows money to be received sooner than cash sales. c. Losses from bad checks reduced d. Customer traffic is increased.
b. Collection on credit card sales allows money to be received sooner than cash sales.
Why are bank reconciliation needed? a. Bank reconciliations are specifically required by the SEC b. Companies' cash accounts may have items known only by the bank that are needed to adjust the cash account on the books to the correct balance. c.Banks wish to understand items on the customer's books that are not recorded in the bank statement. d. Bank reconciliations are useful for a company to determine its deposits in transit.
b. Companies' cash accounts may have items known only by the bank that are needed to adjust the cash account on the books to the correct balance.
Under what method(s) of depreciation is an asset's net book value the depreciable base (the amount to be depreciated)? a. Straight-line method b. Declining-balance method c. Units-of-production method d. All of the above
b. Declining-balance method
In a period of increasing inventory costs, if ending inventory has a positive balance, which cost flow method will result in the highest Net Income, all other things being equal? a. The choice of cost flow method would not affect Net Income b. FIFO c. LIFO d. Average Cost
b. FIFO
In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure? a. Average Cost Method b. LIFO method c. FIFO method d. Need more information to answer
b. LIFO method
The effect of writing off specific uncollectible account on components of the balance sheet and Income Statement would be: Total Assets-NetRealizedValueAcct Rec-Net Income a. No Effect; Decrease; No Effect b. No Effect; No Effect; No Effect c. Decrease; No Effect; No Effect d. No Effect; No Effect; Decrease
b. No Effect; No Effect; No Effect
Which of the following statements regarding the periodic and perpetual inventory systems is correct? a. Inventory is updated after each sale under the periodic method. b. Under the periodic method, the amount of inventory is not known until the end of the period when the inventory count is taken. c. Inventory on hand is determined by a physical count only under the perpetual method. d. The primary advantage of the periodic method is that it maintains detailed transaction-by-transaction records.
b. Under the periodic method, the amount of inventory is not known until the end of the period when the inventory count is taken.
All of the following are intangible assets except: a. patents b. natural gas c. goodwill d. trademarks
b. natural gas
On October 1, 2014, Allen Company signed a $100,000, six month, 6 percent note payable. The principal and interest will be paid on March 30, 2015. How much interest expense should be reported on the income statement for the year ended December 31, 2014? Please use a monthly computation of interest rather than daily. a. $6,000 b. $3,000 c. $1,500 d. None of the above
c. $1,500
On August 1, Red Company purchased computer equipment for $10,000 cash and also gave 100 shared of White common stock that Red Company $5,000 and on August 1 has fair value of $4,200. The installation costs for the computer equipment were $700 and shipping costs were $500. What amount should be the total amount debited to the computer equipment account? a. $14,200 b. $15,000 c. $15,400 d. $16,200
c. $15,400
A company just starting business made the following four inventory purchases in June: June 1 150 units $ 780 June 10 200 units $ 1,170 June 15 200 units $ 1,260 June 28 150 units $ 990 TOTAL $4,200 A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand Using the FIFO inventory method, the amount allocated to cost of goods sold for June is.... a. $1,620 b. $2,290 c. $2,580 d. $2,835
c. $2,580
Zenith Corporation summarized its inventory of remote controls (4 different models) in the table below. Unit Total Quantity Unit Total Replacement Replacement Cost Cost Cost Cost A 100 $40 $4,000 $35 $3,500 B 150 $50 $7,500 $52 $7,800 C 300 $60 $18,000 $62 $18,600 D 700 $15 $10,500 $12 $8,400 Total $40,000 $38,300 Using the lower cost or market rule applied on an item basis, Zenith's inventory of remote controls should be reported on its balance sheet at what amount? a. $40,000 b. $38,300 c. $37,400 d. $38,000 e. None of the above
c. $37,400
Warren Company plans to depreciate a new building using the double declining-balance depreciation method. The building cost $800,000. The estimated residual value of the building is $50,000 and it has an expected useful life of 25 years. Assuming the first year's depreciation expense was a full year and was recorded properly, what would be the amount of depreciation expense for the second year? a. $30,720 b. $32,000 c. $58,880 d. $64,000
c. $58,880
A company reported total stockholders' equity of $540,000 on its balance sheet dated December 31, 2014 during the year ended December 31, 2015, the company reported net income of $60,000, declared and paid in cash dividend of $18,000, declared and distributed a 10% stock dividend with a $15,000 total market value, sold treasury stock costing $12,000 for proceeds of $15,000, and issued additional common stock for $70,000. What is total stockholders' equity as of December 31, 2015? a. $640,000 b. $670,000 c. $667,000 d. $655,000
c. $667,000
Franklin Company reported cash collections on account of $895,000 and an increase in accounts receivable of $13,500 during the same period. Sales on account for the period were: a. $895,000 b. $13,500 c. $908,500 d. $881,500
c. $908,500
RKJ Company had provided the following: -100,000 shares of $5 par value common stock are authorized -70,000 shares were issued for $9 per share -65,000 shares are outstanding Which of the following statements is correct based only on the above facts? a. Common stock is reported at $630,000 on the balance sheet b. Additional-paid in capital is reported at $260,000 on the balance sheet c. Common stock is reported at $350,000 on the balance sheet d. Treasury stock is reported at $45,000 on the balance sheet
c. Common stock is reported at $350,000 on the balance sheet
Which of the costs below should be included as a cost of inventory for Airmotive Company? a. Costs of shipping goods to Airmotive's customers b. Sales commissions c. Freight charges to ship goods from vendors to Airmotive. d. Rent on company headquarters
c. Freight charges to ship goods from vendors to Airmotive.
A company is facing a class-action lawsuit in the upcoming year. It is possible, but not probable, that the company will have to pay a settlement of approximately $2,000,000. How would this fact be reported in the financial statements to be issued at the end of the current month? a. $2,000,000 in the Current Liability section b. $2,000,000 in the Long-Term Liability section c. In a descriptive narrative in the footnote section d. None because disclosure is not required
c. In a descriptive narrative in the footnote section
Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers? a. The cash account was credited for $47,000 b. Accounts payable was debited for $47,000 c. Supplies expense was increased by $47,000 d. Operating income was not changed by the payments to the suppliers.
c. Supplies expense was increased by $47,000
Which of the following is not an advantage of issuing bonds when compared to issuing additional shares of stock in order to obtain additional capital? a. Stockholders maintain proportionate ownership percentages b. Interest expense reduces taxable income c. Timing flexibility associated with the payment of interest d. All of the above are advantages associated with bonds.
c. Timing flexibility associated with the payment of interest
What is the primary purpose of the LIFO reserve? a. To set aside funds for the period when using LIFO results in net losses b. To insure that inventory is maintained at a constant level under the LIFO method. c. To compute the difference in costs of goods sold between using LIFO and FIFO. d. To compute the effect on selling and administrative expenses of difference between using LIFO and FIFO.
c. To compute the difference in costs of goods sold between using LIFO and FIFO.
Which of the following describes the primary objective of financial accounting? a. To provide useful financial information only to stockholders. b. To provide information about a business' future business strategies. c. To provide useful financial information about business to help external parties make informed decisions. d. To provide useful financial information about a business to help internal parties make informed decisions
c. To provide useful financial information about business to help external parties make informed decisions.
Which of the following describes the primary objective of the balance sheet? a. To measure the net income of a business to a particular point in time. b. To report the difference between cash inflows and cash outflows for the period c. To report the financial position of the reporting entity at a particular point in time d. To report the market value assets, liabilities, and stockholders' equity at a particular point in time.
c. To report the financial position of the reporting entity at a particular point in time
what is the most likely effect of increased effectiveness of collection methods on a company receivables turnover ratio? a. Turnover ratio will decrease b. Turnover ratio will stay the same c. Turnover ratio will increase
c. Turnover ratio will increase
Faircloth Industries, a retailer, conducted a count of their ending inventory finding the value was $956,000. when the amount was entered into the company's books, it was mistakenly input as $856,000. what is the impact of this error on the financial statements? Net Income Assets COGS Retained Earnings a. Overstate ; Overstate; Understate ; Understate b. Overstate ; Understate; Overstate ; Overstate c. Understate; Understate; Overstate; Understate d. Overstate; Overstate; Understate; Overstate
c. Understate; Understate; Overstate; Understate
Katie Company had 1,000,000 common shares authorized and has 40,000 shares of $2 par value common stock issued and outstanding prior to a 40% common stock dividend declaration and distribution. the market value of the Katie Co. stock on the declaration date was $10. Which of the following journal entries correctly accounts for the stock dividend declaration? a. Retained earnings .................... 160,000 Common Stock .................................... 32,000 Additional paid-in capital ..................128,000 b. Common Stock ........................... 32,000 Additional paid-in capital .........128,000 Retained earnings ............................ 160,000 c.Retained earnings .................... 32,000 Common Stock .................................... 32,000 d.Common Stock ......................... 32,000 Retained earnings ............................ 160,000
c.Retained earnings .................... 32,000 Common Stock .................................... 32,000
A company just starting business made the following four inventory purchases in June: June 1 150 units $ 780 June 10 200 units $ 1,170 June 15 200 units $ 1,260 June 28 150 units $ 990 TOTAL $4,200 A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand Using the average cost method, the amount allocates to the ending inventory on June 30 is.... a. $4,200 b. $2,700 c. $1,150 d. $1,500
d. $1,500
Rockfish, Ltd. had a Gross Profit Percentage of 35% for the year. If Sales Revenue was $8,642,000, Sales Discounts were $249,800, and Sales Returns and Allowances totaled $999,400, what was the Cost of Goods Sold for the year? a.$5,934,720 b.$5,100,020 c.$5,174,960 d. $4,805,320 e. None of the above
d. $4,805,320
Which of the following statements is correct? a. A 2-for-1 common stock split decreases both earnings per share and total stockholders' equity. b. A 10% common stock dividend decreases both earnings per share and total stockholders' equity c. a 2-for-1 common stock split increases both the number of common shares outstanding and total stockholders' equity. d. A 30% common stock dividend increases the number of common shares outstanding and does not affect total stockholders' equity.
d. A 30% common stock dividend increases the number of common shares outstanding and does not affect total stockholders' equity.
Which of the following correctly describes the recording of a divided declaration by a company's board of directors? a. A debit to retained earnings and a credit to cash b. A debit to additional paid-in capital and a credit to dividends payable c. A debit to cash and a credit to retained earnings d. A debit to retained earnings and a credit to dividends payable.
d. A debit to retained earnings and a credit to dividends payable.
Which of the following statements about treasury stock transactions is correct? a. The total number of shares issued increases when treasury stock is purchased. b. The total number of shares authorized changes when treasury stock is purchased. c. Gains and losses on treasury stock transactions are reported on the income statement. d. A stockholders' equity account is debited when treasury stock is purchased.
d. A stockholders' equity account is debited when treasury stock is purchased.
Which of the following is considered to be an expense on the income statement? a. Accounts payable b. Notes payable c. Wages payable d. Cost of Goods Sold
d. Cost of Goods Sold
The Umbrella Corporation estimated that $432,000 of accounts receivable are uncollectible. If the allowance for Doubtful Accounts has a $31,400 debit balance, the adjustment to record bad debts for the period requires a: a. Debit to Bad Debt Expense for $400,600 b. Credit to Allowance for Doubtful Accounts for $400,600 c.Debit to Allowance for Doubtful Accounts for $463,400 d. Debit to Bad Debt Expense for $463,400
d. Debit to Bad Debt Expense for $463,400
What would a relatively high Gross Profit on the classified Income Statement represent? a. Income from operations before taxes b. Ability of the company to produce goods at a premium cost c. Income from operations after taxes d. Either (a) efficiencies in the cost of producing goods or (b) ability of the company to charge a premium for goods
d. Either (a) efficiencies in the cost of producing goods or (b) ability of the company to charge a premium for goods
Mary, Inc., uses straight-line depreciation for all of tis depreciable assets. Mary sold a used piece of machinery on December 31, 2015, that it purchased on January 1, 2014, for $10,000.The asset has a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. If the sales price of the used machine was $7,500, the resulting gain or loss upon the sale was which of the following amounts? a. Loss of $500 b. Gain of $500 c. Loss of $1,500 d. Gain of $1,500 e. No gain or loss upon the sale
d. Gain of $1,500
Which of the following statements does not properly describe the current ratio? a. It measures the ability of a firm to pay its debts in the short-run. b. It is current assets divided by current liabilities. c. It is a measure of a firm's short-run liquidity. d. It measures a firm's ability to pay its long-term debts as they mature.
d. It measures a firm's ability to pay its long-term debts as they mature.
Which of the following statements does not properly describe the accrual basis of accounting? a. Expenses are recognized when incurred regardless of the timing of cash flows. b. Revenues are recognized when earned regardless of the timing of cash flows. c. Generally accepted accounting principles require use of the accrual basis. d. It should not be used when providing financial statements to external decision makers.
d. It should not be used when providing financial statements to external decision makers.
A company wishes to report the highest earnings possible for financial reporting purposed. Therefore, when calculating depreciation, a. It will follow MACRS depreciation tables prescribed by the IRS b. It will select the shortest lives possible for its assets c. It will select the lowest residual values for its assets d. Its will estimate higher residual values for its assets
d. Its will estimate higher residual values for its assets
What is the effect on the financial statements when a company fails to adjust the prepaid insurance account at year-end for insurance coverage which has expired? a. Net income is overstated and stockholders' equity is understated. b. Expenses are understated and stockholders' equity is understated. c. Expenses are understated and net income is understated. d. Net income is overstated and assets are overstated.
d. Net income is overstated and assets are overstated.
When recording depreciation, which of the following statements is true? a. Total assets increase and stockholders' equity increases b. Total assets decrease and total liabilities increase c. Total assets decrease and stockholders' equity increases. d. None of the above are true.
d. None of the above are true.
On October 1, 2014, Adams Company paid $4,800 for a two-year insurance policy with the insurance coverage beginning on that date. As of December 31, 2014, which of the following account balances are correct after adjusting entries have been made? a. Prepaid insurance $4,800, and Insurance expense $0. b. Prepaid insurance $0, and Insurance expense $4,800. c.Prepaid insurance $2,400, and Insurance expense $2,400. d. Prepaid insurance $4,200, and Insurance expense $600.
d. Prepaid insurance $4,200, and Insurance expense $600.
Lena Company has provided the following data (ignore income taxes): 2014 revenues were $99,000 2014 expenses were $47,800 Dividends declared and paid during 2014 totaled $9500 Total assets at December 31, 2014 were $177,000 Total liabilities at December 31, 2014 were $89,000 Common stock at December 31, 2014 was $28,000 Which of the following is not correct? a. 2014 net income was $51,200 b. Total stockholders' equity at December 31, 2014 was $88,000 c. Total liabilities and stockholders' equity at December 31, 2014 was $177,000 d. Retained earnings on December 2014 were $41,700
d. Retained earnings on December 2014 were $41,700
A company purchased treasury stock for $19,000. The treasury stock was initially issued for $12,000 and had a $5,000 par value. Which of the following statements correctly describes the effects of the treasury stock purchase? a. Net income increases by $7,000 b. Net income decreases by $7,000 c. Stockholders' equity increases by $12,000 d. Stockholders' equity decreases by $19,000
d. Stockholders' equity decreases by $19,000
Eagle Consulting had a balance of $720,500 in its cash account on December 31, according to its accounting records. After receiving the bank statement at the end of December, the following information was available to perform the bank reconciliation: Interest paid by bank $4,242 Outstanding Checks 2,510 Deposits in transit 4,050 NSF Checks from various customers 8,600 Error, check recorded on books for 10,245 $55,680 that was actually for the amount of $65,925 Bank service charges 1,560 Based on this information, what is the correct cash balance per books on December 31? a.$729,080 b.$726,367 c.$724,824 d.$704,337 e. None of the above
d.$704,337
Sadler Corporation purchased equipment to be used in manufacturing. The purchase was made at the beginning of 2013 by paying cash of $140,000. the equipment has no (zero) estimated residual value and an expected useful life of 10 years. Sadler uses the straight-line method for depreciation. the journal entry necessary to record depreciation expense for 2013 is: a. Depreciation Expense ......... $14,000 Equipment .....................................$14,000 b. Equipment ............................ $14,000 Accumulated Dep. ..........................$14,000 c.Accumulated Dep. ................ $14,000 Depreciation Expense ................... $14,000 d.Depreciation Expense ......... $14,000 Accumulated Dep. ..........................$14,000
d.Depreciation Expense ......... $14,000 Accumulated Dep. ..........................$14,000
Financial information for the Eastern Bakery appears below 2011 2010 2009 Net Sales $2,640,000 $3,546,000 $3,191,400 Allow.for 81,200 65,800 59,220 Doubtful Acct Acct Rec. 405,000 322,600 290,300 The average collection period for the company in 2011 is approximately: a. 40.2 days b. 60.4 days c. 35.5 days d. 44.8 days e. None of the above
e. None of the above This answer is "none of the above." There will not be any "none of the above" answers on the Final Exam. The correct answer is 50.3 days (rounded)
