Accounting I Final
Unearned fees appear on the a.balance sheet as a current liability b.balance sheet in the Owner's Equity section c.balance sheet in the Current Assets section d.income statement as revenue
a. balance sheet as a current liability
Which of the following describes the classification and normal balance of the fees earned account? a.revenue, credit b.owner's equity, debit c.liability, credit d.asset, credit
a. revenue, credit
The income statement will present a.revenues less expenses (ordered largest to smallest amounts) with miscellaneous expense listed last b.revenues less expenses (order is not important) c.revenues less expenses (ordered smallest to largest amounts) with miscellaneous expense listed last d.revenues less expenses (ordered in alphabetical order)
a. revenues less expenses (ordered largest to smallest amounts) with miscellaneous expense listed last
Equipment with a cost of $144,802 has an estimated residual value of $9,003 and an estimated life of 6 years or 12,095 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used for 3,004 hours? a.$22,633.17 b.$33,728.00 c.$24,133.67 d.$33,773.21
a. $22,633.17
The assets and liabilities of a company are $137,477 and $90,106, respectively. Owner's equity should equal a.$90,106 b.$47,371 c.$227,583 d.$137,477
a. $90,106
The formula for annual depreciation using the straight-line depreciation method is a.Depreciable Cost ÷ Estimated Useful Life b.Initial Cost × Estimated Useful Life c.Initial Cost ÷ Estimated Useful Life d.Depreciable Cost × Estimated Useful Life
a. Depreciable Cost + Estimated Useful Life
Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of owner's equity (OE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared? a.I,OE, B b.OE, I, B c.B, I, OE d.B,OE, I
a. I,OE,B
The formula for depreciable cost is a.Initial Cost - Residual Value b.Initial Cost - Accumulated Depreciation c.Initial Cost + Residual Value d.Depreciable Cost = Initial Cost
a. Initial Cost - Residual Value
The account type and normal balance of Prepaid Expense are a.asset, debit b.liability, credit c.expense, debit d.revenue, credit
a. asset, debit
The type of account and normal balance of Prepaid Insurance would be a.asset, debit b.contra asset, credit c.contra asset, debit d.asset, credit
a. asset, debit
Liabilities are reported on the a.balance sheet b.statement of cash flows c.statement of owner's equity d.income statement
a. balance sheet
Which of the following financial statements reports information as of a specific date? a.balance sheet b.statement of owner's equity c.statement of cash flows d.income statement
a. balance sheet
Which of the following entries records the payment of an account payable? a.debit Accounts Payable; credit Cash b.debit Cash; credit Accounts Payable c.debit Cash; credit Supplies Expense d.debit Accounts Receivable; credit Cash
a. debit Accounts Payable; credit Cash
Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be a.debit Bad Debt Expense; credit Accounts Receivable b.debit Accounts Receivable; credit Notes Receivable c.debit Allowance for Doubtful Accounts; credit Accounts Receivable d.debit Bad Debt Expense; credit Allowance for Doubtful Accounts
a. debit Bad Debt Expense; credit Accounts Recievable
Michael Anderson is starting a computer programming business and has deposited an initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected. a.increase in assets (Cash) and increase in owner's equity (Michael Anderson, Capital) b.increase in assets (Cash) and increase in liabilities (Accounts Payable) c.increase in assets (Accounts Receivable) and decrease in liabilities (Accounts Payable) d.increase in assets (Cash) and increase in assets (Accounts Receivable)
a. increase in assets (Cash) and increase in owner's equity (Michael Anderson, Capital)
The account type and normal balance of Unearned Revenue are a.liability, credit b.revenue, credit c.asset, debit d.expense, debit
a. liability, credit
The classification and normal balance of the accounts payable account are a.liability, credit balance b.owner's equity, credit balance c.revenue, credit balance d.asset, credit balance
a. liability, credit balance
The inventory system employing accounting records that continuously disclose the amount of inventory is called a.perpetual b.periodic c.retail d.physica
a. perpetual
A machine with a cost of $63,200 has an estimated residual value of $4,791 and an estimated life of 5 years or 18,648 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method? a.$23,364 b.$15,168 c.$25,280 d.$12,640
b. $15,168
A machine with a cost of $165,000 has an estimated residual value of $15,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the second full year, during which the machine was used 7,000 hours? a.$84,000 b.$70,000 c.$55,000 d.$7,000
b. $70,000
If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible? a.Uncollectible Accounts Receivable b.Bad Debt Expense c.Allowance for Doubtful Accounts d.Accounts Receivable
b. Bad Debt Expense
The classified balance sheet will show which asset subsections? a.Other Revenues and Property, Plant and Equipment b.Current Assets and Property, Plant, and Equipment c.Current Assets and Other Equity d.Current Liabilities and Short-Term Assets
b. Current Assets and Property, Plant, and Equipment
The name, term, or symbol used to identify a business and its products is called a.a copyright b.a trademark c.a patent d.goodwill
b. a trademark
The debt created by a business when it makes a purchase on account is referred to as an a.asset b.accounts payable c.account receivable d.expense payable
b. accounts payable
What is the type of account and normal balance of Allowance for Doubtful Accounts? a.contra asset; credit b.asset; debit c.asset; credit d.contra asset; debit
b. asset, debit
Which of the following entries records the withdrawal of cash by Sally Anderson, owner of a proprietorship, for personal use? a.debit Salaries Expense; credit Salaries Payable b.debit Sally Anderson, Drawing; credit Cash c.debit Sally Anderson, Capital; credit Cash d.debit Salaries Expense; credit Cash
b. debit Sally Anderson; credit Salaries Payable
An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $4,118. If Allowance for Doubtful Accounts has a $1,182 credit balance, the adjustment to record the bad debt expense for the period will require a a.credit to Allowance for Doubtful Accounts for $1,182. b.debit to Bad Debt Expense for $2,936. c.debit to Bad Debt Expense for $5,300. d.debit to Bad Debt Expense for $4,118.
b. debit to Bad Debt Expense for $2,936
The annual accounting period adopted by a company is called its a.natural business year b.fiscal year c.calendar year d.natural calendar year
b. fiscal year
Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. Determine the second-year depreciation using the straight-line method. a.$9,000 b.$19,200 c.$9,600 d.$13,200
c. $9,600
Which of the following entries records the acquisition of office supplies on account? a.Accounts Receivable, debit; Office Supplies, credit b.Cash, debit; Office Supplies, credit c.Office Supplies, debit; Accounts Payable, credit d.Office Supplies, debit; Cash, credit
c. Office Supplies, debit; Accounts Payable, credit
Merchandise Inventory is classified on the balance sheet as a a.long-term liability b.current liability c.current asset d.long-term asset
c. current asset
The payment for the monthly rent will require which of the following entries? a.credit Rent Expense and debit Cash b.credit Cash and credit Rent Expense c.debit Rent Expense and credit Cash d.debit Cash and debit Rent Expense
c. debit Rent Expense and credit Cash
Two methods of accounting for uncollectible accounts are the a.direct write-off method and the accrual method b.allowance method and the accrual method c.direct write-off method and the allowance method d.allowance method and the net realizable method
c. direct write-off method and the allowance method
The method of determining depreciation that yields successive reductions in the periodic depreciation charge over the estimated life of the asset is the a.straight-line method b.units-of-production method c.double-declining-balance method d.time-valuation method
c. double-declining-balance method
The initials GAAP stand for a.general accounting procedures b.generally accepted accounting practices c.generally accepted accounting principles d.generally accepted plans
c. generally accepted accounting principles
Transactions affecting owner's equity include a.owner's withdrawals, earning of revenues, incurrence of expenses, and purchase of supplies on account b.owner's investments, earning of revenues, incurrence of expenses, and collection of accounts receivable c.owner's investments, owner's withdrawals, earning of revenues, and incurrence of expenses d.owner's investments and payment of liabilities
c. owner's investments, owner's withdrawals, earning of revenues, and incurrence of expenses
A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on the sale of the fixed asset? a.$3,500 gain b.$1,500 loss c.$2,000 loss d.$2,000 gain
d. $2,000 gain
After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $671,033 and Allowance for Doubtful Accounts has a balance of $18,497. What is the net realizable value of accounts receivable? a.$671,033 b.$18,497 c.$689,530 d.$652,536
d. $652,536
If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible? a.Interest Expense b.Allowance for Doubtful Accounts c.Uncollectible Accounts Expense d.Accounts Receivable
d. Accounts Receivable
Accumulated Depreciation appears on the a.income statement as an operating expense b.balance sheet in the Long-Term Liabilities section c.balance sheet in the Current Assets section d.balance sheet in the Property, Plant, and Equipment section
d. balance sheet in the Property, Plant, and Equipment section
Which of the following accounts is a liability? a.Service Revenue b.Accounts Receivable c.Wages Expense d.Accounts Payable
d. accounts payable
The asset created by a business when it makes a sale on account is termed a.unearned revenue b.accounts payable c.prepaid expense d.accounts receivable
d. accounts receivable
Generally accepted accounting principles require that companies use the _____ of accounting. a.cash basis b.account basis c.deferral basis d.accrual basis
d. accrual basis
The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is a.depletion b.depreciation c.allocation d.amortization
d. amortization
Adjusting entries affect at least one a.revenue and the dividends account b.revenue and one owner's equity account c.income statement account and one balance sheet account d.asset and one owner's equity account
d. asset and own owner's equity account
Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as a.sales returns b.sales when the credit card company remits the cash c.sales on account d.cash sales
d. cash sales
A list of the accounts used by a business is called the a.debit listing b.journal c.T chart d.chart of accounts
d. chart of accounts
The depreciation method that does not use residual value in computing the first year's depreciation expense is a.sum-of-the-years-digits b.straight-line c.units-of-activity d.double-declining-balance
d. double-declining-balance
Which term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net income b.income from operations c.gross sales d.gross profit
d. gross profit
A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the a.statement of retained earnings b.statement of cash flows c.balance sheet d.income statement
d. income statement
The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n) a.balance sheet b.statement of cash flows c.statement of owner's equity d.income statement
d. income statement
Accumulated Depreciation a.is the same as Depreciation Expense b.is used to show the amount of cost expiration of intangibles c.is used to show the amount of cost expiration of natural resources d.is a contra asset account
d. is a contra asset account
Debts owed by a business are referred to as a.expenses b.owner's equity c.accounts receivable d.liabilities
d. liabilities
In credit terms of 3/15, n/45, the "3" represents the a.number of days when the entire amount is due b.number of days in the discount period c.full amount of the invoice d.percent of the available discount for early payment
d. percent of the available discount for early payment
A fixed asset's estimated value at the time it is to be retired from service is called a.carrying value b.book value c.market value d.residual value
d. residual value