HM 235 Final Questions
Accounts Receivable had a normal starting balance of $4,500. There were debit postings of $1,800 and credit postings of $1,600 during the month. The ending balance of the account is: A: $4,700 debit. B: $4,300 debit. C: $4,300 credit. D: $4,700 credit.
A: $4,700 debit.
Accounts Payable had a normal starting balance of $500. There were debit postings of $200 and credit postings of $100 during the month. The ending balance is: A: $400 credit. B: $400 debit. C: $800 credit. D: $800 debit.
A: $400 credit.
Carmen's Restaurant Net Income was $45,000 and Depreciation Expense was $5,000. Other accounts that changed: Accounts Receivable increased by $14,000; Inventory decreased by $20,000; Accounts Payable increased by $8,000; and Salaries Payable decreased by $3,000. The amount of Net Cash Flow from Operating Activities is: A: $61,000. B: $33,000. C: $47,000. D: $45,000.
A: $61,000.
The May bank statement for legal services shows a balance of $6,000, but the book balance shows a cash balance of $7,680. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30 3. Checks outstanding totaled $260 4. Bank service charges were $50 5. Deposits in transit were $2,140 The adjusted cash balance at the end of May should be: A: $7,880 B: $7,150 C: $7,620 D: $9,810
A: $7,880
An account that would be increased by a credit is: A: Accounts Payable. B: Cash. C: Prepaid Expense. D: Utilities Expense.
A: Accounts Payable.
Which of the following groups of accounts have a normal debit balance? A: Assets, expenses, and withdrawals B: Assets, capital, and withdrawals C: Revenue, liabilities, and capital D: Liabilities, expenses, and assets
A: Assets, expenses, and withdrawals
Accumulated Depreciation is found on which of the following financial statements? A: Balance sheet B: Statement of Owner's Equity C: Income statement D: All of these answers are correct.
A: Balance sheet
Which of the following items are on both the income statement and the statement of owner's equity? A: Net Income B: Additional owner's investments C: Capital D: Owner's withdrawals
A: Net Income
The May bank statement for Consulting Services shows a balance of $7300, but the balance per books shows a cash balance of $8,980. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20. 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30. 3. Checks outstanding totaled $260. 4. Bank service charges were $50. 5. Deposits in transit were $2,140. Which item should be subtracted from bank balance during the bank reconciliation? A: Outstanding check B: Note collected by the bank C: Deposit in transit D: Bank service charge
A: Outstanding check
Which of the following accounts would NOT appear on the Balance Sheet? A: Rent Expense B: Accumulated Depreciation C: Cash D: Equipment
A: Rent Expense
Which of the following items is NOT listed on the balance sheet? A: Revenue B: Equipment C: Accounts Payable D: Accounts Receivable
A: Revenue
Collins Restaurants reported $3,650,000 in Sales for 2018 and $3,345,000 for 2017. Controllable Earnings for 2018 were $1,355,000 and $1,215,000 for 2017. Using the Industry Rules from class, which of the following is correct? A: Rule #1 was met B: Rule #2 was met C: Both Rules were met D: Neither Rule was met
A: Rule #1 was met
The employer records deductions from the employee's paycheck: A: as credits to liability accounts until paid. B: as debits to expense accounts. C: as credits to capital accounts. D: as debits to asset accounts until paid.
A: as credits to liability accounts until paid.
Expenditures for changing oil in a machine or a car would be: A: charged to an expense account B: added as a betterment C: added to the cost of the asset D: added as a capital expenditure
A: charged to an expense account
The entry to record the disposal of a laptop computer with an original cost of $2,500 with accumulated depreciation of $1,500 for $500 in cash would be: A: debit Accumulated Depreciation $1,500; debit Cash $500; debit Loss on Disposal of an Asset $500; credit Equipment $2,500. B: debit Cash $2,500; credit Equipment $2,500. C: debit Depreciation Expense $2,500; credit Equipment $2,500. D: debit Equipment $2,500; credit Accumulated Depreciation $1,500; credit Loss on Disposal of an Asset $500; Credit Cash $500.
A: debit Accumulated Depreciation $1,500; debit Cash $500; debit Loss on Disposal of an Asset $500; credit Equipment $2,500.
Greetings Online disposed of a van for $4,000 with an original cost of $22,000 with accumulated depreciation of $15,000. The journal entry would include a: A: debit to Loss on Disposal of Plant Asset $3,000 B: debit to Van $22,000 C: credit to Accumulated Depreciation $15,000 D: All of these answers are correct
A: debit to Loss on Disposal of Plant Asset $3,000
Sam's catering made a payment via check for $64 but it is incorrectly recorded on the books as $46. The $18 error should be shown on the bank reconciliation as: A: deducted from the balance per books. B: added to the balance per bank statement. C: added to the balance per books. D: deducted from the balance per bank statement.
A: deducted from the balance per books.
The account for Payroll Tax Expense includes all of the following except: A: federal income tax B: federal unemployment taxes C: state unemployment taxes D: FICA taxes (OASDI and Medicare) paid by the employer for the latest payroll period.
A: federal income tax
The number of allowances claimed by an employee determines how much will be withheld from their paycheck for: A: federal income tax. B: FICA-OASDI. C: FICA-Medicare. D: both A and B are correct.
A: federal income tax.
Net income or net loss is calculated on the: A: income statement. B: balance sheet. C: statement of owner's equity. D: None of these
A: income statement.
Net income or net loss is calculated on the: A: income statement. B: statement of owner's equity. C: balance sheet. D: None of these
A: income statement.
If beginning capital was $150,000, ending capital is $180,000, and the owner's withdrawals were $15,000, the amount of net income or net loss was: A: net income of $45,000. B: net loss of $25,000. C: net loss of $45,000. D: net income of $25,000.
A: net income of $45,000.
As Withdrawals increase: A: owner's equity decreases. B: Cash increases. C: owner's equity increases. D: expense increases.
A: owner's equity decreases.
A transaction completed by Norton Company caused a $4,000 increase in both the total assets and the total liabilities. This transaction could have been: A: purchase of office equipment for $12,000, paying $8,000 cash, with the rest on account. B: purchase of office equipment, paying $4,000 cash, and $8,000 on account. C: investment by the owner of an additional $4,000. D: a loan of $5,000, on a $9,000 purchase of equipment with $4,000 down payment.
A: purchase of office equipment for $12,000, paying $8,000 cash, with the rest on account.
If management wishes to measure how effectively the assets were used in generating a profit, they could use the: A: return on assets. B: return on sales. C: rate of return on common stockholders' equity. D: times interest earned.
A: return on assets.
An outflow of cash from investing activities would be: A: the purchase of plant property and equipment. B: the sale of investment in equity securities of investment in equity securities. C: interest received on loans. D: the issuance of stock.
A: the purchase of plant property and equipment.
Strawberry Supreme purchased new baking equipment for $17,000 subject to a discount of 3%. The discount was taken. Additional costs included sales tax $700, installation of $500 and insurance for the first year of $1,000. The total cost to be added to the equipment account is: A: $17,000 B: $17,690 C: $18,200 D: $18,690
B: $17,690
At the end of 2018, Net Income on the income statement for the Badger Inn was $75,000 while Net Income for 2017 was $100,000. The year-over-year decrease for net income was: A: $25,000 and 33.3% B: $25,000 and 25% C: $25,000 and 125% D: $25,000 and 133.3%
B: $25,000 and 25%
Calculate, from the following information accumulated by Bob Clark, the adjusted book cash balance at the end of April. Bank statement ending cash balance: $3,000 General ledger cash balance ending: 4,250 Bank monthly service charge: 45 Deposits in transit: 2,500 Outstanding checks: 1,500 NSF check returned with bank statement: 205 A: $4,205 B: $4,000 C: $4,250 D: $5,500
B: $4,000
Dave Brown's cumulative earnings are $127,200, and his gross pay for the week is $5,300. If the FICA rates are: Social Security 6.2% and Medicare is 1.45%, what are his FICA-OASDI and FICA-Medicare taxes for the week? Assume the Social Security threshhold is $128,400. A: $328.60; $76.85 B: $74.40; $76.85 C: $0; $76.85 D: $74.40; $17.40
B: $74.40; $76.85
Net income was $45,000 in 2017 and $60,000 in 2018. The percentage increase or decrease in net income was: A: (33.33%) B: 33.33% C: (25%) D: 25%
B: 33.33%
In the statement of cash flows, which of the following would be an addition to net income? A: A decrease in Accounts Payable B: A decrease in Prepaid Insurance C: An increase in Accounts Receivable D: An increase in Inventory
B: A decrease in Prepaid Insurance
During the month of October, Ford advertised on the Internet. Ford received the bill for $600 in October, but waited until November to pay the advertising expense. The journal entry to record the payment in November is: A: Advertising Expense, debit; Cash, credit B: Accounts Payable, debit; Cash, credit C: Advertising Expense, debit; Accounts Payable, credit D: The journal entry is not made in November.
B: Accounts Payable, debit; Cash, credit
A check deposited for $646 is incorrectly accounted for as $464. The error should be shown on the bank reconciliation as: A: Added to the balance per bank statement B: Added to the balance per books C: Deducted from the balance per books D: Deducted from the balance per bank statement
B: Added to the balance per books
On July 10, a customer of Delight's Restaurant paid the restaurant $500 as a partial payment toward a catering event held in June. The journal entry on July 10th to record this transaction is: A: Credit Cash; Debit Revenue B: Debit Cash; Credit Accounts Receivable C: Debit Cash; Credit Revenue D: Debit Accounts Receivable; Credit Cash
B: Debit Cash; Credit Accounts Receivable
Both employees and employers pay which of the following taxes? A: Worker's Compensation B: FICA taxes (OASDI and Medicare) C: Federal income tax D: FUTA tax
B: FICA taxes (OASDI and Medicare)
Happy Valley Catering prepaid rent of $36,000 on January 1, 2019 for the following year. The Journal Entry for rent for each month during 2018 would be: A: Prepaid Rent, debit $36,000; Rent Expense, credit $36,000 B: Prepaid Rent, credit $3,000; Rent Expense, debit $3,000 C: Prepaid Rent, debit $3,000; Rent Expense, credit $3,000 D: Prepaid Rent, credit $36,000; Rent Expense debit $36,000
B: Prepaid Rent, credit $3,000; Rent Expense, debit $3,000
Which of the following ratios helps evaluate how well a company is earning profit for the common stockholders? A: Return on total assets B: Return on stockholders' equity C: Times interest earned ratio D: Profit Margin
B: Return on stockholders' equity
The employer's total FICA, SUTA, and FUTA tax is accounted for as: A: a credit to Accounts Payable B: a debit to Payroll Tax Expense C: a debit to Payroll Tax Payable D: a credit to Payroll Tax Expense
B: a debit to Payroll Tax Expense
If a company's revenues are higher than its expenses, it will cause: A: a decrease in owner's equity. B: an increase in owner's equity. C: an increase in assets. D: no effect on owner's equity.
B: an increase in owner's equity.
You meant to debit an asset account but posted it to an expense account by mistake. This would cause: A: assets to be higher than they should be. B: assets to be lower than they should be. C: owner's equity to be higher than they should be. D: expenses to be lower than they should be.
B: assets to be lower than they should be.
If Prepaid Rent Expense for the period is NOT adjusted: A: assets will be understated and expenses will be overstated. B: assets will be overstated and expenses will be understated. C: revenue will be understated and expenses will be understated. D: assets will be overstated and expenses will be overstated.
B: assets will be overstated and expenses will be understated.
If the balance of food inventory at the start of the month was $24,700 and at the end of the month you had $21,500 on hand, the adjusting entries for Food Inventory/Food Expense would be: A: debit to Food Inventory for $3,200; credit to Food Expense for $3,200 B: credit to Food Inventory for $3,200; debit to Food Expense for $3,200 C: credit to Food Inventory for $21,500; debit to Food Expense for $21,500 D: debit to Food Inventory for $21,500; credit to Food Expense for $21,500
B: credit to Food Inventory for $3,200; debit to Food Expense for $3,200
The correct journal entry to record the payment of FUTA to the Federal Government is to: A: debit FUTA Expense; credit Cash. B: debit FUTA Payable; credit Cash. C: debit Cash; credit FUTA Expense. D: debit Cash; credit FUTA Payable.
B: debit FUTA Payable; credit Cash.
A debit to a liability account was posted to an expense account. This would cause: A: expenses to be understated. B: liabilities to be overstated. C: assets to be overstated. D: owner's equity to be overstated.
B: liabilities to be overstated.
A dishwasher that originally cost $5,000 has no estimated salvage value and was depreciated over 5 years (straight-line depreciation). At the end of the second year, it was sold for $2,500 cash. The transaction would result in a: A: loss of $250 B: loss of $500 C: gain of $500 D: gain of $250
B: loss of $500
If Accounts Receivable has been credited, it is most likely that: A: the company made a purchase on account. B: the company collected a payment from a customer. C: the company made a payment on account. D: None of these is possible.
B: the company collected a payment from a customer.
The depreciation of equipment will require an adjustment that results in: A: total assets increasing and total expenses increasing. B: total assets decreasing and total expenses increasing. C: total assets increasing and total expenses decreasing. D: total assets and revenue decreasing.
B: total assets decreasing and total expenses increasing.
If the employee has $800 withheld from their check for federal income tax, what is the amount that the employer would need to pay for their portion of the federal income tax? A: $100 B: $800 C: $0 D: $400
C: $0
Robert purchased a truck for $60,000 with a life expectancy of 5 years; using straight-line depreciation, the amount of the depreciation adjustment for each month would be: A: $800. B: $12,000. C: $1,000. D: $4,000.
C: $1,000.
An employee has gross earnings of $1,200 with withholdings of 6.2% FICA-OASDI, 1.45% FICA-Medicare, $50 for federal income tax and $10 for state income tax. How much is the net pay? A: $791.15 B: $781.15 C: $1,048.20 D: $900.00
C: $1,048.20
Determine the adjusted bank balance for Sam's Packaging on November 30, from the following information: Cash balance on the bank statement: $3,350 Customer's check returned - NSF: 500 Customer's note collected by the bank: 600 Deposits in transit, November 30: 1,400 Outstanding checks, November 30: 3,650 A: $1,350 B: $1,550 C: $1,100 D: $1,250
C: $1,100
Harvest Moon Company has total assets of $20,000. If $2,000 cash is used to purchase a new computer, the total assets would be: A: $18,000. B: $22,000. C: $20,000. D: $2,000.
C: $20,000.
If total assets are $50,000 and total liabilities are $22,000, Capital must equal: A: $8,000. B: $20,000. C: $28,000. D: $18,000.
C: $28,000.
Bob Love earned $126,400 prior to the payroll period ending June 15. For the current payroll, Bob Love earned $5,000 and has the following deductions: FICA-OASDI (with a limit of $128,400), FICA-Medicare; federal income tax of $300; and state income tax $40. What is his net pay? A: $3,400 B: $4,277.50 C: $4,463.50 D: $5,000
C: $4,463.50
Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $400; total coins and currency $404. The summary journal entry to record the day's transactions would include a: A: $400 debit to Cash; $4 debit to Cash Short and Over, and $404 credit to Service Revenue B: $400 debit to Cash and $400 credit to Service Revenue C: $404 debit to Cash; $4 credit to Cash Short and Over; and $400 credit to Service Revenue D: $404 debit to Cash and $404 credit to Service Revenue
C: $404 debit to Cash; $4 credit to Cash Short and Over; and $400 credit to Service Revenue
What would the book value be at the end of year 6 for a piece of equipment using the straight-line method when cost is $11,000, residual value is $1,000, and the expected life is 10 years? A: $4,000 B: $3,000 C: $5,000 D: $4,400
C: $5,000
Iconic Brands has a beginning Accounts Receivable balance of $225,000 and an ending balance of $175,000. Net credit sales are $400,000 for the month of June (30 Days). The company's average collection period or Days Sales Outstanding is: A: 32.6 days. B: 20 days. C: 15 days. D: None of the above.
C: 15 days.
How does the purchase of supplies on account affect the accounting equation? A: Liabilities increase; owner's equity decreases B: Assets increase; liabilities decrease C: Assets increase; liabilities increase D: Assets increase; owner's equity increases
C: Assets increase; liabilities increase
During the month of January, Katelyn invested $9,000 in starting her legal practice. The proper journal entry would be: A: Cash, debit $9,000; Revenue, credit $9,000 B: Katelyn's Capital, debit $9,000; Cash, credit $9,000 C: Cash, debit $9,000; Katelyn, Capital, credit $9,000 D: Accounts Payable, debit $9,000; Cash, credit $9,000
C: Cash, debit $9,000; Katelyn, Capital, credit $9,000
You started the month with $100 in petty cash fund and at the end of the month you have cash of $20 and valid receipts for food expenses of $40. The entry to replenish the fund would be: A: Debit Cash $40, Credit Food Expense $40 B: Debit Food Expense $40; Credit Cash $40 C: Debit Food Expense $40; Debit Over/Short $40; Credit Cash $80 D: Debit Food Expense $40; Credit Over/Short $40; Credit Cash $40
C: Debit Food Expense $40; Debit Over/Short $40; Credit Cash $80
The entry to record the payment of office salaries would be: A: Debit Cash; Credit Salaries Expense B: Debit Salaries Expense; Credit Accounts Payable C: Debit Salaries Expense; Credit Cash D: Debit Cash; Credit Accounts Receivable
C: Debit Salaries Expense; Credit Cash
Food Cost on the P&L, as a percentage of sales, was 27.9% for 2018 and 28.6% for 2017. Which of the following statements is correct? A: Food Cost increased at a faster rate (%) than sales B: Food Cost increased at the same rate (%) as sales C: Food Cost increased at a slower rate (%) than sales D: You cannot determine with the information provided.
C: Food Cost increased at a slower rate (%) than sales
What type of an account is Wages and Salaries Payable? A: Expense B: Revenue C: Liability D: Asset
C: Liability
Collins Restaurants reported $5,150,000 in Sales for 2018 and $4,875,000 for 2017. Controllable Earnings for 2018 were $1,575,000 and $1,475,000 for 2017. Using the Industry Rules discussed in class, which of the following is correct? A: Rule #2 was met. B: Neither Rule was met C: Rule #1 was met D: Both Rules were met
C: Rule #1 was met
The beginning balance in the Capital account would appear on which financial statement? A: Income Statement B: Balance Sheet C: Statement of Owner's Equity D: None of these answers is correct.
C: Statement of Owner's Equity
Which of the following transactions would cause an asset to decrease and the owner's equity to decrease? A: The business bought supplies on account. B: The business incurred an expense on credit. C: The owner withdrew cash from the business. D: The owner invested cash in the business.
C: The owner withdrew cash from the business.
The bank statement included bank charges. On the bank reconciliation, this item is: A: an addition to the balance per bank statement. B: a deduction from the balance per bank statement. C: a deduction from the balance per company books. D: an addition to the balance per company books.
C: a deduction from the balance per company books.
The business provided services to a credit customer. To record this: A: an expense is debited and Capital is credited. B: an asset is debited and a liability is credited. C: an asset is debited and revenue is credited. D: None of these is correct.
C: an asset is debited and revenue is credited.
If the Prepaid Insurance account is NOT adjusted: A: assets will be understated and expenses will be understated. B: assets will be overstated and expenses will be overstated. C: assets will be overstated and expenses will be understated. D: assets will be understated and expenses will be overstated.
C: assets will be overstated and expenses will be understated.
A $100 petty cash fund has cash of $20 and valid receipts for $40. The entry to replenish the fund would include a: A: credit to Over/Short for $40. B: credit to Cash for $40. C: debit to Over/Short for $40. D: debit to Cash for $40.
C: debit to Over/Short for $40.
Mark paid $500 cash to partially reduce the amount owed for equipment that was previously bought on account. This transaction would: A: decrease assets and increase liabilities. B: increase both assets and liabilities. C: decrease both assets and liabilities. D: increase assets and decrease liabilities.
C: decrease both assets and liabilities.
Katelyn purchased $10,000 of new electronic equipment for her DJ Company on account. The effect on the basic accounting equation was to: A: increase Cash $10,000 and increase Equipment $10,000. B: decrease Cash $10,000 and increase Accounts Payable $10,000. C: increase Equipment $10,000 and increase Accounts Payable $10,000. D: decrease Cash $10,000 and increase Equipment $10,000.
C: increase Equipment $10,000 and increase Accounts Payable $10,000.
The activity that is the most important indicator of financial health is the net cash flow from: A: financing activities B: investing activities C: operating activities D: buying and selling activities
C: operating activities
A gain on the sale of an asset occurs when: A: None of these answers is correct. B: the book value is equal to the cost of the asset, and the cash received is less than the cost of the asset. C: the cash received is greater than the book value of the asset. D: the cash received is less than the book value of the asset.
C: the cash received is greater than the book value of the asset.
Noble Company's average collection period was 24.6 in Fiscal 2018 and 26.8 in Fiscal 2017. This change indicates: A: the company is selling its inventory faster. B: the company is not selling its inventory as fast. C: the company's customers are paying faster. D: the company's customers are paying slower.
C: the company's customers are paying faster.
The debit amount to Payroll Tax Expense represents: A: the employees' portion of the payroll taxes B: the employer's and employees' portion of the payroll taxes C: the employer's portion of the payroll taxes D: None of the above is correct.
C: the employer's portion of the payroll taxes
Bob Stein's hourly wage is $45.00, and he worked 42 hours during the week. Assuming an overtime rate of time and a half over 40 hours, Bob's gross pay is: A: $1,720. B: $2,580. C: $1,600. D: $1,935.
D: $1,935.
Equipment with a cost of $150,000 has an accumulated depreciation of $50,000. What is the book value of the equipment? A: $50,000 B: $150,000 C: $200,000 D: $100,000
D: $100,000
Robert purchased a truck for $30,000 with a life expectancy of 5 years; using straight-line depreciation, what would the book value of the truck be at the end of the first year? A: $26,000. B: $18,000. C: $30,000. D: $24,000.
D: $24,000.
Nittany Company purchased a machine at an invoice cost of $25,000 subject to a discount of 3%. The discount was taken. Additional costs were installation of $1000, freight of $500 and insurance on the machine after it was placed in operation of $500. The total cost to be captialized to the machinery account is: A: $26,250 B: $26,500 C: $24,500 D: $25,750
D: $25,750
Retained Earnings for 2017 equaled $650,500 whereas 2018's balance equaled $605,200. Net Income for 2018 equaled $450,000. How much in Dividends was paid out in 2018? A: $435,300. B: $214,700. C: None of these answers is correct. D: $495,300.
D: $495,300.
Lacy purchased equipment for $76,000 on January 1. Its residual value is $4,000 with a useful life of 8 years. The amount of depreciation expense each year under the straight-line method is: A: $10,000 B: $19,000 C: $9,500 D: $9,000
D: $9,000
What would the book value be at the end of year 5 for a piece of equipment using the straight-line method when cost is $16,000, residual value is $2,000, and the expected life is 10 years? A: $3,000 B: $5,000 C: $4,400 D: $9,000
D: $9,000
A corporation: A: can continue indefinitely. B: has limited risk to stockholders. C: is owned by stockholders. D: All of the above
D: All of the above
Jefferson Tutoring had the following payroll information on February 28: Employee Gross Pay Cumulative Earnings Prior to this Payroll R Hitchcock $4,000 $4,000 Assume: FICA tax rates are: OASDI 6.2% on a limit of $117,000 and Medicare 1.45%. State Unemployment tax rate is 2% on the first $7,000. Federal Unemployment tax rate is 0.8% on the first $7,000. Using the information above, the journal entry to record the payroll tax expense for Jefferson Tutoring would include: A: a credit to FUTA payable for $24 B: a debit to Payroll Tax Expense in the amount of $390 C: a credit to SUTA Payable for $60 D: All of the above are correct
D: All of the above are correct
Internal control over a company's assets should include the following procedures: A: All cash receipts will be deposited into the bank the same day they arrive. B: All cash payments will be made by check (except petty cash). C: Responsibilities and duties of employees will be divided. D: All of these answers are correct.
D: All of these answers are correct.
The May bank statement for Rental shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20. 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30. 3. Checks outstanding totaled $260. 4. Bank service charges were $50. 5. Deposits in transit were $2,140. Which item(s) will require a journal entry to update the balance in the Cash account? A: Bank service charges, note collected by the bank, and deposits in transit B: Checks outstanding and deposits in transit C: None of these answers is correct D: Bank service charges, note collected by the bank, and error made by Accounting Services
D: Bank service charges, note collected by the bank, and error made by Accounting Services
Grammy's Bakery had the following information for the bi-weekly pay period ending June 30: Employee Name Pay rate Hours worked Cumulative earnings prior to current payroll Department Federal income tax withheld P. Ganster $2,000 Salaried $12,000 Kitchen $86.00 T. Baker $10.00/hour 50 $6,500 Office $22.00 Assume: FICA-OASDI applied to the first $117,000 at a rate of 6.2%. FICA-Medicare applied at a rate of 1.45% FUTA applied to the first $7,000 at a rate of 0.6% SUTA applied to the first $7,000 at a rate of 5.4% State income tax is 3.8% Given the information above, what would be the amount applied to FUTA Payable? A: Debit $3.00 B: Credit $20.40 C: Debit $20.40 D: Credit $3.00
D: Credit $3.00
If the balance of food inventory at the start of the month was $6,000 and at the end of the month you had $1,500 on hand, the adjusting entry for food expense would be: A: Debit Food Expense, $1,500; Credit Food Inventory $1,500 B: Debit Food Expense, $6,000; Credit Food Inventory $6,000. C: Debit Food Inventory, $4,500; Credit Food Expense $4,500. D: Debit Food Expense, $4,500; Credit Food Inventory $4,500.
D: Debit Food Expense, $4,500; Credit Food Inventory $4,500.
Which of the following is a non-depreciable asset? A: Parking Lot B: Desk chairs C: Building D: Land
D: Land
Rick Corporation's Accounts Receivable increased by $25,000 during the year. What is the adjustment to the cash flow statement? A: Add the increase in the investing activities section. B: Add the increase to the net income in operating activities section. C: Subtract the increase in the financing activities section. D: Subtract the increase from the net income in operating activities section.
D: Subtract the increase from the net income in operating activities section.
The employer's total FICA, SUTA and FUTA tax is recorded as: A: a debit to Payroll Tax Payable B: a credit to Accounts Payable C: a credit to Payroll Tax Expense D: a debit to Payroll Tax Expense
D: a debit to Payroll Tax Expense
The balance sheet contains: A: expenses, assets and cash. B: assets, liabilities and revenues. C: liabilities, expenses and capital. D: assets, liabilities and owner equity.
D: assets, liabilities and owner equity.
On November 1, Duane paid $24,000 in advance for a year's rent. The November 30 adjusting entry for rent expense should include a: A: debit Rent Expense, $24,000. B: credit Prepaid Rent Expense, $24,000. C: credit Cash, $2,000. D: debit Rent Expense, $2,000.
D: debit Rent Expense, $2,000.
The beginning balance for the month in the Equipment account was $3,000. The company purchased an additional $1000 worth of Equipment during the month. The ending balance in the account is: A: credit of $2,000. B: credit of $3,000. C: debit of $2,000. D: debit of $4,000.
D: debit of $4,000.
Owner's withdrawals: A: increase expenses. B: increase assets. C: decrease withdrawals. D: decrease assets.
D: decrease assets.
Outstanding checks: A: have been returned to the business for nonpayment. B: have been deducted from the bank balance but not the checkbook records. C: have not been processed by the bank for payment and have not been subtracted from the checkbook. D: have not been processed by the bank for payment but have been subtracted in the checkbook.
D: have not been processed by the bank for payment but have been subtracted in the checkbook.
It's the end of the accounting period and no electric bill has been received (but the expense has been incurred); you should record an entry that: A: decreases the total assets and increases the total expenses. B: decreases the total liabilities and increases the total expenses. C: increases the total assets and increases the total expenses. D: increases the total liabilities and increases the total expenses.
D: increases the total liabilities and increases the total expenses.
A credit to a liability account was posted to the capital account. This would cause: A: owner's equity to be understated. B: assets to be overstated. C: net income to be overstated. D: liabilities to be understated.
D: liabilities to be understated.