Financial accounting final

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A fixed asset is purchased at the beginning (January 1) of 2011. Information relating to the asset is as follows: Cost of acquisition $220,000 Residual Value estimated at the time of acquisition $20,000 Residual Value revised estimate on 1 January 2012 Nil Useful Life estimated at the time of acquisition 20 years Useful Life revised estimate on 1 January 2013 16 years Based on this information, the depreciation for 2012 will be equal to:

$11,053

During February of a certain year, the Bacharat Hotel purchases inventory for $12,000. The hotel also bought a kitchen stove for $3,750 and sold stocks for $50,000 in February.Since this hotel was recently established (beginning of February), it did not yet admit guests. If everything else remains unchanged, the cashflow from operating activities would be equal to:

$12,000 outflow

$12,500

A company XYZ has the following balance sheet items: Accounts payable $55,000.00 Accounts Receivable $35,000.00 Allowance for Doubtful Accounts $10,000.00 Cash $55,000.00 Food Inventory $25,000.00 Interest Payable $10,000.00 Notes Receivables (6 months) $17,000.00 Prepaid Insurance $7,000.00 Wages Payable $15,000.00 Based on the above information, the company can calculate its total assets at:

$129,000

The following data is from a balance sheet of the Yesteryear Corporation on December 31 of a certain year: Common stock $20,000 Treasury stock ($15,569,000) Retained earnings $25,755,800 Total liabilities $14,637,000 Paid-in capital $3,861,000 Based on the available information, the total stockholders' equity is estimated at:

$14,067,800

$14,210.53

The following are balance sheet accounts for Blair's Catering: Accounts payable $5,000 Accounts receivable $4,000 Michael Johnson, Capital $15,000 Cash $1,000 Equipment $10,000 Food supplies $2,000 Prepaid rent $3,000 Based the information above, the total equity of this company is then:

$15,000

The following data is from a balance sheet of the Silvestia Corporation on May 31 of a certain year: Common stock $23,000 Treasury stock ($12,154,350) Retained earnings $29,619,170 Total liabilities $16,832,550 Paid-in capital $4,440,150 Based on the available information, the total stockholders' equity is estimated at:

$16,559,570

You are provided with the following information on Tapioca Resort Inn: Beginning inventory $40,000 Purchases $30,000 Ending inventory $55,000 Employee meals $1,000 Transfer to Food & Beverage Department $1,500 The goods are sold for $30,000. Based on the available information, you calculate that the profit for this hotel is:

$17,500

The following data is from a balance sheet of the Yesteryear Corporation on December 31 of a certain year: Common stock $20,000 Treasury stock ($10,569,000) Retained earnings $25,755,800 Total liabilities $14,637,000 Paid-in capital $3,861,000 Based on the available information, the total stockholders' equity is estimated at:

$19,067,800

The following data is from a balance sheet of the Yesteryear Corporation on December 31 of a certain year: Common stock$20,000 Treasury stock($10,569,000) Retained earnings$25,755,800 Total liabilities$14,637,000 Paid-in capital$3,861,000 Based on the available information, the total stockholders' equity is estimated at:

$19,067,800

A resort chain purchased an existing hotel (all-in: land, building, and equipment) for a lump-sum of $41.75 million an financed this through a loan acquired via a bank. The fair value of each of the components of the purchase is given below: Land $2,000,000 Building $37,000,000 Equipment $1,000,000 Fair value $40,000,000 Based on this information, the resort will activate the land in the balance sheet for:

$2,087,500

In a balance sheet, prepared according to the T-account form, the total liabilities and owners' equity amounts to $2,875,000. Therefore, in a balance sheet, prepared according to a reporting from, the total assets will be equal to:

$2,875,000

The following data comes from the balance sheet of the Stratosphere Corporation on May 31 of a certain year: Common stock $26,250 Treasury stock ($11,097,450) Retained earnings $27,043,590 Total liabilities $15,368,850 Paid-in capital $4,054,050 Based on the available information, the total stockholders' equity is estimated at:

$20,026,440

Given the following information, estimate the value of ending inventory using the gross profit method: Beginning inventory $200 Purchases $50 Sales $100 Gross profit percentage 50%

$200

Given the following information, estimate the value of ending inventory using the gross profit method: Beginning inventory $200 Purchases $50 Sales $100 Gross profit percentage 50%

$200

A fixed asset has a useful life of 5 years is purchased on the first of January of a certain. The purchasing price of the asset is $3,000, and its residual value is expected to be $750. Based on this information, the book value at the end of year 2 will be equal to:

$2100

You are given the following table from the Meadow Retail Store: Cost Retail Beginning inventory $16,000 $25,000 Purchases $65,000 $105,000 Goods available for sale $81,000 $130,000 Sales $90,000 Ending inventory at retail prices $40,000 Based on the retail method the cost price of the ending inventory is equal to:

$24,923

A hotel trades an old van, which originally cost $20,000 and has a net book value of $4,000, for a new van. The new van has a market value of $28,000, and to purchase it, the hotel pays $22,000 in cash as well as turning in the old van. The new van is recorded on the books as having a value of:

$26,000

The Ultimate Restaurant Corporation declares a stock dividend as well as its usual cash dividend of $.25 per share. For the stock dividend, existing stockholders will receive 10 percent of the amounts of stock they currently hold. If Joan currently has 1,000 shares of stock in this company, she will receive cash dividends and stock dividends worth a total of:

$275

An interest-bearing note receivable dated April 14 matures on July 23. The principal amount is $10,000, the annual interest rate is 10 percent, and the total interest income for the note is _____________. (Assume that a year has 360 days for the purpose of calculating interest.)

$277.78

The Quiet Canyon Hotel & Spa provides the following information on the shareholders' equity from its balance sheet: 7% Preferred stock, $50 par, callable at $57 30,000 shares authorized and 25,000 shares issued$1,425,000 Common stock, $7 par value 1,500,000 shares authorized, 1,000,000 shares issued? Additional paid-in capital--Common stock12,000,000 Retained earnings9,000,000 Based on this information, the total amount of the stockholders' equity is equal to:

$29,425,000

The Quiet Canyon Hotel & Spa provides the following information on the shareholders' equity from its balance sheet: 7% Preferred stock, $50 par, callable at $57 30,000 shares authorized and 25,000 shares issued $1,425,000 Common stock, $7 par value 1,500,000 shares authorized, 1,000,000 shares issued ? Additional paid-in capital--Common stock 12,000,000 Retained earnings 9,000,000 Based on this information, the total amount of the stockholders' equity is equal to:

$29,425,000

During a certain year, the Hotel Victoria had cash cash sales of $800,000 and sales on account of $2,540,000. During the same year, the Accounts Receivable (hotel guests) increased by $10,000. Consequently, the cash received from hotel guests during the certain year was equal to:

$3,330,000

You are given the following table from the Mia Retail Store: Beginning inventory $16,000 Purchases $65,000 Goods available for sale $81,000 Sales $90,000 The company's historical gross profit percentage has averaged 25% over the last 3 years. Based on the gross profit method the cost price of the ending inventory is equal to:

$30,000

You are given the following table from the Mia Retail Store: Beginning inventory$16,000 Purchases$65,000 Goods available for sale$81,000 Sales$90,000 The company's historical gross profit percentage has averaged 25% over the last 3 years. Based on the gross profit method the cost price of the ending inventory is equal to:

$30,000

The Wilson Inn sold 10,000 shares of $5 par value common stock for $30 per share. How much would be reported as sale of common stock on the statement of cash flows?

$300,000

Use the LIFO method to value (at cost) the ending inventory. There was no beginning inventory. The purchases during the month were as follows: 5 units @ $2.00 apiece 10 units @ $2.10 apiece 15 units @ $2.20 apiece If the ending inventory were 15 units, it would be valued under LIFO at:

$31.00

A resort chain purchased an existing hotel (all-in: land, building, and equipment) for a lump-sum of $40 million an financed this through a loan acquired via a bank. The fair value of each of the components of the purchase is given below: Land $1,000,000 Building $40,000,000 Equipment $750,000 Fair value $41,750,000 Based on this information, the resort will activate the building in the balance sheet for:

$38,323,353

The Aquatics Corporation issues only common stock. It has total stockholders' equity of $200,000 and 50,000 outstanding shares. The par value of each share is $3. The book value per share of stock is:

The Coral Reef Adventure Resort plans to transport guests to its underwater facility in a submarine. The sub cost $250,000, has a salvage value of $10,000, and has an estimated useful life of 48,000 hours, or 6 years' use. During the first year of the sub's operation, it was used for 8,000 hours. Using the straight-line method of depreciation, calculate the sub's depreciation for the first year.

$40,000

The Coral Reef Adventure Resort plans to transport guests to its underwater facility in a submarine. The sub cost $250,000, has a salvage value of $10,000, and has an estimated useful life of 48,000 hours, or 6 years' use. During the first year of the sub's operation, it was used for 8,000 hours. Using the units of production method of depreciation, calculate the sub's depreciation for the first year.

$40,000

$450

$49,000

You are the auditor at Cujo Resort. Your boss had asked you to calculate the maturity value of an interest-bearing note of $5,000, which should be repaid in 90 days from now (interest = 5%). A year is considered having 360 days. Based on this information you calculate that the maturity value is equal to:

$5,062.50

A 60-day note for $5,000 with an interest rate of 12 percent per annum will have a maturity value of _____________. (Assume that there are 360 days in a year for the purpose of calculating the interest.)

$5,100

A company VAMPIRE Inc. has the following information from its balance sheet: Cash $70,000 Accounts receivable $50,000 Allowance for Doubtful Accounts $4,500 Inventory $125,000 Based on this information, the value of the accounts receivable is equal to:

$50,000

Accrued Payroll was $10,000 and $15,000 at the beginning and end of 20X4, respectively. The payroll expense for 20X4 totaled $520,000. Cash outflow for payroll during 20X4 totaled:

$515,000

You are the night auditor at the Werewolf Resort. When there is a shining full moon, you all of a sudden remember that you boss had asked you to calculate the interest of an interest-bearing note of $5,000, which should be repaid in 90 days from now (interest = 5%). A year is considered having 360 days. Based on this information you calculate that the interest is equal to:

$62.50

The Loch Ness Monster Hotel uses the aging of accounts receivable method of estimating bad debts. As of a certain year, the summarized aging schedule and expected loss percentages are as follows: Aging of Account.png Based on this table, we can estimate the bad debts at:

$621

A motel with 100 rooms sold an average 80 room nights per day. Its average daily rate was $80. Its RevPAR is:

$64

A company Dr Jekyll and Mr Hyde Inc. has the following information from its balance sheet: Cash $500,000 Accounts receivable $70,000 Allowance for Doubtful Accounts $4,500 Inventory $125,000 At the same time, there is a write-off of $2,000 on the accounts receivable. Based on this information, the value of the accounts receivable after the write-off is equal to:

$65,500

A resort chain purchased an existing hotel (all-in: land, building, and equipment) for a lump-sum of $37 million an financed this through a loan acquired via a bank. The fair value of each of the components of the purchase is given below: Land $1,000,000 Building $40,000,000 Equipment $750,000 Fair value $41,750,000 Based on this information, the resort will activate the equipment in the balance sheet for:

$664,670.54

Net credit sales for the Breakeven Diner for the past year stands at $4,500. If the diner's manager uses the percentage of sales method of estimating bad debt and uses 1.5 percent for this purpose, the amount of bad debt for the year would be:

$67.50

The Coral Reef Adventure Resort plans to transport guests to its underwater facility in a submarine. The sub cost $250,000, has a salvage value of $10,000, and has an estimated useful life of 48,000 hours, or six years' use. During the first year of the sub's operation, it was used for 8,000 hours. Using the sum-of-the-years' digits method of depreciation, calculate the sub's depreciation for the first year.

$68,571

The Quiet Canyon Hotel & Spa provides the following information on the shareholders' equity from its balance sheet: 7% Preferred stock, $50 par, callable at $57 30,000 shares authorized and 25,000 shares issued $1,425,000 Common stock, $7 par value 1,500,000 shares authorized, 1,000,000 shares issued ? Additional paid-in capital--Common stock 12,000,000 Retained earnings 9,000,000 Based on this information, the value of the common stocks is equal to:

$7,000,000

The Chupacabra Resort has the following information from its balance sheet: Cash $600,000 Accounts receivable $75,000 Allowance for Doubtful Accounts $5,000 Inventory $125,000 At the same time, there is a write-off of $3,000 on the accounts receivable. Based on this information, the value of the accounts receivable BEFORE the write-off is equal to:

$70,000

The River Hotel's Dividends Payable account at the beginning and end of 20X3 totaled $40,000 and $35,000, respectively. Assume that dividends declared during 20X3 totaled $65,000. The dividends paid by the River Hotel during 20X3 totaled:

$70,000

Cami's floating casino achieved an earnings per share of $12 last accounting period. If her firm has 1,500 shareholders and 6,000 shares of common stock outstanding, how much net income did the firm earn last period?

$72,000

$80,000

A restaurant submits credit card slips that total $1,000 to American Express for payment. Suppose that American Express charges a 4 percent processing fee. The amount the hotel will receive is:

$960

A company Y has a total beverage sale of $2,350 in cash. A possible journal entry would be:

Cash $2,350 Beverage sales $2,350

Highway resort buys a luxury SUV for $100,000, depreciates $10,000 per year over the following 10 years. However, by the end of year 7, the resort decides to sell this SUV for $40,000. Based on this information, the resort has to produce the following journal entry of the disposal of the SUV:

Cash $40,000 Accumulated depreciation $70,000 Gain on asset disposal $10,000 Company cars $100,000

Pacific Tundra Hotel, currently has common stock of $250,000, additional paid-in capital of $875,000, and retained earnings of $80,000. On December 15 of certain year, it issues 15,000 shares of $10 par common stock at $30 per share. Based on this information, the journal entry for the common stock issuance of December 15 would be:

Cash $450,000 Common stock $150,000 Additional paid-in capital in excess of par $300,000

A company Y decides that its petty cash amount is too high and wants to reduce this from $375 to $300. Based on this, the journal entry to reduce this petty cash is then...

Cash $75 Petty cash $75

A company ABC has cash food sales for the day for $750. A possible T-account booking is

Cash T-account: debit side Food sales T-account: credit side

A customer at Ale Castle pays cash $68 to the restaurant for a meal. A possible T-account booking is:

Cash T-account: debit side Food sales T-account: credit side

Secret Jungle Resort, currently has common stock of $250,000, additional paid-in capital of $875,000, and retained earnings of $80,000. On May 15 of certain year, it issues 15,000 shares of $10 par common stock at $30 per share. Based on this information, value of the stock equity as per that date would be:

Common stock $400,000 Paid-in capital in excess of par $1,175,000 Retained earnings $80,000 Total stockholders' equity $1,655,000

A revenue account on the income statement increases by a ..... transaction.

Credit

The usual balance for an Owner's equity account on a T-account is

Credit

The usual balance for an liability account on a T-account is

Credit

A debt-to-equity ratio of 0.97 should be interpreted as follows:

Creditors provide $0.97 for each $1 that stockholders provide

Cash invested in a 90-day certificate of deposit will be classified under:

Current assets

If a company has investments in Apple stocks (250 shares), this will be classified in the balance sheet under:

Current assets

A Notes Payable (6 months) will be classified in the balance sheet under:

Current liabilities

An expense account on the income statement increases by a ..... transaction.

Debit

The usual balance for an asset account on a T-account is

Debit

Danny Default is the maker of a note to the Long-Stay Hotel for his stay there. On the note's maturity date, Danny has not paid the note. Now the note is called a:

Dishonored note

The Tally-Ho Restaurant uses the percentage of sales method of estimating bad debt. Net credit sales for last year were $15,000, and net sales amounted to $21,000. If the firm's accountants estimated last year's uncollectible accounts to total $300, what percentage did they apply to determine this amount?

2 percent

At the beginning of the year, Cash amounted to $100,000 for the Adams Company. At the end of the year, thetotal was $120,000. The relative change in cash from the beginning to the end of the year for this firm is:

20 percent

The balance sheet of the Majestic Lake Resort shows the following items (in thousands $): Current assets $1,712 Long-term assets $1,127 Plant assets $1,273 Intangible assets $1,975 Total assets $ According to the percentage of single item basis method of calculation, the plant assets are

20.9% of the total assets

Freddy's Place had a monthly beverage turnover of 1.25 times. This means that beverages were restored on an average of approximately _________ throughout the year.

24 days

An inventory of your petty cash fund (total = $200) found the following: Travel expense voucher $20 Office supply voucher $15 Coins and banknotes $170 Based on this inventory, your journal entry should contain....

A cash account booking of $30 credit

An inventory of your petty cash fund (total = $200) found the following: Travel expense voucher $20 Office supply voucher $15 Coins and banknotes $165 Based on this inventory, your journal entry should contain....

A cash account booking of $35 credit

Which of the following statements about inventory control systems is true?

A perpetual inventory system eliminates the need for a monthly physical count of items in storage

Which of the following is a policy or practice that endangers the security of a hospitality firm's inventory?

A physical inventory is taken only once every five years

What happens to the fundamental accounting equation when the sole proprietor of a business invests more cash in it?

Assets increase, liabilities remain the same, and owner's equity increases

A company Z purchases beverages for $120. These beverages will be sold this month.

Beverage Expense $ 120 Cash $ 120

The Creature from the Black Lagoon Resort shows you the following journal entry: Provision for Doubtful Accounts $7,500 Allowance for Doubtful Accounts $7,500 Based on this information, you can deduce that this journal entry is based on:

Both of these

The Creature from the Black Lagoon Resort shows you the following journal entry: Provision for Doubtful Accounts$7,500 Allowance for Doubtful Accounts$7,500 Based on this information, you can deduce that this journal entry is based on:

Both of these

Statement I: Income statement is the most widely followed report by the media and investment community. Statement II: Income statement details revenue, expenses, and profits during a particular period.

Both statements are correct

Statement I: Revenues are sales to customers during a period, reduced by returns or discounts. Statement II: Cost of sales (or cost of goods sold) consist of (I) direct labor; (ii) direct materials; and (iii) manufacturing overhead.

Both statements are correct

Statement I: The balance sheet is a guide to the solvency of a company. Statement II: The balance sheet is a snapshot of the financial position of a company at a particular data..

Both statements are correct

Statement I: Revenues are considered when the service is provided, regardless of when the cash is received. Statement II: Expenses are generally matched with the underlying revenues to provide an as adequate picture as possible.

Both statements are incorrect

Statement I: Revenues must not be earned and realized before being considered. Statement II: Expenses must not be matched with revenues.

Both statements are incorrect

Statement I: The income statement gives you an overview of the overall financial health of a company. Statement II: A business that is making a loss, does not necessarily be performing badly.

Both statements are incorrect

Twin Bay Resort, currently has common stock of $275,000, additional paid-in capital of $900,000, and retained earnings of $90,000. On February 12 of certain year, it issues 20,000 shares of $10 par common stock at $7.50 per share. Based on this information, the journal entry for the common stock issuance of February 12 would be:

Cash $150,000 Additional paid-in capital in excess of par $50,000 Common stock 200000

A lodging business sells one of its luxury SUVs for $ 10,000. This car was bought 3 years ago for $30,000. The depreciation is $7,500 per year. Based on this, the lodging business has made a:

Gain of $ 2,500

Which of the following statements about consolidated financial statements is true?

Generally, most of the voting stock of a subsidiary should be owned by the holding company or by the same interests if the associated companies' financial statements are to be combined

Income statement accounts in the general ledger are called

Nominal accounts

If the General Manager of a hotel gets a $100,000 loan from the hotel, to be repaid in 5 years, this will be classified in the balance sheet under:

Noncurrent receivables

None of these

If a company issues stocks to retire a mortgage, this will be included in the cash flow statement category of:

None of these

Your company just received its bank statement, which indicates that the balance is $4,950. The cash balance in your books is, however, $5,250. You know as well that there is an NSF check for $300, which was returned with the bank statement, and which explains the difference. To reconcile the bank statement with the cash balance in your books, you should...

None of these

Major elements of the income statement are

Sales, Expenses, and (net) Income/(net) Loss

You are provided with the following information on Tapioca Resort Inn: Beginning inventory$40,000 Purchases$30,000 Ending inventory$55,000 Employee meals$1,000 Transfer to Food & Beverage Department$1,500 The goods are sold for $30,000. However, upon a deeper inspection, you noticed that your beginning inventory should have been $45,000 instead of $40,000. Based on the available information, you calculate that the profit for this hotel was:

Overestimated by $5,000

You are provided with the following information on Tapioca Resort Inn: Beginning inventory $40,000 Purchases $30,000 Ending inventory $55,000 Employee meals $1,000 Transfer to Food & Beverage Department $1,500 The goods are sold for $30,000. However, upon a deeper inspection, you noticed that your ending inventory should have been $53,000 instead of $55,000. Based on the available information, you calculate that the profit for this hotel was:

Overstated by $2,000

A company that has Treasury Stock in its balance sheet, will classify this under:

Owner's equity

Rented space that has been renovated and will be amortized in 10 years will be classified under:

Property and equipment

The renovated lobby of an existing hotel is classified under:

Property and equipment

Sasquatch Corporation has $750,000 in accounts receivable. The company estimates that 1 percent of their accounts receivable are uncollectible. Based on this information, the following journal entry can be prepared:

Provision for Doubtful Accounts $7,500 Allowance for Doubtful Accounts $7,500

Provision for Doubtful Accounts $1,750 Accounts Receivable $1,750

Provision for Doubtful Accounts$1,750 Accounts Receivable$1,750

Leftown is a former guest who owes the Munchies Restaurant $750 for a banquet. Restaurant managers have determined that this debt is now uncollectible. If the restaurant uses the direct write-off method of accounting for bad debt expense, the journal entry to recognize this bad debt would be a debit to ___________ and a credit to _________________.

Provision for Doubtful Accounts; Accounts Receivable

Your company just received its bank statement, which indicates that the balance is $4,950. The cash balance in your books is, however, $5,250. You know as well that there is a deposit in transit for $300 that explains the difference. To reconcile the bank statement with the cash balance in your books, you should...

Increase the bank statement amount by $300

Your company just received its bank statement, which indicates that the balance is $5,250. The cash balance in your books is, however, $4,950. You know as well that there is a Note receivable collected by bank for $300 that explains the difference. To reconcile the bank statement with the cash balance in your books, you should...

Increase the cash in your books by $300

Your company purchased inventory from Dade Packing for $3,000, with the invoice indicating 2/10, n/30 According to the net method of recording purchases, the purchase of the inventory should be recorded as....

Inventory $2,940 Accounts Payable $2,940

Your company purchased inventory from Dade Packing for $3,000, with the invoice indicating 2/10, n/30 According to the gross method of recording purchases, the purchase of the inventory should be recorded as....

Inventory $3,000 Accounts Payable $3,000

If a company sells a fully depreciated vehicle, this will be included in the cash flow statement of:

Investing activities

During a certain year, the Hotel Victoria sold five luxury SUVs for $250,000. The hotel purchased these vehicles in the past for $350,000, and these vehicles had together an accumulated depreciation of $60,000. The cash flow section that will be affected by this transaction is:

Investing section for $250,000 inflow Operating section for $40,000 inflow

An investment in land to be developed in the future will be classified in the balance sheet under:

Investments

On December 1, of a certain year, the Board of Directors of the Rosewood Corporation announced that they were going to pay dividend of $1.35 per share. The company has 2 million shares outstanding. Based on this information, the journal entry for this announcement is:

Retained earnings $2,700,000 Dividends payable $2,700,000

Collette is the owner of a small motel who keeps her own financial records. She needs to record the income from room sales for the day. All of today's income was from a single group, and the group's representative paid the bill on account. The accounts that this income affects are:

Room Revenues and Accounts Receivable

On December 10, of a certain year, the Board of Directors of the Rosewood Corporation produced a list of shareholders who were going to receive a dividend of $1.35 per share. The company has 2 million shares outstanding. Based on this information, the journal entry for this announcement is:

No journal entry needed

The custodian of the petty cash fund for the Tororica Inn examined the $100 fund and found $10 in cash and the following vouchers: Taxi fare $15 Postage $29 Office supplies $18 Parking receipts $20 Freight charges $12 The journal entry for the replenishment of the fund is then:

Taxi Expense $15 Postage Expense $29 Office Supplies $18 Parking Receipts $20 Freight Expense $12 Cash Short and Over (Over) $ 4 Cash $90

A debt-service coverage ratio of 1.37 should be interpreted as:

The generated profit before interest, taxes, depreciation and amortization is more than sufficient to cover the company's oblications

The basic element used in an accounting system to classify and summarize business transactions is the:

account

The statement of cash flows is prepared according to the __________ basis of accounting

accrual

Which of the following classes of ratios focuses on managers' use of assets?

activity ratios

When a supplier's invoice indicates terms of 2/15, n/30, and it has just been delivered, the hospitality firm will have to pay full price if payment is not made:

after 15 days

The Creature from the Black Lagoon Resort shows you the following journal entry: Provision for Doubtful Accounts$7,500 Allowance for Doubtful Accounts$7,500 Based on this information, you can deduce that this journal entry is based on:

aging of accounts receivable and percentage of sales method

Which of the following kinds of accounts would appear in a general ledger?

all of the above

Cyril, a restaurant accountant, notices that there is a difference between the bank statement's balance and the balance in the restaurant records for the restaurant's account. All of the following are common causes for this difference except:

allowances made for doubtful accounts

Cash forecasting is an aspect of which of the following?

an integrated cash management system

A company that accounts transactions at the moment of receipt or payment of the money is following a

cash basis approach

Stockholders expect to receive a certain amount of money in return for their investments in corporations. When they come in the form of cash, these returns are called:

cash dividends

Which of the following would best be described as short-term, highly liquid investments?

cash equivalents

Earnings per share is a better indicator than net income only when the company is a

corporation or limited liability company

Earnings per share is calculated only for:

corporations

Which of the following types of business organization is more likely to enter into long-term contracts?

corporations

Which of the following ratios is often expressed as the number of times current assets could cover current debt?

current ratio

The date on which a list of stockholders is compiled so that dividend checks may be mailed to them is called the:

date of record

Which of the following ratios compares a business's liabilities with its net worth?

debt-equity ratio

A company has a cash inflow of $300,000 and a cash outflow of $400,000. Therefore, its cash flow has...

decreased by $100,000

To prepare a bank reconciliation, an accounting employee may have to perform any of the following except:

deduct interest earned from the balance per books

All of the following are considered current liabilities except:

deferred income taxes

Danny Default is the maker of a note to the Long-Stay Hotel for his stay there. On the note's maturity date, Danny has not paid the note. Now the note is called a:

dishonored note

The major disadvantage of the corporate form of business organization is:

double taxation

All of the following items are shown on the balance sheet of a hospitality company except:

employee training expenses

The generally accepted accounting principle of matching requires that:

expenses be matched with the revenues they generate

Rent, property taxes, and insurance are all independent of hotel occupancy rates; they vary only with the passage of time. For this reason, these expenses are called:

fixed charges

Some suppliers absorb the expenses involved in transporting goods to the buyer, but others who deliver will charge the buyer for freight costs. In freight terminology, FOB means:

free on board, which doesn't necessarily mean free freight

All of the following would be considered Cash or Cash Equivalents for accounting purposes except:

furniture and fixtures

Assuming a business will continue until the assets are fully utilized is in accordance with the _______ principle.

going concern

Simone computes the gross profit percentage on the basis of previous years' figures. The fact that she is determining this percentage in this way means she must be using the _____________ method of estimating ending inventory.

gross profit

Using the allowance method of accounting for bad debt expense _________ the carrying value of Accounts Receivable.

has no effect on

A certain reservationist receives a call and makes a reservation for one room night for a future hotel guest. The traveler uses a credit card to guarantee the reservation, but no amount is charged to the traveler's account. From an accounting standpoint, a sale ___________ and the event ____________.

has not been made; should not be recorded

FOB shipping point means that freight charges will be paid by the:

hospitality firm that ordered the shipment

The balance sheet of the Secret Maple Resort shows the value of the current assets (in thousands $) at $4,712 (2016); $3,127 (2015) $2,273 (2014). According to the dollar change method of calculation, the current assets for 2016 have

improved by $1,585

At the Seldon Inn, cash is deposited daily, employees use a voucher system, and cash-handling duties are segregated. These practices and policies are most likely in place to achieve:

internal control over assets

Once a firm establishes a petty cash fund, it has ____________ than it did before

less money in demand deposits

All of the following would typically be treated as revenue expenditures except the payment for a:

new hotel building

The process of preparing the Investing Activities section of a statement of cash flows involves a focus on:

noncurrent assets from the balance sheet

Using an invoice, rather than the seller's opinion of the value, to document the value of equipment, is based on the _______ principle.

objective evidence

Which of the following groups would be considered internal users of a company's income statement?

operation managers

The Expenses section of an income statement includes which of the following?

outflows related to the accounting period and expenses that were incurred in the process of producing revenue

The class of assets on the balance sheet that includes land, buildings, and furnishings that are in use is:

property and equipment

Which of the following would be included in the Investments category on the balance sheet?

property not currently used in operations

Accountants sometimes make mistakes in recording transactions. A prior period adjustment is shown on the:

statement of retained earnings

Which of the following is the simplest of the methods of depreciation?

straight-line method

Hospitality accounting staff members prepare a trial balance in order to:

test the equality of debits and credits

Hospitality managers are held responsible primarily for:

the profitability of the operation they manage

On which of the following financial statements would you expect to find a line item for correcting errors that were made in a previous financial statement?

the statement of retained earnings

T-accounts are so named because of:

their appearance

When a bill is due to be paid, an accounting employee pulls a voucher from the _______ file and prepares a __________ for the treasurer to sign

tickler; check

Common stock that was once issued by a corporation but later repurchased by the same corporation is called:

treasury stock

Common-size statements are most closely associated with which of the following elements of financial analysis?

vertical analysis

The aging of accounts receivable method is used to estimate bad debts at a certain firm. When accounting staff members total the estimated bad debts from the aging schedule, they have determined:

what should be the current balance in Allowance for Doubtful Accounts

Under accrual-based accounting, revenue is recognized

when revenues are earned

The balance sheet of the Sunrise Baron Hotel & Spa shows the value of the intangible assets (in thousands $) at $1,712 (2016); $1,127 (2015) $1,273 (2014). According to the relative change method of calculation, the intangible assets for 2015 have

worsened by 11.5%

Given: Cost of food used $ 26,050 Cost of employee meals $ 500 Promotional meals $ 300 Then, the cost of food sold is equal to:

$ 25,250

Given: Cost of Food Used $57,705 Cost of Employee Meals $732 Cost of Promotional Meals $432 Transfers to Beverage Department $50 Then, the Cost of food sold is equal to:

$ 56,491

Given that Available food = $ 59,060 Food Inventory, December 31, 20X3 = $ 1,450 Transfers coming from the beverage department = $ 95 Then, Cost of food used is equal to:

$ 57,705

Given that Food Inventory, January 1, 20X3 = $ 1,160 and Available food = $ 59,060 Then, the total amount of food purchased is equal to:

$ 57,900

You are provided with the following information from the Millennial Wine shop: Number of units Cost per unit Total cost Beginning inventory 35 $15.00 $525.00 January 15 purchase 40 $16.00 $640.00 March 6 purchase 30 $18.00 $540.00 May 22 purchase 45 $19.00 $855.00 July 10 purchase 50 $20.00 $1,000.00 December 31 purchase 35 $21.00 $735.00 Available for sale 235 $4,295.00 Units sold 175 Based on the information above, the ending inventory of wine bottles according to the weighted average method would be equal to:

$1,096.60

You are provided with the following information from the Millennial Wine shop: Number of units Cost per unit Total cost Beginning inventory 35 $15.00 $525.00 January 15 purchase 40 $16.00 $640.00 March 6 purchase 30 $18.00 $540.00 May 22 purchase 45 $19.00 $855.00 July 10 purchase 50 $20.00 $1,000.00 December 31 purchase 35 $21.00 $735.00 Available for sale 235 $4,295.00 Units sold 175 Furthermore, you know that the available stock at the end of the years consists of the following bottles: Stock January 15 15 Stock February 6 10 Stock February 22 20 Stock March 10 10 Stock March 31 5 Based on the information above, the ending inventory of wine bottles according to the specific identification method would be equal to:

$1,105

$1,235

The income statement, prepared according to the reporting form, shows a total sales of $7,500,500. The total profit is equal to $1,250,000. Therefore, the total cost here is:

$1,250,500

A balance sheet has a total debit side of $ 2,000,000. The total liabilities are $500,000. Therefore, the total Onwers' equity is:

$1,500,000

Sales of the Randolf Inn were $2,000,000 for 20X3. Accounts Receivable—Trade totaled $140,000 and $160,000 at the beginning and end of 20X3, respectively. What were the estimated cash receipts from sales for 20X3?

$1,980,000

Robert owns 50 shares of stock from a certain corporation. Each share is worth $3.00. After the corporation declares a two-for-one stock split, his shares are worth ________ each.

$1.50

$10,000

The Lagoon Adventure Resort plans to transport guests to its underwater facility in a submarine. The sub cost $250,000, has a salvage value of $10,000, and has an estimated useful life of 40,000 hours, or 5 years' use. During the first year of the sub's operation, it was used for 8,000 hours. Using the double declining balance method of depreciation, calculate the sub's depreciation for the first year.

$100,000

Given the following information, calculate the operating efficiency ratio: Rooms Revenue $646,000 Food & Beverage Revenue $200,000 Telecommunications Revenue $34,000 Total Undistributed Operating Expenses $313,000

0.64

A fixed asset is purchased at the beginning (January 1) of 2011. Information relating to the asset is as follows: Cost of acquisition$220,000 Residual Value estimated at the time of acquisition$20,000 Residual Value revised estimate on 1 January 2012Nil Useful Life estimated at the time of acquisition20 years Useful Life revised estimate on 1 January 201316 years Based on this information, the depreciation for 2013 will be equal to:

14,210.53

The Western Heirloom Hotel has and ADR of $125 and a REVPAR of $83.75. Based on this information, we can calculate that the occupancy rate of this hotel will be:

67.0%

The Chupacabra Resort has the following information from its balance sheet: Cash$600,000 Accounts receivable $75,000 Allowance for Doubtful Accounts $5,000 Inventory$125,000 At the same time, there is a write-off of $3,000 on the accounts receivable. Based on this information, the value of the accounts receivable BEFORE the write-off is equal to:

70,000

The balance sheet of the Ancient Basin Hotel shows the value of the total assets (in thousands $) at $1,712 (2016); $1,127 (2015); $1,273 (2014); $1,975 (2013). According to the trend percentage method of calculation, the total assets for 2016 are

87% below the base year

A Cash Short and Over for $5 credit

Which of the following events would be recorded as an accounting event?

A guest purchases a meal in a food outlet.

Your company purchased inventory from Dade Packing for $3,000, with the invoice indicating 2/10, n/30 According to the net method of recording purchases, if the company pays in time (within 10 days) this should be recorded as....

Accounts payable $2,940 Cash $2,940

Your company purchased inventory from Dade Packing for $3,000, with the invoice indicating 2/10, n/30. According to the net method of recording purchases, if the company pays in time (within 10 days) this should be recorded as....

Accounts payable $2,940 Cash $2,940

Princess Beach Hotel in Cancun has a client, Mr. Thomas, who owes them an amount of $1,750 for his stay at the hotel some seven months ago. The hotel decided to write-off this amount for bad debts, using the direct write-off method. However, after doing the journal entry for this write-off, the hotel miraculously received a check from Mr. Thomas for the amount owed (=$1,750). Based on this last development, the journal entry (or entries) would be:

Accounts receivable $1,750 Provision for Doubtful Account $1,750 Cash $1,750 Accounts receivable $1,750

Highway resort buys a luxury SUV for $100,000, depreciates $10,000 per year over the following 10 years. At that time, the SUV is fully depreciated, the resort gives it away. Based on this information, the resort has to produce the following journal entry of the disposal of the SUV:

Accumulated depreciation $100,000 Company cars $100,000

Petty cash is usually shown on the balance sheet as:

Cash

On January 11, of a certain year, the Western Jungle Corporation paid a dividend of $2.53 cash per share. The company has 2 million shares outstanding. Based on this information, the journal entry for this announcement is:

Dividends payable $5,060,000 Cash $5,060,000

All of the following are sections of the statement of cash flows except the:

Earning Activities section

Proceeds from the issuance of capital stock appear under which section of the statement of cash flows?

Financing Activities

If a company pays dividends, this will be included in the cash flow statement category of:

Financing activities

If a company issues bonds, this will be included in the cash flow statement category of:

Financing actvties

During a certain year, the Mama Mia restaurant Inc. issued 150,000 common stock with a par value of $5 for $30 per share. The cash flow section that will be affected by this transaction is:

Financing section for $4,500,000 inflow

Which of the following statements best summarizes the role of footnotes on a balance sheet?

Footnotes should explain balance sheet figures and help users interpret the balance sheet.

A liquidity ratio of 1.37 should be interpreted as follows:

For each $1 of current liabilities, the company has $1.37 in current assets

An operating cash flows to current liabilities ratio of 1.37 should be interpreted as follows:

For each $1 of current liabilities, the company has $1.37 in operating cash flow

A return on assets of 11% should be interpreted as:

For every $100 in assets $11 of profit is generated

A return on owners equity of 13% should be interpreted as:

For every $100 in owners' equity, $11 of profit is generated

Which of the following statements best describes the accounting principle of objective evidence?

It requires supporting documents for accounting transactions whenever possible

Talk of the Town Resort purchases two new cooking stoves for its kitchen at $2,499 each. In addition, the resort paid $750 for transportation, $500 for installation, $250 for inspection by city inspector, and $299.88 for sales tax. While transporting the equipment, the driver had to park in a disability parking space, and was not aware of a police office on the look close-by. This wrong parking resulted in a $250 fine that the delivery driver's employer offered to cover. The resort has 90 days to pay all the expenses related to the purchase of both stoves. Based on this information, the stoves will be activated according to the following journal entries:

Kitchen equipment $XXX Accounts payable $XXX

The beginning inventory of a certain item for the Frolicsome Resort was 10 units, which were purchased at $10 each. It purchased 5 units at $5 apiece, and later, 3 units at $10 apiece. The resort sold a total of 8 units during the current accounting period. Which of the following inventory valuation methods yields the highest ending inventory value for this inventory item?

LIFO

If a company has Notes Payable (2 years), this will be classified in the balance sheet under:

Long-term debt

A lodging business sells one of its luxury SUVs for $ 6,000. This car was bought 3 years ago for $30,000. The depreciation is $7,500 per year. Based on this, the lodging business has made a:

Loss of $ 1,500

If a company pays interest on a mortgage loan, this will be included in the cash flow statement category of:

Operating activites

If a company purchases inventory, this will be included in the cash flow statement categroy of:

Operating activities

The depreciation expense from the income statement of the Copa Cabana Resort showed an amount of $275,000. The cash flow section that will be affected by this result is:

Operating section for +$275,000

If a company has restricted cash in its balance sheet, this will be classified under:

Other assets

You are provided with the following information on Tapioca Resort Inn: Beginning inventory $40,000 Purchases $30,000 Ending inventory $55,000 Employee meals $1,000 Transfer to Food & Beverage Department $1,500 The goods are sold for $30,000. However, upon a deeper inspection, you noticed that your beginning inventory should have been $45,000 instead of $40,000. Based on the available information, you calculate that the profit for this hotel was:

Overestimated by $5,000

A company X wants to increase the amount of its petty cash fund from $200 to $250. The journal entry for this increase is....

Petty cash $50 Cash $50

Balance sheet accounts in the general ledger are also called

Real accounts

Your company just received its bank statement, which indicates that the balance is $5,250. The cash balance in your books is, however, $4,950. You know as well that there is an outstanding check #2401 for $300 that explains the difference. To reconcile the bank statement with the cash balance in your books, you should...

Reduce the bank statement with $300

Statement I: Assets are the things that a company owns or is owed. Statement II: Liquid assets are either cash or difficult to turn into cash.

Statement 1 is correct; statement 2 is incorrect

Statement I: Accounting is a process of identifying, measuring and communicating non-economic information that will allow for informed judgements and decisions by the users. Statement II: Accounting is bookkeeping + summarizing + interpreting.

Statement 1 is incorrect; statement 2 is correct

Statement I: The total assets under the T-account balance sheet form differ from the total assets under the reporting form balance sheet. Statement II: The total assets under the T-account balance sheet form are equal to the total liabilities & owners' equity under the reporting form balance sheet.

Statement 1 is incorrect; statement 2 is correct

If a company has a "Deferred income taxes" account on the credit side of its balance sheet, this means that

The company has actually higher depreciation than the IRS would allow

The Frankenstein Hotel provides you with the following journal entry: Provision for Doubtful accounts $2,000 Accounts receivable $2,000 Based on this information, you can deduce that this journal entry is based on

The direct write-off method

If the occupancy% of a resort is equal to the paid occupancy%, then this means that:

There are no complimentary rooms provided by the resort

Asset turnover is determined by dividing _________ by ____________.

Total Revenue; Average Total Assets

The Uniform System of Accounts for the Lodging Industry, in its tenth revised edition, could be described as any of the following except:

a set of tables that indicate how much net income a property can expect to earn each year

You are provided with the following information on Tapioca Resort Inn: Beginning inventory $40,000 Purchases $30,000 Ending inventory $55,000 Employee meals $1,000 Transfer to Food & Beverage Department $1,500 The goods are sold for $30,000. However, upon a deeper inspection, you noticed that your beginning inventory should have been $35,000 instead of $40,000. Based on the available information, you calculate that the profit for this hotel was:

Underestimated by $5,000

You are provided with the following information on Tapioca Resort Inn: Beginning inventory $40,000 Purchases $30,000 Ending inventory $55,000 Employee meals $1,000 Transfer to Food & Beverage Department $1,500 The goods are sold for $30,000. However, upon a deeper inspection, you noticed that your ending inventory should have been $57,000 instead of $55,000. Based on the available information, you calculate that the profit for this hotel was:

Understated by $2,000

Extraordinary items are...

Unusual of nature and occur infrequently

When corporations account for their taxes, they estimate their taxes quarterly and accrue them for payment. In such a transaction, the account Income Tax Expense receives:

a debit

Tina has purchased the right to do business as a hotelier with her building, land, and equipment for the coming year. The party that granted her this right also let her use its brand name. Tina has purchased:

a franchise

If a batch of linens is expected to have a useful life of less than one year, it should be recorded as a(n):

current asset

Which of the following financial reports most completely reflects the financial position of a business at a given point in time?

balance sheet

Which of the following financial statements would show how quickly a hospitality operation could convert assets into cash?

balance sheet

Among current assets, the category Cash includes all of the following except:

bank accounts with restricted use

Keeping records for a business separate from the owner's personal affairs is in keeping with the _______ principle

business entity

The branch of accounting that involves reviewing and evaluating documents, records, and control systems is called:

auditing

The Norumbega Villa Resort sold investments that originally cost it $300,000 for $200,000. How would this transaction affect the Investing Activities section of its statement of cash flows?

as a $200,000 cash inflow

Jerry accepts a formal, written promise from an employee of his hotel to pay a certain sum. The employee plans to repay the hotel within the current fiscal year, and states this intention in the note. Notes Receivable are classified as:

assets

Revenue from cash sales ultimately affects which two balance sheet accounts?

assets and owner's equity

Which of the following generally accepted accounting principles is the reason accountants calculate the lower of cost or market (LCM)?

conservatism principle

The upward valuation of land subsequent to its purchase violates the _______ principle.

cost

When a piece of property or equipment is purchased, it is generally recorded at its __________ value

cost

Inventory value is used to calculate _____________, which in turn is used to calculate gross profit

cost of goods sold

The Wayside Hotel uses the direct write-off method of accounting for bad debts. If the general manager of the hotel determines that a $700 debt is uncollectible and the current balance of Provision for Doubtful Accounts is $100, the journal entry to recognize this bad debt would involve:

crediting Accounts Receivable for $700

A company that has either an account receivable or a note receivable on its books is called a:

creditor

Sara totals the credits and debits for a certain account and finds that the account carries a debit balance. All of the following types of accounts typically carry a debit balance except:

liability accounts

Stormin' Norman's Resort sold two golf carts for a total of $1,000 in order to raise cash. The resort's managers had originally bought the carts for a total of $6,000. The accumulated depreciation on both carts was $4,000. The resort's managers will have to record a _______ of _______ on the sale of these carts.

loss; $1,000

Which of the following procedures involves transferring amounts recorded in the general journal to ledger accounts?

posting

Which of the following types of stock is typically both callable and cumulative?

preferred

All of the following are balance sheet accounts except:

revenue accounts

Regardless of the size of an operation's accounting department, the diversity of its responsibilities, or the number and types of reports produced, the accounting staff is responsible for providing:

service

Cecil, the general manager of a hotel, picks up a balance sheet from the end of the previous fiscal year, which ended December 31. He is gathering information to prove to creditors that the hotel is able to pay its debts. If the current date is July 14:

the balance sheet is too outdated to be helpful

Abu has selected five consecutive financial periods to use in calculating trend percentages. He should assign 100 percent to each amount of which of the periods?

Financial accounting final

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