financial accounting

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The allocation of a plant​ asset's cost over its useful life is called​ ________.

depreciation

Which of the following groups of accounts will decrease with a​ debit?

liabilities and​ stockholders' equity

Which of the following items should be​ amortized?

patents, copyrights, trademarks

The par value of stock is​

the amount assigned by a company to a share of its stock

Which of the following accounts would appear in the income statement credit​ column?

service revenue

The amount of net income is transferred from​ ________ to​ ________

the income​ statement; the statement of retained earnings

Which of the following is a reason why many companies require a photo ID when employees pick up their​ paychecks?

to avoid writing a paycheck to a fictitious person

Where does unearned revenue to be earned in six months appear on the balance​ sheet?

under current liabilities

Which method results in a higher cost of goods​ sold

LIFO

he inventory costing method that expenses out the newer purchases of goods is​ the:

LIFO

A company sold merchandise for​ $1,000 on account with terms of​ 2/10, n/30. The company uses a perpetual inventory system. Defective merchandise of​ $200 was returned 2 days later. If the payment was received after 20​ days, the journal entry to record the cash receipt will include​

a debit to Cash for​ $800 and a credit to Accounts Receivable for​ $800.

Which of the following users would rely on management accounting information for decision−making ​purposes?

company managers

On October​ 1, 2015, Android Inc. made a loan to one of its customers. The customer signed a 4minus−month note for​ $100,000 at​ 15%. Calculate the total interest earned on the note.

$5,000

Which of the following is an expense resulting from the decline in the utility of a natural​ resource?

depletion

Which of the following is considered a fiscal​ year?

12 months

Following is a list of account balances of Wilson Mowing Services as of December 31 of the first year of​ operation: Accounts receivable ​$ 5,000 Accounts payable ​4,000 Salary expense ​5,000 Repairs expense ​1,000 Truck ​10,000 Equipment ​8,000 Notes payable ​8,200 Cash ​7,500 Supplies expense ​1,600 Service revenue ​32,000 Gasoline expense ​3,800 Salary payable 200

12,400

The balances of select accounts of Sandra Inc. as of December​ 31, 2015 are given​ below: Notes Payablelong dash—short term ​$1,200 Salaries Payable ​4,000 Notes Payablelong dash—long term ​25,000 Accounts Payable ​3,200 Unearned Revenue ​2,000 Interest Payable ​2,500 The unearned revenue is the amount of cash received for services to be rendered in​ January, 2016. What are the total current liabilities shown on the balance​ sheet?

12900

Sunlight Company has assets and equity that amount to​ $270,000 and​ $90,000, respectively. Liabilities will b

180,000

On January​ 1, 2015, Anodel Inc. acquired a machine for​ $1,000,000. The estimated useful life of the asset is 5 years. Residual value at the end of 5 years is estimated to be​ $50,000. Calculate the depreciation expense per year using the straight−line method.

190000

Rubal Inc. earned revenue of​ $400,000 and incurred cost of goods sold of​ $320,000. Calculate the gross profit percent.

20%

The balance in the Bonds Payable Account is a credit of​ $68,000. The balance in the Premium on Bonds Payable Account is a credit of​ $900. How much is the bond carrying​ amount?

68900

The following are the current​ month's balances for Toys Galore Inc. Accounts Payable ​$ 8,000 Revenue ​10,000 Cash ​5,000 Expenses ​1,750 Furniture ​12,000 Accounts Receivable ​14,000 Common Stock ​8,250 Notes Payable ​6,500 What is the net income for Toys Galore Inc. for the current​ month?

8250

Refer to the following list of liability balances at December​ 31, 2015. Accounts Payable ​$ 13,000 Employee Health Insurance Payable 450 Employee Income Tax Payable 400 Estimated Warranty Payable 600 Longminus−Term Notes​ Payable(Due 2019) ​33,000 FICAlong dash—OASDI Taxes Payable 560 Sales Tax Payable 370 Mortgage​ Payable(Due 2020) ​6,000 Bonds​ Payable(Due 2021) ​53,000 Current Portion of Longminus−Term Notes Payable ​3,500 What is the total amount of longminus−term ​liabilities?

92000

Which of the following statements is true of accrual basis​ accounting?

Accrual basis accounting is required by Generally Accepted Accounting Principles​ (GAAP).

Which of the following is the correct accounting​ equation?

Assets​ = Liabilities​ + Equity

On March​ 1, 2015, Vantage Services issued a​ 5% long−term notes payable for​ $15,000. It is payable over a 3minus−year term in​ $5,000 principal installments on March 1 of each​ year, beginning March​ 1, 2016. Which of the following entries needs to be made at March​ 1, 2015?

Cash​15,000 Long−Term Notes Payable​15,000

A company that uses the perpetual inventory system sold goods to a customer for cash for​ $3,000. The cost of the goods sold was​ $1,000. Which of the following journal entries correctly records this​ transaction?

Cash​3,000 Sales Revenue​3,000 Cost of Goods Sold​1,000 Merchandise Inventory​1,000

The maturity date for a six−month note issued on January 15 would be​

July 15

A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as

Electronic Data Interchange

It is mandatory for both the employer and employee to pay​

FICA

Which method results in a higher cost of ending merchandise​ inventory?

FIFO

Which method results in a higher gross​ profit?

FIFO

The _________ method will result in the highest net income because under this​ method, company's gross profit is the ___________

FIFO, highest

Under which of the following terms will the buyer be required to pay transportation​ costs?

FOB shipping point

The ________ method will result in the lowest income taxes because under this​ method, company's gross profit is the ____________

LIFO, lowest

Which of the following is included in the internal control procedure​ documents?

The invoices and orders must be pre-numbered

Which of the following statements is true of a sole​ proprietorship?

The sole proprietor is personally liable for the liabilities of the business.

The inventory costing method that averages cost changes is​ the

Weighted-average method

A petty cash fund was established with a​ $350 balance. It currently has cash of​ $41 and petty cash tickets totaling​ $309. Which of the following would be included in the entry to replenish the​ fund?

a debit to various expenses for​ $309

Which of the following is a liability​ account?

accounts payable

The bank recorded a​ $3,000 deposit as​ $300. How would this information be included on the bank​ reconciliation?

addition to bank side

Financial statements are prepared from the balances in​ a(n) ________.

adjusted trial balance

Which of the following accounts increases with a​ credit?

common stock

Which of the following accounts will be included in a post−closing trial​ balance?

common stock

Adjusting journal entries are prepared​

after preparing the unadjusted trial balance

Prior period adjustments​

are shown on the statement of retained earnings as corrections to the beginning balance

Which of the following is used by both internal and external users to the​ company?

balance sheet

Which of the following occurs when a stockholder invests cash in a corporation in exchange for​ stock?

both assets and​ stockholders' equity are increased

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​

closing entries

In a large​ company, the person who is responsible for comparing cash and the bank balance is the

controller

Lorna Smith decided to start her own CPA practice as a professional​ corporation, Smith CPA PC. Her corporation purchased an office building for​ $35,000 that her real estate agent said was worth​ $50,000 in the current market. The corporation records the building as a​ $50,000 asset because Lorna believes that is the real value of the building. Which of the following concepts or principles of accounting is being​ violated?

cost principle

On November​ 1, 2015, Oster Inc. declared a dividend of​ $3.00 per share. Oster Inc. has​ 20,000 shares of common stock outstanding and no preferred stock. Which of the following is the journal entry needed to record the declaration of​ dividends?

debit Retained Earnings​ $60,000 and credit Dividends Payable—Common ​$60,000

The​ owners' claim to the assets of the business is called​

equity

The field of accounting that focuses on providing information for external decision makers is

financial accounting

Corel Sales sold its old office furniture for​ $5,000. Its original cost was​ $10,000 and at the time of​ sale, it had accumulated depreciation of​ $7,000. What was the effect of the​ transaction?

gain of 2000

The term​ "inventory," for a​ merchandiser, refers to

goods held for sale to customers

On a multi−step income​ statement, the operating expenses are subtracted from​ ________ to arrive at operating income.

gross profit

Which of the following is the correct order of preparation of financial​ statements?

income statement right arrow→ statement of retained earnings right arrow→ balance sheet right arrow→ statement of cash flows

Which of the following is included in the category of other​ receivables?

interest receivable

Which of the following asset categories would include the cost of clearing land and removing unwanted​ buildings?

land

After initially recording a​ transaction, the data is then transferred to the​ ________.

ledger

A company decides to ignore a very small error in their inventory balance. This is an example of application of the

materiality concept

Which of the following assets must be reported at the lower−of−cost-or−market ​value?

merchandise inventory

When a bond is sold at a price higher than the face​ value, the difference is known as a​

premium

Which of the following values remains the same irrespective of the inventory valuation method used by a​ company? Assume the cost of inventory is rising.

purchases

________ represents a debt owed for renting a building currently.

rent payable

The Income Summary account has a credit balance of​ $25,000 after the revenue and expense accounts have been closed. Which of the following is to be credited to close the Income Summary​ account?

retained earnings

Which of the following is a source document that provides the evidence and data for accounting​ transactions?

sales invoice

Which of the following is a liability​ account?

unearned revenue

Which of the following is an example of an estimable probable​ contingency?

warranty payable

A bond is issued at premium​

when a​ bond's stated interest rate is higher than the market interest rate

The expense for warranty costs is recorded in the period​

when the product is sold

Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for​ $11.50 per share. Common​ stock, $5​ par, 190,000 shares​ authorized, 140,000 shares issued ​$700,000 Paid−In Capital in Excess of Par—Common ​120,000 Retained earnings ​290,000 Total​ stockholders' equity ​$1,110,000 After a 2 for 1 stock​ split, what would be the number of issued​ shares?

​280,000


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