5312 Exam 1
The balance sheet shows the following accounts and amounts: Cash $13,000; Short-term Debt $21,000; Buildings and Equipment $420,000; Inventory, $44,000; Notes Payable $60,000; Accumulated Depreciation $110,000; Common Stock $80,000; Accounts Receivable $38,000; Retained Earnings $237,000; Accounts Payable $17,000. Total assets on the balance sheet are
$405,000.
he balance sheet shows the following accounts and amounts: Cash $13,000; Short-term Debt $21,000; Buildings and Equipment $420,000; Inventory, $44,000; Notes Payable $60,000; Accumulated Depreciation $110,000; Common Stock $80,000; Accounts Receivable $38,000; Retained Earnings $237,000; Accounts Payable $17,000. Total liabilities on the balance sheet are:
$98,000.
The annual rate of return on a six-month investment of $1,000 that earns a return of $100 is Blank______.
20 % ($100/$1,000) / 6/12 = 20%
The time frame associated with an income statement is:
A past period time
Which of the following accounting methods accomplishes much of the matching of revenues and expenses?
Accrual accounting
Which of the following entities would not require accounting information pertaining to their economic activities?
All of these entities require accounting information.
The Public Company Accounting Oversight Board (PCAOB) has the authority to set and enforce standards for public companies related to:
Auditing. Attestation. Quality control. Ethics All of the answers are correct. ( this is the answer)
To accrue $7100 of employee salaries for the last week of February, the employer's journal entry is
Debit Salaries expense 7,100 Credit Salaries Payable 7,100
HammerNail Woodworks agreed to make a short-term loan to a component parts supplier. A note for $40,000 was issued by HammerNail on November 1, 2022 at 6% interest with both principal and interest due on Oct 31 2023. Which of the following Journal entries should HammerNail use to accrue Interest at end of each month
Debit interest receivable Credit Interest revenue
The officer of a corporation responsible for the firm's published financial statements would be most concerned about pronouncements of the:
FASB.
The authoritative financial accounting standards-setting body in the United States is presently the:
Financial Accounting Standards Board (FASB)
The accountant at WooSah! USA made an adjusting entry at the end of February to accrue interest on a note receivable from a customer. The effect of this entry is to:
Increase ROI for February
A Credit entry will
Increase a liability account
The effect of an adjustment on the financial statements is usually to:
Increase the accuracy of both the balance sheet and income statement
a Debit entry will:
Increase the balance of an expense account
Cost accounting is a subset of which of the following?
Managerial accounting
The amount of interest earned on an investment is calculated as:
Principal ($) x Rate (%) x Time (in years)
Which of the following is not an example of a decision or informed judgment that a potential investor would make from accounting information?
Probability of success of a new product development
return on investment (ROI)
ROI= net income/ avg. total assets
Rate of return
Rate of return = amount of return/ amount invested
If margin = 5 percent, average total assets = $600,000, and ROI = 25 percent, then:
Reason: Turnover = 25% / 5% = 5.0Sales = $600,000 x 5.0 = $3,000,000Net income = $3,000,000 x 5% = $150,000
Which of the following statements about the Financial Accounting Standards Board is correct?
The FASB follows a due process procedure that permits input from interested parties before an Accounting Standards Update (ASU) is issued.
Stockholders' equity refers to which of the following?
The ownership rights of the stockholders of the company
What do you need to know to calculate the amount of interest earned on an investment?
The principal amount invested The length of time the funds are invested The interest rate per year
The balance in the wages payable account increased from $9,000 at the beginning of the month to $1500 at the end of the month. Wages accrued during the month totaled $60,000 Waged paid during month totaled $66,000 Wages Paid during month totaled $54,000 Wages expense for the month totaled $54,000 wages expense for the month totaled $66,000
Wages paid during the month totaled $54,000
If the rate of return on an investment was 10 percent __.
and $500 was invested for one year, then the return on the investment would have been $50 Return = Prinicipal X Rate X (time/12)
The ethical concept of integrity means that an individual must:
attempt to be honest and forthright in dealings and communications with others.
Expenses are:
decreases in net assets resulting from usual operating activities.
Current U.S. Generally Accepted Accounting Principles and auditing standards require the financial statements of an entity for the reporting period to include:
financial position at the end of the period.
The objectives of financial reporting for nonbusiness enterprises:
focus on providing information for resource providers, rather than investors.
Trend analysis:
for a company over several years generally leads to a more meaningful analysis than does the observation of a single year's ratio result. is a meaningful comparison despite the use of different financial accounting alternatives to develop the data used in the ratios.
In the sellers records, the sake of merchandise on account would
increase assets and increase expenses
A credit entry will:
increase the balance of a revenue account.
Trend analysis of ratios ______.
is a meaningful comparison despite the use of different financial accounting alternatives to develop the data used in the ratios
Turnover:
is calculated by dividing sales by average total assets.relates to the efficiency with which a firm's assets are used in the revenue-generating process.
Working capital:
is expressed as a dollar amount, rather than as a financial ratio.is the excess of a firm's current assets over its current liabilities.
When the bank CREDITS your acct for INTEREST earned during the month
it is INCREASING your acct balance which is shown as a LIABILITY from its perspective
Which of the following is not a transaction to be recorded in the accounting records of a company
receiving a plaque recognizing employee participation in a charity event
When a bank DEBITS your acct for the SERVICE CHARGES incurred during the month the bank is communicating
that the bank DECREASED your acct balance which is shown as a LIABILITY from the banks perspective
Paid-in Capital represents:
the amount invested in the company by the stockholders.
The balance of the Wages Payable account was $20,000 at the beginning of the month, Wages accrued during the month totaled $38,000. Wages paid during the month were $43000 Wages expense for the month totaled $58,000 The balance of Wages Payable account at the end of the month was $15,000 The balance of the Wages Payable at the end of the month was $38,000 Wages expense for the month totaled $43,000
the balance of the Wages Payable account at the end of the month was $15,000
Accounting can be defined as:
the process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgments.
Merchants who send notice that they have CHARGED your account are comunicating
they they DEBITED your account in their acct records to INCREASE your acct balance, which is an ASSET from their perspective
