COBA CORE ACCT 2050 & 2060 - FALL 21

Maxwell Tax Planning Service bought communications equipment for $10,200 on January 1, 2019. The equipment has an estimated useful life of five years and zero residual value. Maxwell uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of each month. As of June 30, 2019, the balance in the Accumulated Depreciation account for this equipment is ________ A) $170 B) $2,040 C) $850 D) $1,020

$1,020

uring the accounting period, office supplies were purchased on account for $3,200. A physical count, on the last day of the accounting period, shows $1,100 of office supplies on hand. Supplies Expense for the accounting period is $3,300. What was the beginning balance of Office Supplies? A) $4,400 B) $2,100 C) $1,200 D) There is not enough information to answer this question.

$1,200

Fleetwood, Inc. signed a three-year note payable for $59,000 at 7% annual interest. What is the interest expense for 2019 if the note was signed on August 1, 2019? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) A) $2,065 B) $1,721 C) $12,390 D) $4,130

$1,721

Singh Enterprises manufactures picture frames. Its production operations are divided into two departments — Assembly and Finishing. The company uses a process costing system. Singh incurred the following costs during the year to produce 6000 picture frames: Assembly $9700 Finishing $2250 If Singh can only sell 5100 picture frames during the year, what will be the cost per unit of the picture frames produced? (Round your answer to the nearest cent.) A) $2.34 B) $1.99 C) $1.62 D) $1.90

$1,99

nderson Corporation has purchased a group of assets for $20,300. The assets and their relative market values are listed below. Land $6800 Equipment 2300 Building 3600 Which of the following amounts would be debited to the Land account? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) A) $4233 B) $10,962 C) $3654 D) $5684

$10,962

Lakeshore Manufacturing provided the following information for the month ended March 31: Sales Revenue $30,000 Beginning Finished Goods Inventory 17,000 Ending Finished Goods Inventory 11,500 Cost of Goods Manufactured 12,600 Compute gross profit. A) $11,900 B) $17,400 C) $22,900 D) $5900

$11,900

An asset was purchased for $37,000 on January 1, 2019. The asset's estimated useful life was five years, and its residual value was $9000. The straight-line method of depreciation was used. Calculate the gain or loss if the asset is sold for $19,000 on December 31, 2019, the last day of the accounting period. A) $6200 gain B) $12,400 loss C) $12,400 gain D) no gain or no loss

$12,400 loss

merchandiser uses a perpetual inventory system. The beginning Retained Earnings balance of the merchandiser was $110,000. During the year, Sales Revenue amounted to $90,000, Cost of Goods Sold was $40,000, and all other expenses totaled $12,000. The company declared and paid $27,000 as dividends. The ending balance of Retained Earnings would be ________ A) $148,000 B) $121,000 C) $175,000 D) $110,000

$121,000

A company purchased 500 units for $30 each on January 31. It purchased 550 units for $33 each on February 28. It sold a total of 650 units for $45 each from March 1 through December 31. What is the cost of ending inventory on December 31 if the company uses the first-in, first-out (FIFO) inventory costing method? (Assume that the company uses a perpetual inventory system.) A) $13,200 B) $10,200 C) $12,000 D) $1,8000

$13,200

On January 1, 2018, Benbrook Company purchased equipment and signed a six-year mortgage note for $160,000 at 15%. The note will be paid in equal annual installments of $42,278, beginning January 1, 2019. Calculate the balance of Mortgage Payable after the payment of the first installment. (Round your answer to the nearest whole number.) A) $24,000 B) $117,722 C) $141,722 D) $120,702

$141,722

Fire Cat, Inc. selected cost data for the year are shown below: Cost of Goods Manufactured $145,500 Work-in-Process Inventory, Jan. 1 19,500 Work-in-Process Inventory, Dec. 31 22,000 Direct Materials Used 18,600 What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year? A) $148,000 B) $143,000 C) $22,900 D) $38,100

$148,000

Precision Camera Services started the year with total assets of $90,000 and total liabilities of $65,000. The revenues and the expenses for the year amounted to $100,000 and $70,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $40,000. What is the amount of stockholders' equity at the end of the year? A) $70,000 B) $100,000 C) $15,000 D) $40,000

$15,000

The balances of select accounts of Donovan, Inc. as of December 31, 2018 are given below. Debit Credit Building $120,000 Cash 9,000 Office Supplies 1,000 Furniture 4,000 Prepaid Insurance 600 Accumulated Depreciation—Furniture $2,000 Land 33,000 Accumulated Depreciation—Building 4,000 Accounts Receivable 2,000 What amount of total long-term assets would be shown on the balance sheet at December 31, 2018? A) $120,000 B) $151,000 C) $153,000 D) $157,000

$151,000

After the December 31, 2019 adjusting journal entries have been posted, Sinclair Enterprises has the following account balances (all accounts have normal balances) are: Account Title Account Balance Accounts Receivable $159,000 Allowance for Bad Debts $4,600 Bad Debts Expense $8,200 What is the net realizable value as of December 21, 2019? A) $163,600 B) $150,800 C) $146,200 D) $154,400

$154,400

Venus Corp. sold goods, with a selling price of $17,221, for cash. The state sales tax rate is 8%. What amount is credited to the Sales Revenue account? (Round calculations to the nearest dollar.) A) $17,221 B) $18,599 C) $1378 D) $15,843

$17,221

A company reports net accounts receivable of $152,000 on its December 31, 2019 balance sheet. The Allowance for Bad Debts has a credit balance of $19,000. What is the balance of Accounts Receivable? A) $157,000 B) $152,000 C) $171,000 D) $133,000

$171,000

Baldwin, Inc. had the following balances and transactions during 2019: Beginning Merchandise Inventory as of January 1, 2019 125 units at $81 March 10 Sold 50 units June 10 Purchased 225 units at $86 October 30 Sold 175 units What would be reported as Cost of Goods Sold on the income statement for the year ending December 31, 2019 if the perpetual inventory system and the first-in, first-out inventory costing method are used? A) $10,125 B) $14,675 C) $29,475 D) $18,725

$18,725

f bonds with a face value of $209,000 are issued at 93, the amount of cash proceeds is ________. A) $208,907 B) $209,000 C) $194,370 D) $179,740

$194,370

Dynamic Production Services started the year with total assets of $120,000 and total liabilities of $55,000. The revenues and the expenses for the year amounted to $100,000 and $80,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $50,000. Calculate Dynamic's net income for the year. A) $20,000 B) $100,000 C) $80,000 D) $120,000

$20,000

Artisan Inspiration, Inc. is a merchandiser of stone ornaments. The company sold 8000 units during the year. The company has provided the following information: Sales Revenue $593,000 Purchases (excluding Freight In) 304,000 Selling and Administrative Expenses 68,000 Freight In 14,000 Beginning Merchandise Inventory 46,000 Ending Merchandise Inventory 42,000 What is the operating income for the year? (Round your answer to the nearest whole dollar.) A) $203,000 B) $322,000 C) $271,000 D) $525,000

$203,000

On January 1, 2018, Jordan, Inc. acquired a machine for $1,100,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $61,000. Calculate the depreciation expense per year using the straight-line method. A) $220,000 B) $207,800 C) $268,800 D) $275,000

$207,800

Wellness, a healthy living magazine, collected $504,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the balance in the Unearned Revenue account as of December 31? A) $210,000 B) $294,000 C) $504,000 D) $378,000

$210,000

A corporation used $34,000 of direct materials. It incurred $74,000 in direct labor costs and $112,500 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $27,500 and $20,500, respectively? A) $248,000 B) $227,500 C) $213,500 D) $220,500

$227,500

Bachman, Inc. plans to develop a shopping center. In the first quarter, the following amounts were spent: Acquisition of land $23,000 Surveys and legal fees 1500 Land clearing 400 Fencing 7000 Install lighting and signage 1860 What amount should be recorded as the cost of the land in the corporation's books? A) $31,900 B) $24,900 C) $26,760 D) $30,400

$24,900

Refer to the following adjusted trial balance after the first year of operations. Accounts Debit Credit Cash $1,900 Accounts Receivable 8,900 Office Supplies 200 Equipment 22,300 Accumulated Depreciation— Equipment $2,000 Accounts Payable 1,000 Salaries Payable 850 Unearned Revenue 400 Common Stock 3,600 Dividends 3,000 Service Revenue 55,150 Salaries Expense 23,000 Supplies Expense 2,000 Depreciation Expense— Equipment 1,700 Total $63,000 $63,000 What will the balance of the Retained Earnings account be after the closing entries are posted? A) $25,450 B) $28,450 C) $32,050 D) $31,450

$25,450

An adjusted trial balance is given below. Debit Credit Cash $13,000 Accounts Receivable 2,000 Prepaid Rent 700 Merchandise Inventory 25,000 Accounts Payable $4,100 Salaries Payable 2,000 Notes Payable 800 Common Stock 8,000 Retained Earnings 3,800 Dividends 1,000 Sales Revenue 86,900 Cost of Goods Sold 23,000 Salaries Expense 18,000 Rent Expense 12,000 Selling Expense 8,500 Delivery Expense 1,800 Supplies Expense 600 Total $105,600 $105,600 What will be the final balance in the corporation's Retained Earnings account after recording the closing entries? A) $25,800 B) $26,800 C) $14,000 D) $2,8000

$25,800

Accounts Receivable has a balance of $32,000, and the Allowance for Bad Debts has a credit balance of $3,000. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a $2,100 account receivable is written off? A) $29,000; $29,000 B) $26,900; $26,900 C) $29,000; $26,900 D) $26,900; $31,100

$29,000; $29,000

Zander Company has fixed costs of $14,000. The company's contribution margin ratio is 46%. What is the breakeven point in sales dollars? (Round your answer to the nearest dollar.) A) $70,000 B) $30,435 C) $6440 D) $2800

$30,435

A company purchased 90 units for $20 each on January 31. It purchased 180 units for $25 each on February 28. It sold 180 units for $60 each from March 1 through December 31. If the company uses the first- in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.) A) $1,800 B) $4,500 C) $4,050 D) $6,300

$4,050

A company purchased 130 units for $20 each on January 31. It purchased 190 units for $25 each on February 28. It sold 190 units for $60 each from March 1 through December 31. If the company uses the weighted-average inventory costing method, calculate the amount of Cost of Goods Sold on the income statement for the year ending December 31. (Assume the company uses the perpetual inventory system. Round any intermediate calculations two decimal places, and your final answer to the nearest dollar.) A) $7,350 B) $4,364 C) $2,600 D) $4,750

$4,364

Venus Manufacturing uses a predetermined overhead allocation rate based on direct labor cost. At the beginning of the year, it estimated the manufacturing overhead rate to be 30% of the direct labor cost. In the month of June, Venus completed Job 13C and its details are as follows: Direct materials cost $6820 Direct labor cost $26,000 Direct labor hours 31 hours Units of product produced 200 What is the total cost incurred for Job 13C? A) $34,866 B) $33,800 C) $14,620 D) $40,620

$40,620

Milton, Inc. had the following transactions in 2019, its first year of operations: • Issued 8000 shares of common stock. Stock has par value of $0.01 per share and was issued at $40.00 per share. • Earned net income of $200,000. • Paid dividends of $8.00 per share. At the end of 2019, what is total stockholders' equity? A) $320,000 B) $456,000 C) $136,000 D) $584,000

$456,000

The net income of Hollywood Talent Services is $26,000. The beginning and ending stockholders' equity balances were $35,000 and $56,000, respectively. The company issued no common stock. Calculate the amount of dividends. A) $15,000 B) $5,000 C) $9,000 D) $8,000

$5,000

Given the following information, determine the cost of goods manufactured. Direct Labor Incurred $62,000 Manufacturing Overhead Incurred 177,000 Direct Materials Used 151,000 Finished Goods Inventory, Jan. 1 197,000 Finished Goods Inventory, Dec. 31 99,000 Work-in-Process Inventory, Jan. 1 221,000 Work-in-Process Inventory, Dec. 31 108,000 A) $390,000 B) $503,000 C) $282,000 D) $188,000

$503,000

The following information was obtained from Durand, Inc.: Advertising Costs $11,600 Indirect Labor 8000 CEO's Salary 470,000 Direct Labor 53,000 Indirect Materials Used 8000 Direct Materials Used 390,000 Factory Utilities 840 Factory Janitorial Costs 1000 Manufacturing Equipment Depreciation 1700 Delivery Vehicle Depreciation 2110 Administrative Wages and Salaries 22,300 How much were Durand's period costs? A) $462,540 B) $506,010 C) $13,710 D) $503,900

$506,010

On March 1, 2018, Mandy Services issued a 3% long-term notes payable for $15,000. It is payable over a 3-year term in $5000 principal installments on March 1 of each year, beginning March 1, 2019. Each yearly installment will include both principal repayment of $5000 and interest payment for the preceding one-year period. What is the amount of total cash payment that Mandy will make on March 1, 2019? A) $5000 B) $5450 C) $15,000 D) $5225

$5450

An invoice of $600 for merchandise purchased is showing 2/15, n/30 as terms of credit. If the invoice is paid on or before the fifteenth day after the invoice date, the amount to be paid is ________. A) $588 B) $600 C) $612 D) $615

$588

The following are the current month's balances for selected accounts of Sandlin Marketing Company. Accounts Payable $9,000 Revenue 8,000 Cash 7,650 Expenses 1,100 Furniture 11,000 Accounts Receivable 12,000 Common Stock 10,250 Notes Payable 4,500 What is the net income for Sandlin Marketing for the current month? A) $8,000 B) $6,900 C) $9,100 D) $15,650

$6,900

The financial statements of Carrier Office Furniture Company include the following items: 2019 2018 Cash $42,500 $42,000 Short-term Investments 28,000 19,000 Net Accounts Receivable 102,000 98,000 Merchandise Inventory 166,000 148,000 Total Assets 527,000 547,000 Total Current Liabilities 273,000 285,000 Long-term Note Payable 64,000 60,000 What is working capital for 2019? A) $190,000 B) $65,500 C) $37,500 D) $100,500

$65,500

Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $760,000 and $520,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 8000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.) A) $95.00 per machine hour B) $32.50 per labor hour C) $1.46 per labor hour D) $65.00 per machine hour

$65.00 per machine hour

Accounts Receivable has a balance of $8,000, and the Allowance for Bad Debts has a credit balance of $450. The allowance method is used. What is the net realizable value of Accounts Receivable after a $160 account receivable is written off? A) $7,390 B) $7,710 C) $7,550 D) $8,000

$7,550

The following Office Supplies account information is available for Nabors, Inc. Beginning balance $1,100 Office Supplies expensed 7,000 Ending balance 2,000 From the above information, calculate the amount of office supplies purchased. A) $7,900 B) $7,000 C) $1,100 D) $2,000

$7,900

Hudson Landscaping Service bought equipment for $9,600 on January 1, 2019. It has an estimated useful life of five years and zero residual value. Hudson uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2019, the book value of this equipment shown on its balance sheet will be ________. A) $8,640 B) $9,600 C) $10,560 D) $9,760

$8,640

Avia Company sells a product for $150 per unit. Variable costs are $70 per unit, and fixed costs are $1200 per month. The company expects to sell 640 units in September. The unit contribution margin is ________. A) $80 per unit B) $70 per unit C) $220 per unit D) $150 per unit

$80 per unit

Clay Earth Company sells ceramic pottery at a wholesale price of $5 per unit. The variable cost of manufacture is $2.50 per unit. The fixed costs are $6200 per month. It sold 5700 units during this month. Calculate Clay Earth's operating income (loss) for this month. A) $22,300 B) $8050 C) ($8050) D) ($6200)

$8050

The Assembly Department of Interface, Inc., manufacturer of computers, had 4500 units of beginning inventory in September, and 8000 units were transferred to it from the Production Department. The Assembly Department completed 4000 units during the month and transferred them to the Packaging Department. The weighted-average method is used. Calculate the total number of units to account for by the Assembly Department. A) 3500 units B) 8000 units C) 4500 units D) 12,500 units

12,500 units

Elephant, Inc.'s cost of goods sold for the year is $2,000,000, and the average merchandise inventory for the year is $129,000. Calculate the inventory turnover ratio of the company. (Round your answer to two decimal places.) A) 6.45 times B) 15.50 times C) 7.75 times D) 9.36 times

15.50 times

National, Inc. provides the following data: 2019 2018 Cash $45,000 $25,000 Accounts Receivable, Net 138,000 62,000 Merchandise Inventory 70,000 50,000 Property, Plant, and Equipment, Net 200,000 120,000 Total Assets $453,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $250,000 Cost of Goods Sold (110,000) Gross Profit $140,000 Calculate the accounts receivable turnover ratio for 2019. (Round your answer to two decimal places.) A) 5.00 times B) 3.28 times C) 2.50 times D) 1.81 times

2.50 times

Allstate Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: 2019 2018 Cash and Receivables $75,000 $145,000 Merchandise Inventory 175,000 250,000 Property, Plant and Equipment, net 820,000 710,000 Total Assets $1,070,000 $1,105,000 Total Liabilities $455,000 $405,000 For the vertical analysis, what is the percentage of current assets as of December 31, 2019? (Round your answer to two decimal places.) A) 23.36% B) 35.75% C) 55.63% D) 30.49%

23.36%

If 34,000 units are 80% complete with respect to direct materials, then the equivalent units of production for direct materials are ________. The weighted-average method is used. A) 34,000 units B) 27,200 units C) 6800 units D) 40,800 units

27,200

A company reports total assets of $910,000 and stockholders' equity of $530,000. Calculate the debt ratio. (Round your answer to two decimal places.) A) 36.81% B) 41.76% C) 58.24% D) 71.7%

41.76%

A furniture corporation manufactures two models of furniture—Standard and Deluxe. The total estimated manufacturing overhead costs are $64,200. The following estimates are available: Standard Deluxe Direct materials cost per unit $250 $290 Direct labor cost per unit $125 $140 Number of units 240 600 The company uses direct labor costs as the base to allocate manufacturing overhead. Calculate the predetermined overhead rate. (Round your answer to two decimal places.) A) 27.44% B) 29.23% C) 191.07% D) 56.32%

56.32%

Pizza, Inc. provides the following data: 2019 2018 Assets Current Assets: Cash and Cash Equivalents $30,000 $25,000 Accounts Receivable, Net 37,000 62,000 Merchandise Inventory 59,000 50,000 Total Current Assets $126,000 137,000 Property, Plant, and Equipment, Net $124,000 120,000 Total Assets $250,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $510,000 Cost of Goods Sold (160,000) Gross Profit $350,000 Calculate the asset turnover ratio for 2019. There are no cash sales. (Round your answer to two decimal places.) A) 4.05 times B) 1.01 times C) 0.64 times *D) 2.01 times 46. Walton, Inc. provides the following data: 2019 2018 Cash $44,000 $25,000 Accounts Receivable, Net 101,000 62,000 Merchandise Inventory 78,000 50,000 Property, Plant, and Equipment, Net 182,000 120,000 Total Assets $405,000 $257,000 Additional information for the year ending December 31, 2019: Net Credit Sales $550,000 Cost of Goods Sold 150,000 Interest Expense 24,000 Net Income 184,000 Calculate the rate of return on total assets for 2019. (Round your answer to two decimal places.) A) 45.43% B) 62.84% C) 71.60% D) 51.36%

62.84%

Hughes Company manufactures harmonicas which it sells for $31 each. Variable costs for each unit are $18 and total fixed costs are $3925. How many units must be sold to earn income of $5500? A) 725 B) 423 C) 304 D) 524

725

What does "2/10" mean, with respect to "credit terms of 2/10, n/30"? A) A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date. B) Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice. C) A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date. D) Interest of 10 percent will be charged if invoice is paid after two days.

A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date.

A business makes a cash payment of $12,000 to a supplier for supplies purchased two weeks earlier. Which of the following accounts is debited? A) Cash B) Accounts Payable C) Supplies D) Accounts Receivable

Accounts Payable

Which of the following is a current asset that is expected to be converted to cash, sold, or consumed during the next year (or the normal operating cycle, if longer)? A) Land B) Equipment C) Building D) Accounts Receivable

Accounts Receivable

Amounts owed for products or services purchased on account are called ________. A) accounts payable B) unearned revenue C) accrued expense D) warranty payable

Accounts payable

Which of the following accounts will have an ending balance after the closing process is completed? A) Dividends B) Rent Expense C) Accumulated Depreciation D) Service Revenue

Accumulated Depreciation

he entry to record depreciation includes a credit to the ________ account. A) Depreciation Payable B) Cash C) Accumulated Depreciation D) Depreciation Expense

Accumulated Depreciation

Which of the following accounts will be included in a post-closing trial balance? A) Accumulated Depreciation—Building B) Rent Expense C) Interest Expense D) Service Revenue

Accumulated Depreciation-Building

Which of the following correctly describes the accounting for advertising costs? A) Advertising costs are product costs and are expensed as incurred. B) Advertising costs are period costs and are expensed as incurred. C) Advertising costs are product costs and are expensed when the manufactured product is sold. D) Advertising costs are period costs and are expensed when the manufactured product is sold.

Advertising costs are period costs and are expensed as incurred

Which of the following sequences states the order in which accounts are listed on a trial balance? A) Equity → Assets → Liabilities B) Liabilities → Assets → Equity C) Assets → Equity → Liabilities D) Assets → Liabilities → Equity

Assets --> Liabilities --> Equity

Rosewood Corporation purchased land for $100,000 by making a cash payment of $38,000 and promising to pay the remaining amount in a later accounting period. What is the net effect of this transaction on Rosewood's accounting equation? A) Assets increase by $100,000 and liabilities decrease by $38,000. B) Assets increase by $100,000 and liabilities decrease by $62,000. C) Assets and equity increase by $62,000. D) Assets and liabilities increase by $62,000.

Assets and liabilities increase by $62,000

Mulberry Corporation collected $16,000 from one of its customers, the amount owed from the previous month. How does this affect the accounting equation for Mulberry? A) Assets increase by $16,000; liabilities decrease by $16,000. B) Assets increase by $16,000; assets decrease by $16,000. C) Assets increase by $16,000; liabilities increase by $16,000. D) Assets increase by $16,000; equity increases by $16,000.

Assets increase by $16,000; assets decrease by $16,000

Which of the following statements regarding the allowance method of accounting for uncollectible receivables is incorrect ? A) Bad debt expense is not estimated. B) The Allowance for Bad Debts is used to hold the pool of "unknown" uncollectible accounts. C) The business does not wait to see which customers will not pay when estimating the allowance for bad debts. D) The allowance method is based on the matching principle.

Bad debt expense is not estimated

Regarding the double-entry system, which of the following statements is incorrect? A) A transaction would be incomplete if only one side were recorded. B) Because of technology, the use of the double-entry system of accounting is optional. C) The double-entry system is a system of accounting in which every transaction affects at least two accounts. D) If office supplies are purchased on account, the account Office Supplies increases and the account Accounts Payable increases.

Because of technology, the use of the double-entry system of accounting is optional.

Which of the following formulas represent cost of goods sold for a merchandising business? A) Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold B) Purchases and Freight In + Ending Merchandise Inventory = Cost of Goods Sold C) Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

A business collects cash from a customer for services that were performed one month earlier. Which of the following accounts is debited? A) Cash B) Accounts Receivable C) Service Revenue D) Accounts Payable

Cash

A business makes a cash payment to a supplier on account for office supplies that were purchased earlier. Which of the following accounts is credited? A) Cash B) Accounts Payable C) Office Supplies D) Office Supplies Expense

Cash

Which of the following is the most liquid asset? A) Building B) Prepaid Expenses C) Accounts Receivable D) Cash

Cash

Which of the following accounts will be included in a post-closing trial balance? A) Dividends B) Salaries Expense C) Common Stock D) Supplies Expense

Common Stock

In a job order costing system, a credit to Finished Goods Inventory will be accompanied by a debit to ________. A) Cost of Goods Sold B) Work-in-Process Inventory C) Sales Revenue D) Accounts Receivable

Cost of Goods Sold

Regarding the Cost of Goods Sold account, which of the following statements is incorrect? A) In a perpetual inventory system, the Cost of Goods Sold account keeps a current balance throughout the period. B) Cost of Goods sold is a contra revenue account. C) Cost of Goods Sold is based on the company's cost, not the retail price. D) Cost of Goods Sold represents the cost of inventory that has been sold to customers.

Cost of Goods sold is a contra revenue account.

The entry to record depreciation includes a debit to the ________ account. A) Equipment B) Cash C) Accumulated Depreciation D) Depreciation Expense

Depreciation Expense

Which of the following is true of dividends? A) Dividends are a distribution of cash, stock, or other property to stockholders. B) Dividends increase assets and decrease total stockholders' equity of a corporation. C) Dividend payments decrease paid-in capital. D) Dividend payments increase stockholders' equity.

Dividends are a distribution of cash, stock, or other property to stockholders.

On March 1, 2018, Everson Services issued a 4% long-term notes payable for $16,000. It is payable over a 4-year term in $4000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2019. Each yearly installment will include both principal repayment of $4000 and interest payment for the preceding one-year period. On March 1, 2019, ________. The accounting period ends on December 31. A) Everson must accrue $4000 of Interest Expense B) Everson must accrue the next note payment of $4000 as the current portion of principal payment C) Everson must pay $640 of interest to the note holder D) Everson will receive $4000 as an installment payment

Everson must pay $640 of interest to the note holder

It is mandatory for both the employer and employee to pay ________. A) FICA B) SUTA C) employee income tax D) federal unemployment tax

FICA

Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account. A) Raw Materials Inventory B) Work-in-Process Inventory C) Manufacturing Overhead D) Finished Goods Inventory

Finished Goods Inventory

Revenues and expenses may be transferred to the ________ account before their final transfer into the Retained Earnings account. A) Net Income B) Income Summary C) Dividends D) Assets

Income summary

Which of the following describes the financing activities section of the statement of cash flows? A) It includes increases and decreases in long-term assets. B) It includes cash inflows and outflows related to long-term liabilities and equity. C) It includes interest and dividend income and cash payments for interest expense. D) It reports on activities that create revenue or expenses for the entity's business.

It includes cash inflows and outflows related to long-term liabilities and equity.

Which of the following describes the operating activities section of the statement of cash flows? A) It reports cash receipts and cash payments that increase or decrease long-term assets. B) It includes cash inflows and outflows related to long-term liabilities and equity. C) It reports on activities that create revenue or expenses for the entity's business. D) It reports on how cash flows affect the total assets and total liabilities.

It reports on activities that create revenue or expenses for the entity's business.

Which of the following is a measure of how quickly an item can be converted to cash? A) Debt ratio B) Return on assets ratio C) Liquidity D) Accounting cycle

Liquidity

Which of the following should be classified as a long-term asset? A) Interest Receivable B) Accounts Receivable C) Notes Receivable, due in 5 years D) Cash Equivalents

Notes Receivable, due in 5 years

When using the allowance method, the write-off of a receivable ________ A) involves a contra-revenue account B) reduces the amount of the Allowance for Bad Debts account C) decreases net income D) affects the net realizable value of accounts receivable

Reduces the amount of the Allowance for Bad Debts account

The Income Summary account has a credit balance of $27,000 after the revenue and expense accounts have been closed. Which of the following is credited to close the Income Summary account? A) Dividends B) Sales Revenue C) Cost of Goods Sold D) Retained Earnings

Retained Earnings

Which of the following statements is true of revenues? A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. B) Revenues decrease equity, so a revenue account's normal balance is a debit balance. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. D) Revenues increase equity, so a revenue account's normal balance is a credit balance.

Revenues increase equity, so a revenue account's normal balance is a credit balance.

Lamar Corporation originally purchased land for $20,000. It later sold the land for $20,000 in cash. Which of the following is true of the effect of the sale of land on the accounting equation? A) Assets increase and liabilities decrease by $20,000. B) Assets and equity increase by $40,000. C) Assets increase by $20,000; equity increases by $20,000. D) The amount of total assets remains the same.

The amount of total assets remains the same

Which of the following is true when the estimate of an asset's useful life is changed? A) The new estimate is ignored until the last year of the asset's life. B) The depreciation expense in the prior years are restated. C) Prior years' financial statements must be restated. D) The asset's remaining depreciable book value will be spread over the asset's remaining life.

The asset's remaining depreciable book value will be spread over the asset's remaining life.

Which of the following statements is true if a bond's stated interest rate is the same as the market rate? A) The bond will be issued at a premium. B) The bond will be issued at par. C) The bond will be issued at a discount. D) The bond will be issued for an amount lower than the maturity value.

The bond will be issued at par

Which of the following is a reason why a job order costing system is appropriate for a custom furniture manufacturer? A) The cost incurred for each job will differ as per the order specifications. B) The direct costs incurred for each job are the same, only indirect costs vary. C) The raw materials used have already been accounted for using process costing. D) Custom furniture manufacturers produce large quantities of similar products.

The cost incurred for each job will differ as per the order specifications.

Which of the following is true of a corporation? A) A corporation cannot be privately held. B) The earnings of a corporation may be subject to double taxation. C) A corporation has a limited life. D) The stockholders of a corporation have unlimited liability for the corporation's debt.

The earnings of a corporation may be subject to double taxation.

The accountant for Barnes Auto Repair, Inc. failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is an effect of this omission? A) The net income will be overstated. B) The total assets will be understated. C) The net income will be understated. D) The total assets will be overstated.

The net income will be overstated

Regarding net pay, which of the following statements is incorrect? A) The net pay amount is not important for accounting purposes. B) The amount of compensation that the employee actually takes home is net pay. C) The employer either writes a paycheck to each employee for his or her net pay or directly deposits the employee's net pay into the employee's bank account. D) Net pay equals gross pay minus all deductions.

The net pay amount is not important for accounting purposes.

Which of the following is NOT an assumption of cost-volume-profit (CVP) analysis? A) The only factor that affects total costs is a change in volume, which increases or decreases total variable and mixed costs. B) The price per unit does not change as volume changes. C) Total fixed costs do not change. D) The price per unit changes as volume changes.

The price per unit changes as volume changes.

In regards to corporate income tax, which of the following statements is incorrect? A) Federal income taxes are calculated on a corporate tax return. B) Income Tax Expense is recorded when the federal income tax is incurred. C) When the corporation makes payment for federal income taxes, the account Income Tax Payable is credited. D) The amount of income taxes that the corporation owes but has not yet paid is classified as a current liability.

When the corporation makes payment for federal income taxes, the account Income Tax Payable is credited

Goods that have been started in the manufacturing process but are not yet complete are included in the ________. A) Finished Goods Inventory account B) Work-in-Process Inventory account C) Raw Materials Inventory account D) Cost of Goods Sold account

Work-in-Process Inventory account

The Merchandise Inventory account balance is $52,000. A physical count of inventory reveals that the actual inventory balance is $41,000. Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system.) A) a $41,000 credit to Merchandise Inventory B) a $52,000 debit to Cost of Goods Sold C) a $11,000 credit to Cost of Goods Sold D) a $11,000 credit to Merchandise Inventory

a $11,000 credit to Merchandise Inventory

Metropolitan Casting Services started the year with total assets of $130,000 and total liabilities of $45,000. The revenues and the expenses for the year amounted to $130,000 and $50,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $60,000. Calculate the amount of increase or decrease in stockholders' equity for the year. A) a $20,000 increase B) a $105,000 increase C) a $85,000 decrease D) a $60,000 increase

a $20,000 increase

Which one of the following companies is most likely to use job order costing? A) a gold refinery B) a law firm C) a surfboard manufacturer D) a soft drink company

a law firm

Companies that manufacture identical items through a series of uniform production steps use ________ to determine the cost per unit produced. A) a process costing system B) a job order costing system C) both of the above systems D) neither of the above systems

a process costing system

Which of the following businesses is most likely to use a process costing system? A) an accounting firm B) a law firm C) a soda manufacturer D) a construction company

a soda manufacturer

Jones Supply Services paid $350 cash, the amount owed from the previous month, to a materials supplier. Which of the following accounts decrease? A) Accounts Receivable B) Accounts Payable C) Retained Earnings D) Office Supplies

accounts payable

_______ represents a short-term liability created by purchasing "on account." A) Accounts Receivable B) Notes Payable C) Accounts Payable D) Expenses

accounts payable

_______ represent the right to receive cash in the future from customers for goods sold or for services performed. A) accounts receivable B) accounts payable C) equity D) expenses

accounts receivable

An expense that has been incurred but not yet paid is called a(n) ________. A) accrued revenue B) deferred expense C) deferred revenue D) accrued expense

accrued expense

The activities that are included in the operating activities section of the statement of cash flows are ________. A) activities that involve stockholders' equity B) activities that create revenue or expenses C) activities that increase or decrease long-term assets D) activities that pertain to construction of new facilities

activities that create revenue or expenses

Which of the following is an example of a period cost for a manufacturing company? A) advertising expense B) depreciation on factory equipment C) indirect materials D) property taxes for the factory

advertising expense

The matching principle states that ________. A) financial statements can be prepared for specific periods B) a business's activities can be sliced into small time segments C) all expenses should be recorded when they are incurred during the period D) companies should record revenue when it has been earned

all expenses should be recorded when they are incurred during the period

A business that accepts payments by credit and debit cards ________. A) is usually unable to attract more customers B) must check each customer's credit rating C) generally receives proceeds from credit and debit card transactions 30-45 days after the sale D) almost always pays a fee to the processor to cover the processing costs

almost always pays a fee to the processor to cover the processing costs

Property, plant, and equipment are ________. A) presented in order of the category name, with Land being presented last B) also called fixed or plant assets C) either tangible or intangible assets D) easily converted to cash

also called fixed or plant assets

Which of the following will lower the breakeven point? A) a decrease in the sales price per unit B) an increase in total fixed costs C) an increase in the variable cost per unit D) an increase in the sales price per unit

an increase in the sales price per unit

Outstanding stock represents shares of stock that ________. A) are held by the stockholders B) give the owners certain advantages C) have been authorized by state law D) have been issued but may or may not be held by stockholders

are held by the stockholders

Notes receivable ________. A) represent an oral promise to pay a fixed amount of principal plus interest on the maturity date B) are included in a miscellaneous category called other receivables C) are due within 12 months or within the normal operating cycle if the cycle is longer than a year are considered long-term assets D) are supported by a promissory note

are supported by a promissory note

Colorado Company uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Colorado Company Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase/(Decrease) Accounts Payable $4,000 $6,000 $(2,000) Accrued Liabilities 2,000 1,000 1,000 Long-term Notes Payable 84,000 90,000 (6,000) Total Liabilities $90,000 $97,000 $(7,000) How will the change in Accrued Liabilities be shown on the statement of cash flows? A) as an addition to Net Income B) as a deduction from Net Income C) as a deduction from operating cash flows D) as an addition to investing cash flows

as an addition to Net Income

For Office Supplies, the category of account and its normal balance is ________. A) liabilities and a debit balance B) assets and a debit balance C) liabilities and a credit balance D) assets and a credit balance

assets and a debit balance

Newton Corporation settles a liability by making a payment in cash. How does paying this liability affect the accounting equation of the business? A) Assets and liabilities decrease. B) Liabilities decrease and equity increases. C) Assets and liabilities increase. D) Assets increase and equity decreases.

assets and liabilities decrease

When a stockholder contributes land to a corporation in exchange for stock, ________. A) liabilities and stockholders' equity are increased B) assets and stockholders' equity are increased C) one asset is increased and another asset is decreased D) assets and liabilities are increased

assets and stockholders' equity are increased

Country Homes Corporation just recorded a transaction in its books. If this transaction increased the total liabilities by $10,000, then ________. A) assets must increase, or equity must decrease by $10,000 B) either assets or equity must decrease by $10,000 C) both assets and equity must each decrease by $5,000 D) assets must decrease by $10,000

assets must increase, or equity must decrease by $10,000

The predetermined overhead rate is calculated ________. A) after actual overhead costs have been determined B) at the end of the accounting period C) before the accounting period begins D) after indirect materials and labor have been used in production

before the accounting period begins

If goods are sold on terms FOB shipping point, the ________. A) seller normally pays the transportation costs B) buyer normally pays the transportation costs C) buyer and the seller split the transportation costs D) shipping company bears the transportation cost

buyer normally pays the transportation costs

Montgomery Equipment Rental Company received $1,000 cash from a customer; the amount was owed to the business from the previous month. What is the effect of this transaction on the accounting equation? A) Accounts Receivable increases and Service Revenue increases. B) Cash increases and Accounts Receivable decreases. C) Cash increases and Service Revenue increases. D) Cash increases and Accounts Payable decreases.

cash increases and accounts receivable decrease

Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting? A) comparing actual to expected results B) choosing goals and deciding how to achieve them C) monitoring operations to keep the company on track D) monitoring and evaluating the results of operations

choosing goals and deciding how to achieve them

The entries that transfer the revenue, expense, and dividends balances to the Retained Earnings account to prepare the company's books for the next period are called ________ entries. A) closing B) opening C) adjusting D) end of period

closing

Which of the following best describes horizontal analysis? A) comparing financial statement line items from year to year for the same company B) expressing each financial statement amount as a percentage of a budgeted amount C) comparing a company's financial statements with other companies D) calculating key ratios to evaluate performance

comparing financial statement line items from year to year for the same company

The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________. A) transferred in costs B) cost of sales C) finished goods costs D) conversion costs

conversion costs

Which of the following represents the combined sum of direct labor costs and manufacturing overhead costs? A) conversion costs B) period costs C) prime costs D) fixed costs

conversion costs

Martinville, Inc. earned revenues of $18,000 and incurred expenses of $4,000. The company declared and paid cash dividends of $3,500. What is the balance in the Income Summary account prior to closing net income or loss to the Retained Earnings account? A) debit balance of $14,000 B) debit balance of $10,500 C) credit balance of $14,000 D) credit balance of $18,000

credit balance of $14,000

Salaries Payable, Accounts Payable, and Unearned Revenue are examples of ________. A) short-term investments B) fixed assets C) current liabilities D) long-term liabilities

current liabilities

Which of the following items is a measure of a company's ability to collect receivables? A) inventory turnover ratio B) current ratio C) days' sales in receivables D) account receivable balance

days' sales in receivables

Which of the following entries will be necessary to close the Insurance Expense account at the end of the year? A) debit Insurance Expense and credit Income Summary B) debit Insurance Expense and credit Common Stock C) debit Retained Earnings and credit Insurance Expense D) debit Income Summary and credit Insurance Expense

debit Income Summary and credit Insurance Expense

On September 1, 2018, Real Estate Professionals, Inc. paid $7,000 in advance for an eight-month rental space covering the period of September 1, 2018 through April 30, 2019. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2018 would include a ________. A) debit of $7,000 to Cash B) credit of $7,000 to Prepaid Rent C) debit of $3,500 to Rent Expense D) credit of $3,500 to Rent Expense

debit of $3,500 to rent expense

The Golden Company issues $539,000 of 7%, 10-year bonds at 104 on March 31, 2019. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to record the issuance includes a ________. A) debit to Cash for $539,000 B) credit to Bonds Payable for $560,560 C) debit to Premium on Bonds Payable for $21,560 D) debit to Cash for $560,560

debit to Cash for $560,560

On the ________, cash dividends become a liability of a corporation. A) declaration date B) date of record C) last day of the fiscal year D) payment date

declaration date

When the total fixed costs decrease, the breakeven point ________. A) increases B) decreases C) remains the same D) increases proportionately

decreases

Treasury stock ________. A) decreases the number of shares issued B) increases the number of shares issued C) increases the number of shares outstanding D) decreases the number of shares outstanding

decreases the number of shares outstanding

If an adjusting entry includes a debit to Rent Expense, it indicates that the payment of rent had been previously recorded as a(n) ________. A) deferred expense B) depreciation expense C) accrued expense D) accrued revenue

deferred expense

The allocation of a plant asset's cost to expense over its useful life is called ________. A) residual value B) book value C) accrued revenue D) depreciation

depreciation

Which of the following is a product cost? A) sales commissions B) CEO's salary C) delivery van depreciation D) depreciation on production equipment

depreciation on production equipment

The costs most easily traced to each product manufactured are ________. A) direct materials and direct labor B) direct materials and indirect materials C) direct labor and manufacturing overhead D) indirect materials and indirect labor

direct materials and direct labor

Which of the following is a variable cost? A) property taxes B) salary of plant manager C) direct materials cost D) straight-line depreciation expense

direct materials cost

The matching principle ________. A) guides accounting for revenues and expenses B) results in the matching of expenses incurred during the period to the cash paid for expenses C) ensures that all expenses are recorded when they are incurred during the period D) results from a natural link between all expenses and revenues

ensures that all expenses are recorded when they are incurred during the period

The owners' claims to the assets of the business are called ________. A) return on assets B) expenses C) equity D) debt

equity

State Street Beverage Company issues $805,000 of 9%, 10-year bonds on March 31, 2017. The bonds pay interest on March 31 and September 30. Which of the following statements is true? A) If the market rate of interest is 10%, the bonds will issue at a premium. B) If the market rate of interest is 10%, the bonds will issue at a discount. C) If the market rate of interest is 10%, the bonds will issue at par. D) If the market rate of interest is 10%, the bonds will issue above par.

f the market rate of interest is 10%, the bonds will issue at a discount.

Under which of the following inventory costing methods is the ending inventory based on the costs of the most recent purchases? A) specific identification B) weighted-average C) last-in, first-out D) first-in, first-out

first-in, first-out

When inventory costs are declining, which of the following inventory costing method will result in the lowest ending merchandise inventory? A) first-in, first-out B) last-in, first-out C) weighted-average D) specific identification

first-in, first-out

Which of the following inventory costing methods yields the highest net income during a period of rising inventory costs? A) specific identification B) weighted-average C) last-in, first-out D) first-in, first-out

first-in, first-out

Which of the following inventory costing methods yields the lowest cost of goods sold during a period of rising inventory costs? A) specific identification B) weighted-average C) last-in, first-out D) first-in, first-out

first-in, first-out

The Work-in-Process Inventory account includes the ________. A) goods that are ready to be sold B) goods that are partially completed C) goods that have been sold in the market D) goods that are returned by customers

goods that are partially completed

The Allowance for Bad Debts account ________. A) is a liability account B) holds the pool of "unknown" uncollectible accounts C) increases with a debit D) is added to accounts receivable

holds the pool of "unknown" uncollectible accounts

The matching principle requires businesses to report Warranty Expense ________. A) in the same period that the company records the revenue related to that warranty B) in the period prior to which the company records the revenue related to that warranty C) in the period after the related revenue is recorded D) in the long-term assets section of the balance sheet

in the same period that the company records the revenue related to that warranty

The fixed costs per unit will ________. A) increase as production decreases B) decrease as production decreases C) remain the same as production levels change D) increase as production increases

increase as production decreases

MacMan, Inc. reported the following data: 2019 2018 Amount Percentage Revenues $6370 $4940 $1430 28.95% Cost of goods sold 3450 2200 1250 56.82% Gross profit 2920 2740 180 6.57% Operating expenses: Sales and marketing expense 710 630 80 12.7% General and administrative expenses 410 425 -15 -3.53% Research and development expense 480 490 -10 -2.04% Other expense 440 710 (270) (38.03)% Total operating expenses 2040 2255 (215) (9.53)% Income before income tax 880 485 395 81.44% Income tax expense 260 240 $20 8.33% Net income (loss) $620 $245 $375 153.06% The horizontal analysis shows that cost of goods sold has ________. (Round your answer to two decimal places.) A) increased by 28.95% B) decreased by 28.95% C) increased by 56.82% D) decreased by 56.82%

increased by 56.82%

When the sales price per unit decreases, the breakeven point ________. A) increases B) decreases C) remains the same D) decreases proportionately

increases

Which of the following will be included in manufacturing overhead costs? A) indirect labor and indirect materials used B) salaries of salesmen C) direct materials and direct labor D) delivery costs to ship goods to customers

indirect labor and indirect materials used

The activity-based costing system improves the allocation of ________. A) indirect manufacturing costs B) direct labor C) direct materials D) sales commissions

indirect manufacturing costs

Patents, copyrights, and trademarks are examples of ________. A) short-term investments B) fixed assets C) long-term investments D) intangible assets

intangible assets

The retained earnings of a corporation is ________. A) internally generated equity that is earned by profitable operations that is not distributed to stockholders B) externally generated equity that is contributed by shareholders C) externally generated equity that is acquired from banks and other creditors D) internally generated equity that is received from employee stock purchases

internally generated equity that is earned by profitable operations that is not distributed to stockholders

The profit margin ratio ________. A) focuses on the liquidity of the business B) is computed by dividing net sales by net income C) shows how much gross profit a business earns on every $1.00 of sales D) is often compared to the industry average

is often compared to the industry average

The allowance method of accounting for uncollectible receivables ________. A) is used to measure bad debts B) violates the matching principle C) records bad debt expense in the period the accounts receivable is written off D) requires the use of a contra liability account.

is used to measure bad debts

Which of the following inventory costing methods yields the lowest net income during a period of rising inventory costs? A) specific identification B) weighted-average C) last-in, first-out D) first-in, first-out

last-in, first-out

Mitchell Company receives a bill from one of its suppliers for advertising services received and will pay the supplier next month. How does the receipt of the bill from the supplier affect the accounting equation of Mitchell? A) Assets and equity decrease. B) Liabilities increase and equity decreases. C) Assets and liabilities increase. D) Liabilities and equity increase.

liabilities increase and equity decreases

he Salaries Payable account is a(n) ________. A) liability account with a normal debit balance B) asset account with a normal debit balance C) liability account with a normal credit balance D) asset account with a normal credit balance

liability account with a normal credit balance

Under which of the following categories would bonds held as an investment for more than a year appear? A) current assets B) long-term liabilities C) long-term assets D) current liabilities

long-term assets

The accounting principle that ensures all expenses are recorded during the period when they are incurred and offsets those expenses against the revenues of the period is called the ________ principle. A) comparison B) accrual C) matching D) revenue recognition

matching

Adjusting entries are needed to correctly measure the ________. A) ending balance in the Cash account B) net income (loss) on the balance sheet C) net income (loss) on the income statement D) beginning balance in the Cash account

net income (loss) on the income statement

Contribution margin ratio is the ratio of contribution margin to ________. A) net sales revenue B) cost of goods sold C) total variable costs D) total fixed costs

net sales revenue

Which of the following is the most appropriate cost driver for allocating the cost of warranty services? A) number of employees B) number of materials purchased C) number of machine hours D) number of service calls

number of service calls

For a manufacturing company, which of the following is a period cost? A) direct materials used B) office rent C) wages expense of factory workers D) indirect materials used

office rent

Which of the following is the typical order of the sections on a statement of cash flows? A) operating, financing, investing B) financing, investing, operating C) investing, operating, financing D) operating, investing, financing

operating, investing, financing

An account that is not closed at the end of the period is called a(n) ________. A) expense account B) temporary account C) permanent account D) revenue account

permanent account

Atlanta Company sold equipment for cash. The income statement shows a gain on the sale of $1020. The net book value of the asset was $3710. Which of the following statements describes the cash effect of the transaction? A) negative cash flow of $4730 for financing activities B) negative cash flow of $2690 for operating activities C) positive cash flow of $4730 from investing activities D) positive cash flow of $2690 from investing activities

positive cash flow of $4730 from investing activities

When the total fixed costs increase, the contribution margin per unit ________. A) increases B) decreases C) increases proportionately D) remains the same

remains the same

The expected value of a depreciable asset at the end of its useful life is called ________. A) book value B) residual value C) depreciation expense D) accrued expense

residual value

________ is the equity earned by profitable operations that is not distributed to stockholders. A) Assets B) Dividend C) Retained earnings D) Common stock

retained earnings

Maxwell Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing Services is its ________. A) revenue B) equity C) gain D) debt

revenue

Which of the following would be considered a period cost for a manufacturing company? A) indirect materials B) factory utilities C) direct labor D) sales salaries

sales salaries

Which of the following will most likely be considered an indirect material cost for a bakery? A) spices B) flour C) milk D) eggs

spices

Jason Repair Corporation incurred $1,500 as advertising expense and promised to pay the advertising agency within 30 days. Which of the following will decrease as a result of this transaction? A) Assets B) Stockholders' equity C) Liabilities D) Revenues

stockholders' equity

To match expenses against revenues means to ________. A) add expenses incurred during one period to revenues earned during that same period B) subtract expenses incurred during one period from revenues earned during the previous period C) add expenses incurred during one period to revenues earned during the previous period D) subtract expenses incurred during one period from revenues earned during that same period

subtract expenses incurred during one period from revenues earned during that same period

Preferred stock is stock ________. A) that sells for a high price B) that is distributed to employees as annual bonuses C) that is distributed by corporations to avoid liquidation D) that gives its owners certain advantages over common stockholders

that gives its owners certain advantages over common stockholders

Which of the following statements is true if the variable cost per unit increases while the sales price per unit and total fixed costs remain constant? A) The breakeven point decreases. B) The contribution margin increases. C) The breakeven point remains the same. D) The breakeven point increases.

the breakeven point increases

Which of the following concepts represent the time value of money? A) the concept that money becomes obsolete over time B) the concept that money earns interest over time C) the concept that money loses its purchasing power over time D) the concept that money can be converted into other currencies over time

the concept that money earns interest over time

Which of the following would most likely be accounted for using a job order costing system? A) the production of potato chips B) the production of sports energy drinks C) the creation of wedding photography portraits D) the refining of gasoline

the creation of wedding photography portraits

Which of the following sections from the statement of cash flows includes the cash paid for the purchase of Treasury Stock? A) the financing activities section B) the operating activities section C) the investing activities section D) the non-cash investing and financing section

the financing activities section

Which of the following sections of the statement of cash flows includes the issuance of stock and the payment of cash dividends? A) the investing activities section B) the financing activities section C) the operating activities section D) the non-cash investing and financing section

the financing activities section

Which of the following sections of the statement of cash flows include purchases and sales of long-term assets? A) the financing activities section B) the operating activities section C) the investing activities section D) the non-cash investing and financing section

the investing activities section

Which of the following sections of the statement of cash flows include activities that create revenue and expenses of the business? A) the investing activities section B) the financing activities section C) the operating activities section D) the non-cash investing and financing section

the operating activities section

Which of the following can be an effect of a transaction that increased an asset of a corporation for the accounting equation to balance? A) There is an equal decrease in another asset. B) There is an equal decrease in equity. C) There is an equal decrease in a liability account. D) Both liabilities and equity decrease.

there is an equal decrease in another asset

Which of the following accounting terms assumes that a business's activities can be divided into small segments and that financial statements can be prepared for specific periods, such as a month, quarter, or year? A) adjusting entry concept B) economic entity concept C) matching principle D) time period concept

time period concept

Which of the following represents the correct flow of accounting data? A) transactions occur; transactions are analyzed; transactions are journalized and posted; source documents are prepared B) transactions occur; source documents are prepared; transactions are journalized and posted; C) transactions occur; source documents are prepared; transactions are analyzed; transactions are journalized and posted D) source documents are prepared; transactions occur; transactions are analyzed; transactions are journalized and posted

transactions occur; source documents are prepared; transactions are analyzed; transactions are journalized and posted

A liability created when a business receives cash from customers in advance of providing services or delivering goods is called a(n) ________. A) notes receivable B) unearned revenue C) accrued liability D) service revenue

unearned revenue

Which of the following would be considered a direct labor cost for a manufacturing company? A) wages of the assembly line staff B) wages of the factory janitors C) wages of the factory manager D) salaries of the internal auditors

wages of the assembly line staff

The beginning inventory costs and the product costs of the current period are combined to determine the average cost of equivalent units of production under the ________. A) equivalent units method B) conversion costs method C) first-in, first-out method D) weighted-average method

weighted-average method