Accounting Final

40%

A company purchased office equipment for $20,000 and estimated a salvage value of $4,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

$4,000 loss

A company sold a truck for $3,000 which had cost $25,000 and had accumulated depreciation of $18,000. What is the amount of the gain or loss which the company would record on this sale?

Supplies Expense

A credit is not the normal balance for which account listed below

$4,800

A factory machine was purchased for $60,000 on January 1, 2006. It was estimated that it would have a $12,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2006. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2006 would be

when the inventory is sold

According to the matching principle, the cost of inventory becomes an expense

the amount of the Retained Earnings reported on the balance sheet.

After closing entries are posted, the balance in the Retained Earnings account in the ledger will be equal to

supplies

All of the following are property, plant, and equipment except

is a contra account to Accounts Receivable

Allowance for Doubtful Accounts on the balance sheet

$80,000 credit

At January 1, 2006, Burton Industries reported Retained Earnings of $130,000. During 2006, Burton had a net loss of $30,000 and paid dividends to the stockholders of $20,000. At December 31, 2006, the balance in Retained Earnings is

$8,600

At the beginning of September 2006, RFI Company reported Merchandise Inventory of $4,000. During the month, the company made purchases of $7,800. At September 30, 2006, a physical count of inventory reported $3,200 on hand. Cost of goods sold for the month is

an operating expense

Bad Debts Expense is reported on the income statement as

Common Stock

Closing entries are made for all accounts except

decrease assets and increase liabilities

Credits

debit Cash and credit Accounts Receivable.

Deb Smiley, CPA, has billed her clients for services performed. She subsequently receives payments from her clients. What entry will she make upon receipt of the payments?

$11,760

Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be

$37,700

Farley Company had beginning inventory of $15,000 at March 1, 2006. The inventory at the end of the month is $17,300. During the month, the company made purchases of $40,000. What is the cost of goods sold for the month of March?

$2,940

Flynn Company purchased merchandise inventory with an invoice price of $3,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period?

cost of goods sold

Gross profit for a merchandiser is net sales minus

debit to Unearned Rrevenue and credit Service Revenue

If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be

FIFO method

In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to curent cost is the

Additional Paid-In Capital would be credited for 3,100,000

Kohler, Inc. issued 100,000 shares of $1 par value common stock for $32/share. Which of the following statements is true?

are existing debts and obligations

Liabilities

income statement, statement of retained earnings, and balance sheet.

MFP Tutoring performed services and collected $120 in cash. The transaction will affect the

Accounts Receivable

Management could determine the amounts due from customers by examining which ledger account?

$400,000

On Jan. 1, 2014 Miller, Inc. issued $5,000,000 of 8% 10 year bonds which pay interest semi-annually on June 30 and Dec. 31. At the time of issuance the market rate is 6%. The amount of the semi-annual interest payments would be:

Debit Office Supplies Expense, $2,400; Credit Office Supplies, $2,400

Quirk Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

matching principle

Recording depreciation each period is necessary in accordance with the

revenues

Stockholders' equity is increased by

Physical controls

Storing cash in a company safe is an application of which internal control principle?

the first to be allocated to cost of goods sold

The LIFO inventory method assumes that the cost of the latest units purchased are

economic entity assumption

The assumption that states that the activities of each company be kept separate from the activities of its owners and all other companies is the

monetary unit assumption

The assumption that the unit of measure remains sufficiently constant over time is part of the

Monetary unit assumption

The assumption that the unit of measure stays relatively stable over time is the

generally accepted accounting principles

The standards and rules that are recognized as a general guide for financial reporting are called

events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received

Under accrual-basis accounting

current replacement cost

Under the lower of cost or market basis in valuing inventory, market is defined as

straight-line

Which depreciation method is most frequently used in businesses today?

Equipment

Which of the following accounts would not appear in the Current Asset section of a classified balance sheet?

deposits in transit

Which of the following would be added to the balance per bank on a bank reconciliation?

Sales

Which of the following would not be classified as a contra account?