ACCT 201 Final Practice Tests

Ace your homework & exams now with Quizwiz!

The effects on the basic accounting equation of performing services for cash are to: a.increase assets and decrease stockholders' equity. b.increase assets and increase stockholders' equity. c.increase assets and increase liabilities. d.increase liabilities and increase stockholders' equity.

Adjustments for unearned revenues: a.decrease liabilities and increase revenues. b.increase liabilities and increase revenues. c.increase assets and increase revenues. d.decrease revenues and decrease assets.

Bennie Razor Company has decided to sell one of its old manufacturing machines on June 30, 2022. The machine was purchased for $80,000 on January 1, 2018, and was depreciated on a straight-line basis for 10 years assuming no salvage value. If the machine was sold for $26,000, what was the amount of the gain or loss recorded at the time of the sale? a.$18,000 loss. b.$54,000 loss. c.$22,000 gain. d.$46,000 gain.

If beginning inventory is $60,000, the cost of goods purchased is $380,000, and the ending inventory is $50,000, what is the cost of goods sold under a periodic system? a.$390,000. b.$370,000. c.$330,000. d.$420,000.

In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure a LIFO method b Average cost method c FIFO method d Need more information to answer

Jenks company developed the following information about its inventories in applying the lower cost or market(LCM) basis in valuing inventories Product cost market A 114,000 120,000 B 80,000 76,000 C 160,000 162,000 If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be a 350,000 b 354,000 c 358,000 d 362,000

Laurel Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are issued at a premium, this indicates that: a.the contractual interest rate exceeds the market interest rate. b.the market interest rate exceeds the contractual interest rate. c.the contractual interest rate and the market interest rate are the same. d.no relationship exists between the two rates.

Net credit sales for the month are $800,000. The accounts receivable balance is $160,000. The allowance is calculated as 7.5% of the receivables balance using the percentage-of-receivables basis. If Allowance for Doubtful Accounts has a credit balance of $5,000 before adjustment, what is the balance after adjustment? a.$12,000. b.$7,000. c.$17,000. d.$31,000

Powers Corp received a cash advance of 500 from a customer. As a result of the event, A Assets increased by 500 B Equity increased by 500 C Liabilities decreased by 500 D Both assets and equity increased by 500

The LIFO inventory method assumes that the cost of the latest units purchased are a The first to be allocated to the cost of goods sold b Not allocated to cost of goods sold or ending inventory c The last to be allocated to cost of goods sold d The first to be allocated to ending inventory

The closing entry process consists of closing a All temporary accounts b All assets and liability accounts c All permanent accounts d Out the retained earnings account

Under a perpetual inventory system, when goods are purchased for resale by a company: a.purchases on account are debited to Inventory. b.purchases on account are debited to Purchases. c.purchase returns are debited to Purchase Returns and Allowances. d.freight costs are debited to Freight-Out.

Using accrual accounting, expenses are recorded and reported only a When they are incurred whether or not cash is paid b If they are paid after they are incurred c If they are paid before they are incurred d When they are incurred and paid at the same time

What organization issues U.S. accounting standards? a.Financial Accounting Standards Board. b.International Accounting Standards Committee. c.International Auditing Standards Committee. d.None of the above.

A credit is not the normal balance for which account listed below a Revenue account b Dividends account c Common stock account d Liability account

A major disadvantage of a corporation is: a.limited liability of stockholders. b.additional taxes. c.transferable ownership rights. d.None of the above.

Adjustments for accrued revenues: a.increase assets and increase liabilities. b.increase assets and increase revenues. c.decrease assets and decrease revenues. d.decrease liabilities and increase revenues

Colleen Mooney earned a salary of $400 for the last week of September. She will be paid on October 1. The adjusting entry for Colleen's employer at September 30 is: No entry is required. Dr. Salaries and wages expense 400 and Cr. Salaries and wages payable 400 Dr. Salaries and wages expense 400 and Cr. Cash 400 Dr. Salaries and wages payable 400 and Cr. Cash 400

During February 2017, its first month of operations, the owner of Schween Enterprises invested cash of 100,000. Schwenn had cash sales of 20,000 and paid expenses of 35,000. Assuming no other transactions impacted the cash account, what is the balance is cash at February 28 A 15000 credit B 85000 debit C 120000 debit D 65000 credit

For the basic accounting equation to stay in balance, each transition recorded must a Affect two or less accounts b Affects two or more accounts c Always affect exactly two accounts d Affect the same number of asset and liability accounts

Genesis Company buys a $900 machine on credit. This transaction will affect the: a.income statement only. b.balance sheet only. c.income statement and retained earnings statement only. d.income statement, retained earnings statement, and balance sheet.

Hughes Company has a credit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on review and aging of its accounts receivable at the end of the year, Hughes estimates that $60,000 of its receivables are uncollectible. The amount of bad debt expense which should be reported for the year is: a.$5,000. b.$55,000. c.$60,000. d.$65,000.

In the first month of operations, the total of the debit entries to the cash account amounted to 2000 and the total of credit entries to the cash account amounted to 1500. the cash account amounted to 150. The cash account has a a 1500 credit balance b 500 debit balance c 2000 debit balance d 500 credit balance

ABC Corp. issues 1,000 shares of $10 par value common stock at $12 per share. When the transaction is recorded, credits are made to: a.Common Stock $10,000 and Paid-in Capital in Excess of Stated Value $2,000. b.Common Stock $12,000. c.Common Stock $10,000 and Paid-in Capital in Excess of Par Value $2,000. d.Common Stock $10,000 and Retained Earnings $2,000.

Adjustments for prepaid expenses: a.decrease assets and increase revenues. b.decrease expenses and increase assets. c.decrease assets and increase expenses. d.decrease revenues and increase assets.

Alpha first company just began business and made the following four inventory June 1 150 units 1,040 June 10 200 units 1,560 June 15 200 units 1,680 June 28 150 units 1,320 = 5,600 A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the LIFO inventory method, the amount allocated to ending inventory on June 30 is a 1848 b 1456 c 1508 d 1824

An adjusting entry a Affects two income statement accounts b Affects two balance sheet accounts c Affects a balance sheet account and an income statement account d Is always a compound entry

At Oct 1 2019, Metz Industries had an accounts payable balance of 140,000. during the month, the company made purchases on account of 100,000 and made payments on account of 160,000. At Oct 31,2017 the accounts payable balance is a 140,000 debit b 20,000 credit c 80,000 credit d 160,000 credit

Ending retained earnings for a period is equal to beginning a Retained earnings + net income + dividends b Retained earnings - net income - dividends c Retained earnings + net income - dividends d Retained earnings - net income + dividends

Greese company purchased office supplies costing 7,000 and debited supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed 2,500 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be a Debit supplies expense 2500, credit supplies 2500 b Debit supplies 4,500 credit supplies expense 4,500 c Debit supplies expense 4500, credit supplies 4500 d Debit supplies 2,500 credit supplies expense 2,500

If an individual asset is increased, then A there could be an equal decrease in a specific liability B there could be an equal decrease in stockholder's equity C There could be an equal decrease in another asset D none of these answer choices are correct

In 2022, Patterson Wholesale Company had net credit sales of $750,000. On January 1, 2022, Allowance for Doubtful Accounts had a credit balance of $18,000. During 2022, $30,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage-of-receivables basis). If the accounts receivable balance at December 31 was $200,000, what is the required adjustment to Allowance for Doubtful Accounts at December 31, 2022? a.$20,000. b.$75,000. c.$32,000. d.$30,000.

In the credit terms of 1/10, n/30, the "1" represents the A Full amount of the invoice B Number of days in the discount period C Percent of the cash discount D Number of days when the entire amount is due

Kam Company has the following units and costs: Inventory on Jan. 1 of 8,000 units for $11. Purchase on June 19 of 13,000 units for $12. Purchase on Nov. 8 of 5,000 units for $13. If 9,000 units are on hand at December 31, what is the cost of the ending inventory under FIFO? a.$99,000. b.$108,000. c.$113,000. d.$117,000.

Mary has preformed 500 of CPA services for a client as of the end of the accounting period. What adjusting entry must Mary make a Debit accounts receivable and credit unearned service revenue b Debit unearned service revenue and credit service revenue c Debit accounts receivable and credit service revenue d Debit cash and credit unearned service revenue

On January 1, 2022, Kelly Corp. issues $200,000, 5-year, 7% bonds at face value. The entry to record the issuance of the bonds would include a: a.debit to Cash for $14,000. b.debit to Bonds Payable for $200,000. c.credit to Bonds Payable for $200,000. d.credit to Interest Expense of $14,000.

The market interest rate: a.is the contractual interest rate used to determine the amount of cash interest paid by the borrower. b.is listed in the bond indenture. c.is the rate investors demand for loaning funds. d.More than one of the above is true.

The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on hand at the end of the period, the adjusting entry is: Dr. Supplies 600 and Cr. Supplies expense 600 Dr. Supplies 750 and Cr. Supplies expense 750 Dr. Supplies expense 750 and Cr. Supplies 750 Dr. Supplies expense 600 and Cr. Supplies 600

To record the sale of goods for cash in a perpetual inventory system: a.only one journal entry is necessary to record the cost of goods sold and the reduction of inventory. b.only one journal entry is necessary to record the receipt of cash and the sales revenue. c.two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to record the cost of goods sold and reduction of inventory. d.two journal entries are necessary: one to record the receipt of cash and reduction of inventory, and one to record the cost of goods sold and sales revenue.

Under the accrual basis of accounting a The ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles b Cash must be received before revenue is recognized c 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 d Net income is calculated by matching cash outflows against cash inflows

Which is an advantage of corporations relative to partnerships and sole proprietorships? a.Lower taxes. b.Harder to transfer ownership. c.Reduced legal liability for investors. d.Most common form of organization.

A debit to an asset account indicates a(n) a Error b Credit was made to a liability account c Decrease in the asset d Increase in the asset

A journal provides A The balances for each account B Information about a transition in several different places C A list of all accounts used in the business D A chronological record of transactions

A revenue account: a.is increased by debits. b.is decreased by credits. c.has a normal balance of a debit. d.is increased by credits

An analysis and aging of the accounts receivable of Raja Company at December 31 reveal these data: Accounts receivable $800,000, Allowance for doubtful accounts per books before adjustment (credit) 50,000, Amounts expected to become uncollectible, 65,000. What is the cash realizable value of the accounts receivable at December 31, after adjustment? a.$685,000. b.$750,000. c.$800,000. d.$735,000.

An architecture firm earned 2,000 for architecture services provided with the fee to be paid in the future. No entry was made at the time the service was provided. If the fee has not been paid by the end of the accounting period and no adjusting entry is made, this would cause a A net income to be overstated b Liabilities to be understated c Revenue to be overstated d Revenue to be understated

An expense a Is basically the same as a liability b Leaves stockholders' equity unchanged c Decreases assets and liabilities d Decreases stockholders' equity

As of December 31, 2022, Rockford Corporation has assets of $3,500 and stockholders' equity of $1,500. What are the liabilities for Rockford as of December 31, 2022? a.$1,500. b.$1,000. c.$2,500. d.$2,000.

At January 1st 2017 troyer industries reported retained earnings of $350,000. During 2017 they had a net loss of $75,000 and paid in dividends to stockholders of $50,000. At December 31st 2017 the balance in retained earnings is. A 350,000 debit B 300,000 credit C 275,000 debit D 220,000 credit

Baker bakery company just began business and made the following four inventory purchases in June June 1 150 units 1,040 June 10 200 units 1,560 June 15 200 units 1,680 June 28 150 units 1,320 = 5,600 A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory to June is a 1508 b 1456 c 1848 d 1824

Corrieten Company purchased equipment and incurred these costs: Cash price:$24,000, Sales taxes: 1,200, Insurance during transit: 200, Installation and testing: 400, Total costs: $25,800. What amount should be recorded as the cost of the equipment? a.$24,000. b.$25,200. c.$25,400. d.$25,800.

Cuso Company purchased equipment on January 1, 2021, at a total invoice cost of $400,000. The equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years. What is the amount of accumulated depreciation at December 31, 2022, if the straight-line method of depreciation is used? a.$80,000. b.$160,000. c.$78,000. d.$156,000.

Each of the following is a major type (or category) of adjusting entry except: a.prepaid expenses. b.accrued revenues. c.accrued expenses. d.unearned expenses.

Entries for cash dividends are required on the: a.declaration date and the record date. b.record date and the payment date. c.declaration date, record date, and payment date. d.declaration date and the payment date.

In a classified balance sheet, assets are usually classified as: a.current assets; long-term assets; property, plant, and equipment; and intangible assets. b.current assets; long-term investments; property, plant, and equipment; and common stock. c.current assets; long-term investments; tangible assets; and intangible assets. d.current assets; long-term investments; property, plant, and equipment; and intangible assets.

Kam Company has the following units and costs: Inventory on Jan. 1 of 8,000 units for $11. Purchase on June 19 of 13,000 units for $12. Purchase on Nov. 8 of 5,000 units for $13. If 9,000 units are on hand at December 31, From the data in the previous question, what is the cost of the ending inventory under LIFO? a.$113,000. b.$108,000. c.$99,000. d.$100,000.

Paying an account payable with cash affects the components of the accounting equation in the following way: a.Decreases stockholders' equity and decreases liabilities. b.Increases assets and decreases liabilities. c.Decreases assets and increases stockholders' equity. d.Decreases assets and decreases liabilities.

Preferred stock may have priority over common stock except in: a.dividend preference. b.preference to assets in the event of liquidation. c.cumulative dividends. D.voting.

Question above: Hughes Company has a credit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on review and aging of its accounts receivable at the end of the year, Hughes estimates that $60,000 of its receivables are uncollectible. The amount of bad debt expense which should be reported for the year is: Use the same information as in Question 4, except that Hughes has a debit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. In this situation, the amount of bad debt expense that should be reported for the year is: a.$5,000. b.$55,000. c.$60,000. d.$65,000.

The accountant for Mega Stores should have recorded the following correct entry Jan 15 Notes receivable 243 Equipment 243 Instead, he misunderstood the transaction and recorded an incorrect entry. Which do the following WRONG entries pertaining to this transaction could have been detected as erroneous when using a trial balance? A Notes payable 243 Cash 243 B Notes receivable 234 Equipment 234 C Equipment 243 Notes receivable 243 D Notes receivable 243 Equipment 234

Which accounts normally have debit balances? a.Assets, expenses, and revenues. b.Assets, expenses, and retained earnings. c.Assets, liabilities, and dividends. d.Assets, dividends, and expenses.

Which of these statements is false? a.Ownership of common stock gives the owner a voting right. b.The stockholders' equity section begins with paid-in capital. c.The authorization of capital stock does not result in a formal accounting entry. d.Legal capital is intended to protect stockholders.

In the stockholders' equity section, the cost of treasury stock is deducted from: a.total paid-in capital and retained earnings. b.retained earnings. c.total stockholders' equity. d.common stock in paid-in capital.

A gift shop signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of 50,000 with annual interest of 6%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest? A Interest expense 500 Cash 500 B Interest expense 750 Note payable 750 C Interest expense 500 Interest payable 500 D Interest expense 750 Interest payable 750

A receivable that is evidenced by a formal instrument and that normally requires the payment of interest is: a.an account receivable. b.a trade receivable. c.a note receivable. d.a classified receivable.

A revenue account A Is increased with a debit B Is decreased with a credit C Is increased with a credit D Has a normal balance of a debit

The balance in retained earnings is not affected by: a.net income. b.net loss. c.issuance of common stock. d.dividends.

The entry to record the return of goods from a customer would include a A Debit to sales revenue B Credit to sales revenue C Debit to sales returns and allowances D Credit to sales returns and allowances

The receipt of cash in advance from a customer a Increases assets and decrease stockholders' equity b Increases assets and stockholders' equity c Increases assets and liabilities d None of these answer choices are correct

Prescher Corporation issued bonds that pay interest every January 1. The entry to accrue bond interest at December 31 includes a: a.debit to Interest Payable. b.credit to Cash. c.credit to Interest Expense. d.credit to Interest Payable.

To be classified as a current liability, a debt must be expected to be paid within: a.1 year. b.the operating cycle. c.2 years. d.(a) or (b), whichever is longer.

sales revenue A will always equal cash collections in a month B only results from credit sales C is only recorded after cash is collected D may be recorded before cash is collected

On july 7, 2020, Shireman Enterprises received cash 1400 for services rendered. The entry to record this transaction will include A a debit to cash of 1400 B a debit to service revenue of 1400 C a credit to accounts receivable of 1400 D a credit to accounts payable of 1400

To show how successfully your business performed during a period of time, you would report its revenues and expenses in the A income statement B balance sheet C retained earnings statement D statement of cash flows

an income statment A presents the revenues and expenses for a specific period of time B reports the assets, liabilities, and stockholders' equity at a specific date C summarizes the changes in retained earnings for a specific period of time D reports the changes in assets, liabilities, and stockholders' equity over a period of time

the expense recognition principle matches A expenses with revenue B assets with liabilities C customers with businesses D creditors with businesses

which of the following account is classified as a contra revenue account A sales returns and allowance B COGS C sales revenue D purchase discounts

Adjusting entries are made to ensure that: A revenues are recorded in the period in which the performance obligation is satisfied B II of these answer choices are correct C balance sheet and income statement accounts have correct balance at the end of accounting period D expenses are recognized in the period in which they are incurred

Equipment is classified on the balance sheet as A an intangible asset B property, plant and equipment C a long-term investment D a current asset

If total liabilities increased by 69,000 during a period of time and stockholders' equity decreased by 27,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n) A 96000 increase B 42000 increase C 42000 decrease D 69000 increase

Net income will result during a time period when A assets exceed revenues B revenues exceed expenses C expenses exceed revenue D assets exceed liabilities

Otto's Tune-Up Shop follows the revenue recognition principle. Otto services a car on August 31. The customer picks up the vehicle on September 1 and mails the payment to Otto on September 5. Otto receives the check in the mail on September 6. When should Otto show that the revenue was recognized? A sept 5 B aug 31 C sept 6 D aug 1

Which of the following statements is true? a amounts recieved from issued stock are reported on the income statement b amounts paid out as dividends are not expenses c amounts recieved from issuing stock are revenues d amounts paid out as dividends are reported on the income statement

before adjusting entries, unearned revenues are A recognized as revenue but not yet recieved or recored B received and recorded as liabilities before they are recognized as revenue C recognized as revenue and already received and recorded D recognized as revenue and recorded as liabilities before they are received

on Jan 14, Decker industries purchased supplies of 500 on account. The entry to record the purchase will include A a debit to supplies expense and a credit to accounts receivable B a debit to supplies and a credit to accounts payable C a debit to accounts receivable and a credit to supplies D a debit to supplies and a credit to cash

the LIFO inventory method assumes that the cost of the latest units purchased is A the last to be allocated to cost of goods sold B the first to be allocated to cost of goods sold C not allocated to cost of goods sold or ending inventory D the first to be allocated to ending inventory

the journal entry to record a credit sale ignoring cost of goods sold is A debit cash credit sales revenue B debit accounts receivable credit service revenue C debit cash credit service revenue D debit accounts receivable credit sales returns and allowances

Assets purchased for resale are recorded in which of the following accounts? A patents B supplies C Inventory D Equipment

If the retained earnings account increases from the beginning of the year to the end of the year, then A net income is less than dividends B additional investments are less than net losses C net income is greater than dividends D a net loss is less than dividends

If services are rendered on account, then A liabilities will increase B stockholders' equity will decrease C assets will increase D liabilities will decrease

When a company receives a utility bill but will not pay it right away, it should A debit accounts payable and credit utilities expense B make no entry until the bill is paid C debit utilities expense and credit accounts payable D debit utilities expense and credit accounts receivable

a company using a perpetual inventory system that returns goods previously purchased on credit would a debit sales and credit accounts payable B debit accounts payable and credit purchases C debit accounts payable and credit inventory D debit cash and credit accounts payable

adjusting entries affect at least A one revenue and one balance sheet account B one revenue and one expense account C one revenue and one expense account D one asset and one liability account

during Jan 2022, Carey Services Inc. paid a cash dividends of 2,000. This transaction A reduces net income by 2000 B increases stockholders' equity by 2000 C reduces stockholders' equaity by 2000 D increases expenses by 2000

jill clown earned a salary of 500 for the last week of October. She will be paid on November 1. The adjusting entry for Jill's employer October 31 is A no entry is required B debit salaries and wages expense 500 credit cash 500 C debit salaries and wages expense 500 credit salaes and wages payable 500 D debit salaries and wages payable 500 credit cash 500

Lankston Company began the year by issuing $120,000 of common stock for cash. The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000. What was Lankston's net income for the year? a. $260,000 b. $200,000 c. $80,000 d. $140,000

common stock is reported on the A retained earnings statement B statement of cash flows C income statements D balance sheet

dividends paid A increase assets B increase expense C decrease revenues D decrease retained earnings

the cash account balance of Eckert Enterprises at July 1 is 500. the total of the debit entries to the cash account amounted to 1,500 and the total of the credit entries to the cash account amounted to 1,500 during July. At the end of the month, the cash account has a A 500 credit balance B 2000 debit C 1500 credit D 500 debit

the total liabilities of Hickory Construction Co decreased by 90,000 during the month of August 2022. Stockholders' equity increased by 30,000 during this period. By what amount and in what direction must total assets have changed during August A 120,000 increase B 60,000 increase C 90,000 decrease D 60,000 decrease

which principle dictates that efforts (expenses) be recorded with accomplishments (revenues) A historical cost principle B periodicity principle C revenue recognition principle D expense recognition principle

A company purchased land for 350,000 cash. The real estate brokers' commission was 25,000 and 35,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land is a 410,000 b 350,000 c 375,000 d 385,000

Accounts and notes receivable are reported in the current assets section of the balance sheet at: a.cash (net) realizable value b.net book value. c.lower-of-cost-or-market value. d.invoice cost.

During 2022, Gibson Company assets decreased $50,000 and its liabilities decreased $90,000. Its stockholders' equity therefore: a.increased $40,000. b.decreased $140,000. c.decreased $40,000. d.increased $140,000

Gross profit equals the difference between a sales revenue and COGS b net income and operating expenses c sales revenue and COGS plus operating expenses d sales revenue and operating expenses

If Norben Company issues 6,000 shares of $5 par value common stock for 210,000 the account a Paid-in capital in excess of par value will be credited for 180,000 b Paid-in capital in excess of par value will be credited for 30,000 c Cash will be debited for 180,000 d Common stock will be credited for 210,000

If a company fails to make an adjusting entry to record supplies expense, then A expense will be understated B assets will be understated C net income will be understated D stockholders' equity will be understated

Liabilities are classified on the balance sheet as current or a Long-term b Unearned c Accrued d Deferred

Madson company typically sells subscriptions on an annual basis and publishes six times a year. The magazine sells 90,000 subscriptions in January at 10 each. What entry is made in January to record the sale of the subscriptions Subscriptions A receivable 900,000 subscription revenue 900,000 B Cash 900,000 unearned subscription revenue 900,000 C Subscriptions receivable 150,000 unearned subscription revenue 150,000 D Prepaid subscriptions 900,000 cash 900,000 A B B A C C D D

Nelson Corp sells three different products. The following information is available on December 31 units cost/unit net-realizable 300 4.00 3.50 600 2.00 1.50 1500 3.00 4.00 after applying the lower of cost or net realizable value rule to each item, what will Nelson's total ending inventory balance be? a 6450 b 7950 c 6600 d 6900

The term applied to the periodic expiration of a plant asset's cost is A Depreciation B Cost expiration C Amortization D Depletion

Thompson corporation's unadjusted trial balance includes the following balances (assume normal balances) Accounts receivable 1865000 Allowance for doubtful accounts 35500 Bad debt are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record? a 76,400 b 114,030 c 74,270 d 119,400

When a company has performed a service but has not yet received payment it. A debits accounts receivable in credit service revenue. B debits revenue from services and credits accounts receivable. C debits revenue from services and credit accounts payable. D makes no entry until the cash is received.

Which account will have a zero balance after a company has journalized and posted closing entries? a.Service Revenue. b.Supplies. c.Prepaid Insurance. d.Accumulated Depreciation.

Which of the following financial statements is concerned with the company at a point in time a Balance sheet b Income statement c Retained earnings statement d Statement of cash flows

Which of the following statements about a periodic inventory system is true? a.Companies determine the cost of goods sold only at the end of the accounting period. b.Companies continuously maintain detailed records of the cost of each inventory purchase and sale. c.The periodic system provides better control over inventories than a perpetual system. d.The increased use of computerized systems has increased the use of the periodic system.

Which principle dictates that efforts (expenses) be recorded with accomplishments (revenues)? a.Expense recognition principle. b.Historical cost principle. c.Periodicity principle. d.Revenue recognition principle

equipment costing 20,000 is purchased by paying 5000 cash and signing a note payable for the remainder. The journal entry should include a A credit to cash B debit to notes payable C credit to notes receivable D credit to equipment

A company makes a credit sale of $750 on June 13, terms 2/10, n/30, on which it grants a return of $50 on June 16. What amount is received as payment in full on June 23? a.$700. b.$686. c.$685. d.$650.

Conway Company purchased merchandise inventory with an invoice price of $12,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period a 12000 b 11760 c 11040 d 10800

Cost of goods available for sale consists of two elements: beginning inventory and: a.ending inventory. b.cost of goods purchased. c.cost of goods sold. d.All of the answer choices are correct.

If common stock is issued for an amount greater than par value, the excess should be credited to a Legal capital b Paid-in capital in excess of par value c Cash d Retained earnings

If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at A Par B A discount C A premium D Either a discount or premium

Ottman Company borrows $88,500 on September 1, 2022, from Farley State Bank by signing an $88,500, 12%, 1-year note. What is the accrued interest at December 31, 2022? a.$2,655. b.$3,540. c.$4,425. d.$10,620.

Sizemore Inc. had 10,000 shares of 4%, 100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2020. If the board of directors declares a $25,000 dividend, the A 25,000 will be held as restricted retained earnings and paid out at some future date B Preferred stockholders will receive the entire 25,000 C Preferred stockholders will receive 1/10th of what the common stockholders will receive D Preferred stockholders will receive 12,500 and the common stockholders will receive 12,500

The expense recognition principle matches a Assets with liabilities b Expenses with revenues c Creditors with businesses d Customers with businesses

The interest charged on a 300,000 note payable, at the rate of 6%, on a 90-day note would be A 9,000 B 4,500 C 18,000 D 1,500

The journal entry to record a credit sale ignoring cost of goods sold is a Accounts receivable sales returns and allowances b Accounts receivable sales revenue c Cash sales revenue d Cash service revenue

The usual sequence of steps in the transaction recording process is A Journalize, analyze, post to the ledger B Analyze, journalize, post to the ledger C Journalize, post to the ledger, analyze D Post to the ledger, journalize, analyze

Which is not one of the three forms of business organization? a.Sole proprietorship. b.Creditorship. c.Partnership. d.Corporation.

Which of these statements about stock dividends is true? a.Stock dividends reduce a company's cash balance. b.A stock dividend has no effect on total stockholders' equity. c.A stock dividend decreases total stockholders' equity. d.A stock dividend ordinarily will increase total stockholders' equity.

Which statement presents information as of a specific point in time? a.Income statement. b.Balance sheet. c.Statement of cash flows. d.Retained earnings statement.

dividends are reported on the a income statement b retained earnings statement c income statement and balance sheet d balance sheet

A corporation records a dividend-related liability a On the payment date b On the record date c On the declaration date d When dividends are in arrears

Debits: a.increase both assets and liabilities. b.decrease both assets and liabilities. c.increase assets and decrease liabilities. d.decrease assets and increase liabilities

During 2017 its first year of operations Jane's bakery has a revenue of $130,000 an expenses of $66,000. The business paid cash dividends of $36,000. What is the balance in retained earnings at December 31st 2017 A O B $36,000 debit C $28,000 credit D $64,000 credit

In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense a Average cost method b Income tax expense for the period will be the same under all assumptions c LIFO d FIFO

In periods of rising prices, LIFO will produce: a.higher net income than FIFO. b.the same net income as FIFO. c.lower net income than FIFO. d.higher net income than average-cost.

Moss country bank agrees to lend the Sadowski Brick Company 500,000 on Jan 1. Sadowski Brick Company signs a 500,000, 6%, 9-month note. The entry made by Sadowski Brick Company on Jan 1 to record the proceeds and issuance of the note is A Interest expense 22500 cash 477500 notes payable 500000 B Cash 500000 notes payable 500000 C Cash 500000 interest expense 22500 notes payable 522500 D Cash 500000 interest expense 22500 notes payable 500000 interest payable 22500 A c B d C b D a

On Jan 1, a machine with a useful life of five years and a salvage value 25,000 was purchased for 125,000. What is the depreciation expense for year 2 under straight-line depreciation a 75,000 b 15,000 c 20,000 d 60,000

The revenue recognition principle dictates that revenue should be recognized in the accounting records a In the period that income taxes are paid b At the end of the month c When the performance obligation is satisfied d When cash is received

Treasury stock is A Stock issued by the US Treasury Department B Corporate stock issued by the treasurer of a company C A corporation's own stock, which has been required and held for future use D Stock purchased by a corporation and held as an investment in its treasury

Under a perpetual inventory system, in addition to making the entry to record a sale, a company would A debit COGS and credit purchases B debit inventory and credit COGS C debit COGS and credit inventory D make no additional entry until the end of the period

What is the term applied to the excess of net sales over the cost of goods sold a Income from operations b Income before income taxes c Gross profit d Net income

Which financial statement reports assets, liabilities, and stockholders' equity? a.Income statement. b.Retained earnings statement. c.Balance sheet. d.Statement of cash flows.

Which of the following most likely would be classified as a current liability A Mortgage payable as a single payment in 10 years B Three year notes payable C Dividend payable D Bonds payable in 5 years

Which of these is not a major advantage of a corporation? a.Separate legal existence. b.Continuous life. c.Government regulations. d.Transferable ownership rights

Which sales accounts normally have a debit balance? a.Sales Discounts. b.Sales Returns and Allowances. c.Both (a) and (b). d.Neither (a) nor (b).

an income statement shows. A revenue liabilities and stockholders equity. B expenses dividends and stockholders equity. C revenues expenses in the income. D assets liabilities and stockholders equity

current liabilities are due a And receivable within one year b But not payable for more than one year c And payable within one year d But not receivable for more than one year

the left side of account is A blank B a description of the account C the debit side D the balance of the account

which pair of accounts follows the rules of debit and credit in relation to increase and decrease in the same manner. A dividends payable and rent expense. B utilities expense and notes payable. C prepaid insurance in advertising expense. D service revenue in equipment

11. Hughes Company has a credit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on review and aging of its accounts receivable at the end of the year, Hughes estimates that $60,000 of its receivables are uncollectible. Use the same information as in Question 11, except that Hughes has a debit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. In this situation, the amount of bad debt expense that should be reported for the year is: a.$5,000. b.$55,000. c.$60,000. d.$65,000.

A plant asset with a cost of 300,000 and accumulated depreciation of 285,000 is sold for 35,000. what is the amount of the gain or loss on disposal of the plant asset A 20,000 loss B 35,000 loss C 35,000 gain D 20,000 gain

Adjusting entries are made to ensure that a Balance sheet and income statement accounts have correct balance at the end of an accounting period b Revenues are recorded in the period in which the performance obligation is satisfied c Expense are recognized in the period in which they are incurred d All of these answer choices are correct

An analysis and aging of the accounts receivable of Raja Company at December 31 reveal these data: Accounts receivable$800,000Allowance for doubtful accounts per books before adjustment (credit)50,000Amounts expected to become uncollectible65,000 What is the cash realizable value of the accounts receivable at December 31, after adjustment? a.$685,000. b.$750,000. c.$800,000. d.$735,000

Depreciation is a process of A Asset valuation B Asset devaluation C Cost accumulation D Cost allocation

Dividends in arrears are dividends on a Cumulative preferred stock that have been declared but have not been paid b Non-cumulative preferred stock that have not been declared for a given period of time c Common dividends that have been declared but have not yet been paid d Cumulative preferred stock that have not been declared for a given period of time

Greese Company purchased office supplies costing 7,000 and debited supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed 2,500 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be A Debit supplies 4500 credit supplies expense 4500 B Debit supplies expense 2500 credit supplies 2,500 C Debit supplies 2500 credit supplies expense 2500 D Debit supplies expense 4500 credit supplies 4500

JD Company borrowed $70,000 on December 1 on a 6-month, 12% note. At December 31: a.neither the note payable nor the interest payable is a current liability. b.the note payable is a current liability but the interest payable is not. c.the interest payable is a current liability but the note payable is not. d.both the note payable and the interest payable are current liabilities.

Net income will result during a time period when: a.assets exceed liabilities. b.assets exceed revenues. c.expenses exceed revenues. d.revenues exceed expenses.

The allowance for doubtful accounts is necessary because A A liability results when a credit sale is made B Uncollectible accounts that are written off must be accumulated in a separate account C Management needs to accumulate all the credit losses over the years D When recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay

The balance in the accumulated depreciation account represents the A Amount charged to expense in the current period B Cash fund to be used to replace plant assets C Amount to be dedicated from the cost of the plant asset to arrive at its fair market value D Amount charged to expense since the acquisition of the plant asset

The board of directors of Yancey Company declared a cash dividend of 1.50 per share on 42,000 shares of common stock on July 15,2020. the dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020. The correct entry to be recorded on July 15,2020, will include a a Credit to cash dividends b Credit to cash c Debit to dividends payable d Debit to cash dividends

The financial statements for Macias Corporation contained the following information. Accounts receivable$ 5,000Sales revenue75,000Cash15,000Salaries and wages expense20,000Rent expense10,000 What was Macias Corporation's net income? a.$60,000. b.$15,000. c.$65,000. d.$45,000.

The payment of a liability a Decreases assets and stockholders' equity b Increase assets and decreases liabilities c Decreases assets and increases liabilities d Decreases assets and liabilities

Treasury stock may be repurchased: a.to reissue the shares to officers and employees under bonus and stock compensation plans. b.to signal to the stock market that management believes the stock is underpriced. c.to have additional shares available for use in the acquisition of other companies. d.More than one of the above.

U-Bet Corporation has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2022. No dividends were declared in 2020 or 2021. If U-Bet wants to pay $375,000 of dividends in 2022, common stockholders will receive: a.$0. b.$295,000. c.$215,000. d.$135,000.

Under a perpetual inventory system, acquisition of merchandise for resale is debited to a The purchase account b The cost of goods sold account c The supplies account d The inventory account

Under the allowance method of accounting or bad debts, why must uncollectible accounts receivable be estimated at the end of accounting period a The IRS rules require the company to make the estimate b To allow the collection department to schedule work for the next accounting period c To determine the gross realizable value of accounts receivable d To match bad debt expense to the period in which the revenues were earned

West county bank agrees to lend Drake Builders Company 400,000 on Jan 1. Drake Builders Company 400,000, 6%, 6-month note. What is the adjusting entry required if Drake Builders Company prepares financial statements on March 30 A Interest expense 12,000 interest payable 12,000 B Interest expense 12,000 cash 12,000 C Interest expense 6,000 interest payable 6,000 D Interest payable 6,000 interest expense 6,000 A d B b C a D c

What organization issues US accounting standards A Security exchange commission B International accounting standards committee C International auditing standards committee D Financial accounting standards board

Which account below is not a subdivision of stockholder's equity A Dividends B Revenues C Expenses D Liabilities

goods purchased for future use in the business, such as supplies, are called a stockholders' equity b liabilities c revenues d prepaid expenses

in a period of rising prices, which of the following inventory methods generally results in the lowest amount of net income A need more information to answer B average cost method C FIFO method D LIFO method

the balance in the prepaid rent account before adjustment at the end of the year is 12,000 and represents three months rent paid on Dec 1. The adjusting entry required on Dec 31 is A debit rent expense 12000 credit prepaid rent 12000 B debit prepaid rent 8000 credit rent expensee 8000 C debit prepaid rent 8000 credit rent expense 8000 D debit rent expense 4000 credit prepaid rent 4000

which accounts normally have a debit balance. A assets, expense and revenues. B assets expense and retain earnings. C liabilities and dividends. D assets expenses and dividends

An income statement reports information over a period of time, indicating the financial progress of a business in earning a net income or a net loss.

ACCT 201 Final Practice Tests

Related study sets

BUC finals

mid term study guide

Alcohol and the Body Practice

MKT 300 Exam 1

Psyc 2525 test 3

Chapter 42: Stress and Adaptation

Chapter 3 Review

Doppler- Effect

Optics III final L4: Polarization and Scattering

BA 111 Chapter 10

testtest Art History: Greece

PED101 "Get Fit Stay Well" Ch. 10

Chapter 37: Management of Patients with Musculoskeletal Trauma - ML3

Energy Balance Exam

Endocrine System

Math 047J (Basic Multiply & Divide problems)

Chapter 5 Lecture Notes

AutoCAD CH 1-11

Auditing

Nervous