COBA CORE Accounting 2050 & 2060
Maxwell Tax Planning Service bought communications equipment for $10,200 on January 1, 2019. The equipment has an estimated useful life of five years and zero residual value. Maxwell uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of each month. As of June 30, 2019, the balance in the Accumulated Depreciation account for this equipment is ________
$1,020
uring the accounting period, office supplies were purchased on account for $3,200. A physical count, on the last day of the accounting period, shows $1,100 of office supplies on hand. Supplies Expense for the accounting period is $3,300. What was the beginning balance of Office Supplies?
$1,200
Fleetwood, Inc. signed a three-year note payable for $59,000 at 7% annual interest. What is the interest expense for 2019 if the note was signed on August 1, 2019? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)
$1,721
Singh Enterprises manufactures picture frames. Its production operations are divided into two departments — Assembly and Finishing. The company uses a process costing system. Singh incurred the following costs during the year to produce 6000 picture frames: Assembly $9700 Finishing $2250 If Singh can only sell 5100 picture frames during the year, what will be the cost per unit of the picture frames produced? (Round your answer to the nearest cent.)
$1,99
nderson Corporation has purchased a group of assets for $20,300. The assets and their relative market values are listed below. Land $6800 Equipment 2300 Building 3600 Which of the following amounts would be debited to the Land account? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
$10,962
Lakeshore Manufacturing provided the following information for the month ended March 31: Sales Revenue $30,000 Beginning Finished Goods Inventory 17,000 Ending Finished Goods Inventory 11,500 Cost of Goods Manufactured 12,600 Compute gross profit.
$11,900
An asset was purchased for $37,000 on January 1, 2019. The asset's estimated useful life was five years, and its residual value was $9000. The straight-line method of depreciation was used. Calculate the gain or loss if the asset is sold for $19,000 on December 31, 2019, the last day of the accounting period.
$12,400 loss
merchandiser uses a perpetual inventory system. The beginning Retained Earnings balance of the merchandiser was $110,000. During the year, Sales Revenue amounted to $90,000, Cost of Goods Sold was $40,000, and all other expenses totaled $12,000. The company declared and paid $27,000 as dividends. The ending balance of Retained Earnings would be ________
$121,000
A company purchased 500 units for $30 each on January 31. It purchased 550 units for $33 each on February 28. It sold a total of 650 units for $45 each from March 1 through December 31. What is the cost of ending inventory on December 31 if the company uses the first-in, first-out (FIFO) inventory costing method? (Assume that the company uses a perpetual inventory system.)
$13,200
On January 1, 2018, Benbrook Company purchased equipment and signed a six-year mortgage note for $160,000 at 15%. The note will be paid in equal annual installments of $42,278, beginning January 1, 2019. Calculate the balance of Mortgage Payable after the payment of the first installment. (Round your answer to the nearest whole number.)
$141,722
Fire Cat, Inc. selected cost data for the year are shown below: Cost of Goods Manufactured $145,500 Work-in-Process Inventory, Jan. 1 19,500 Work-in-Process Inventory, Dec. 31 22,000 Direct Materials Used 18,600 What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year?
$148,000
Precision Camera Services started the year with total assets of $90,000 and total liabilities of $65,000. The revenues and the expenses for the year amounted to $100,000 and $70,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $40,000. What is the amount of stockholders' equity at the end of the year?
$15,000
The balances of select accounts of Donovan, Inc. as of December 31, 2018 are given below. Debit Credit Building $120,000 Cash 9,000 Office Supplies 1,000 Furniture 4,000 Prepaid Insurance 600 Accumulated Depreciation—Furniture $2,000 Land 33,000 Accumulated Depreciation—Building 4,000 Accounts Receivable 2,000 What amount of total long-term assets would be shown on the balance sheet at December 31, 2018?
$151,000
After the December 31, 2019 adjusting journal entries have been posted, Sinclair Enterprises has the following account balances (all accounts have normal balances) are: Account Title Account Balance Accounts Receivable $159,000 Allowance for Bad Debts $4,600 Bad Debts Expense $8,200 What is the net realizable value as of December 21, 2019?
$154,400
Venus Corp. sold goods, with a selling price of $17,221, for cash. The state sales tax rate is 8%. What amount is credited to the Sales Revenue account? (Round calculations to the nearest dollar.)
$17,221
A company reports net accounts receivable of $152,000 on its December 31, 2019 balance sheet. The Allowance for Bad Debts has a credit balance of $19,000. What is the balance of Accounts Receivable?
$171,000
Baldwin, Inc. had the following balances and transactions during 2019: Beginning Merchandise Inventory as of January 1, 2019 125 units at $81 March 10 Sold 50 units June 10 Purchased 225 units at $86 October 30 Sold 175 units What would be reported as Cost of Goods Sold on the income statement for the year ending December 31, 2019 if the perpetual inventory system and the first-in, first-out inventory costing method are used?
$18,725
f bonds with a face value of $209,000 are issued at 93, the amount of cash proceeds is ________.
$194,370
Dynamic Production Services started the year with total assets of $120,000 and total liabilities of $55,000. The revenues and the expenses for the year amounted to $100,000 and $80,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $50,000. Calculate Dynamic's net income for the year.
$20,000
Artisan Inspiration, Inc. is a merchandiser of stone ornaments. The company sold 8000 units during the year. The company has provided the following information: Sales Revenue $593,000 Purchases (excluding Freight In) 304,000 Selling and Administrative Expenses 68,000 Freight In 14,000 Beginning Merchandise Inventory 46,000 Ending Merchandise Inventory 42,000 What is the operating income for the year? (Round your answer to the nearest whole dollar.)
$203,000
On January 1, 2018, Jordan, Inc. acquired a machine for $1,100,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $61,000. Calculate the depreciation expense per year using the straight-line method.
$207,800
Wellness, a healthy living magazine, collected $504,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the balance in the Unearned Revenue account as of December 31?
$210,000
A corporation used $34,000 of direct materials. It incurred $74,000 in direct labor costs and $112,500 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $27,500 and $20,500, respectively?
$227,500
Bachman, Inc. plans to develop a shopping center. In the first quarter, the following amounts were spent: Acquisition of land $23,000 Surveys and legal fees 1500 Land clearing 400 Fencing 7000 Install lighting and signage 1860 What amount should be recorded as the cost of the land in the corporation's books?
$24,900
Refer to the following adjusted trial balance after the first year of operations. Accounts Debit Credit Cash $1,900 Accounts Receivable 8,900 Office Supplies 200 Equipment 22,300 Accumulated Depreciation— Equipment $2,000 Accounts Payable 1,000 Salaries Payable 850 Unearned Revenue 400 Common Stock 3,600 Dividends 3,000 Service Revenue 55,150 Salaries Expense 23,000 Supplies Expense 2,000 Depreciation Expense— Equipment 1,700 Total $63,000 $63,000 What will the balance of the Retained Earnings account be after the closing entries are posted?
$25,450
An adjusted trial balance is given below. Debit Credit Cash $13,000 Accounts Receivable 2,000 Prepaid Rent 700 Merchandise Inventory 25,000 Accounts Payable $4,100 Salaries Payable 2,000 Notes Payable 800 Common Stock 8,000 Retained Earnings 3,800 Dividends 1,000 Sales Revenue 86,900 Cost of Goods Sold 23,000 Salaries Expense 18,000 Rent Expense 12,000 Selling Expense 8,500 Delivery Expense 1,800 Supplies Expense 600 Total $105,600 $105,600 What will be the final balance in the corporation's Retained Earnings account after recording the closing entries?
$25,800
Accounts Receivable has a balance of $32,000, and the Allowance for Bad Debts has a credit balance of $3,000. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a $2,100 account receivable is written off?
$29,000; $29,000
Zander Company has fixed costs of $14,000. The company's contribution margin ratio is 46%. What is the breakeven point in sales dollars? (Round your answer to the nearest dollar.)
$30,435
A company purchased 90 units for $20 each on January 31. It purchased 180 units for $25 each on February 28. It sold 180 units for $60 each from March 1 through December 31. If the company uses the first- in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)
$4,050
A company purchased 130 units for $20 each on January 31. It purchased 190 units for $25 each on February 28. It sold 190 units for $60 each from March 1 through December 31. If the company uses the weighted-average inventory costing method, calculate the amount of Cost of Goods Sold on the income statement for the year ending December 31. (Assume the company uses the perpetual inventory system. Round any intermediate calculations two decimal places, and your final answer to the nearest dollar.)
$4,364
Venus Manufacturing uses a predetermined overhead allocation rate based on direct labor cost. At the beginning of the year, it estimated the manufacturing overhead rate to be 30% of the direct labor cost. In the month of June, Venus completed Job 13C and its details are as follows: Direct materials cost $6820 Direct labor cost $26,000 Direct labor hours 31 hours Units of product produced 200 What is the total cost incurred for Job 13C?
$40,620
Milton, Inc. had the following transactions in 2019, its first year of operations: • Issued 8000 shares of common stock. Stock has par value of $0.01 per share and was issued at $40.00 per share. • Earned net income of $200,000. • Paid dividends of $8.00 per share. At the end of 2019, what is total stockholders' equity?
$456,000
The net income of Hollywood Talent Services is $26,000. The beginning and ending stockholders' equity balances were $35,000 and $56,000, respectively. The company issued no common stock. Calculate the amount of dividends.
$5,000
Given the following information, determine the cost of goods manufactured. Direct Labor Incurred $62,000 Manufacturing Overhead Incurred 177,000 Direct Materials Used 151,000 Finished Goods Inventory, Jan. 1 197,000 Finished Goods Inventory, Dec. 31 99,000 Work-in-Process Inventory, Jan. 1 221,000 Work-in-Process Inventory, Dec. 31 108,000
$503,000
The following information was obtained from Durand, Inc.: Advertising Costs $11,600 Indirect Labor 8000 CEO's Salary 470,000 Direct Labor 53,000 Indirect Materials Used 8000 Direct Materials Used 390,000 Factory Utilities 840 Factory Janitorial Costs 1000 Manufacturing Equipment Depreciation 1700 Delivery Vehicle Depreciation 2110 Administrative Wages and Salaries 22,300 How much were Durand's period costs?
$506,010
On March 1, 2018, Mandy Services issued a 3% long-term notes payable for $15,000. It is payable over a 3-year term in $5000 principal installments on March 1 of each year, beginning March 1, 2019. Each yearly installment will include both principal repayment of $5000 and interest payment for the preceding one-year period. What is the amount of total cash payment that Mandy will make on March 1, 2019?
$5450
An invoice of $600 for merchandise purchased is showing 2/15, n/30 as terms of credit. If the invoice is paid on or before the fifteenth day after the invoice date, the amount to be paid is ________.
$588
The following are the current month's balances for selected accounts of Sandlin Marketing Company. Accounts Payable $9,000 Revenue 8,000 Cash 7,650 Expenses 1,100 Furniture 11,000 Accounts Receivable 12,000 Common Stock 10,250 Notes Payable 4,500 What is the net income for Sandlin Marketing for the current month?
$6,900
The financial statements of Carrier Office Furniture Company include the following items: 2019 2018 Cash $42,500 $42,000 Short-term Investments 28,000 19,000 Net Accounts Receivable 102,000 98,000 Merchandise Inventory 166,000 148,000 Total Assets 527,000 547,000 Total Current Liabilities 273,000 285,000 Long-term Note Payable 64,000 60,000 What is working capital for 2019?
$65,500
Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $760,000 and $520,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 8000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)
$65.00 per machine hour
Accounts Receivable has a balance of $8,000, and the Allowance for Bad Debts has a credit balance of $450. The allowance method is used. What is the net realizable value of Accounts Receivable after a $160 account receivable is written off?
$7,550
The following Office Supplies account information is available for Nabors, Inc. Beginning balance $1,100 Office Supplies expensed 7,000 Ending balance 2,000 From the above information, calculate the amount of office supplies purchased.
$7,900
Hudson Landscaping Service bought equipment for $9,600 on January 1, 2019. It has an estimated useful life of five years and zero residual value. Hudson uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2019, the book value of this equipment shown on its balance sheet will be ________.
$8,640
Avia Company sells a product for $150 per unit. Variable costs are $70 per unit, and fixed costs are $1200 per month. The company expects to sell 640 units in September. The unit contribution margin is ________.
$80 per unit
Clay Earth Company sells ceramic pottery at a wholesale price of $5 per unit. The variable cost of manufacture is $2.50 per unit. The fixed costs are $6200 per month. It sold 5700 units during this month. Calculate Clay Earth's operating income (loss) for this month.
$8050
The Assembly Department of Interface, Inc., manufacturer of computers, had 4500 units of beginning inventory in September, and 8000 units were transferred to it from the Production Department. The Assembly Department completed 4000 units during the month and transferred them to the Packaging Department. The weighted-average method is used. Calculate the total number of units to account for by the Assembly Department.
12,500 units
Elephant, Inc.'s cost of goods sold for the year is $2,000,000, and the average merchandise inventory for the year is $129,000. Calculate the inventory turnover ratio of the company. (Round your answer to two decimal places.)
15.50 times
National, Inc. provides the following data: 2019 2018 Cash $45,000 $25,000 Accounts Receivable, Net 138,000 62,000 Merchandise Inventory 70,000 50,000 Property, Plant, and Equipment, Net 200,000 120,000 Total Assets $453,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $250,000 Cost of Goods Sold (110,000) Gross Profit $140,000 Calculate the accounts receivable turnover ratio for 2019. (Round your answer to two decimal places.)
2.50 times
Allstate Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: 2019 2018 Cash and Receivables $75,000 $145,000 Merchandise Inventory 175,000 250,000 Property, Plant and Equipment, net 820,000 710,000 Total Assets $1,070,000 $1,105,000 Total Liabilities $455,000 $405,000 For the vertical analysis, what is the percentage of current assets as of December 31, 2019? (Round your answer to two decimal places.)
23.36%
If 34,000 units are 80% complete with respect to direct materials, then the equivalent units of production for direct materials are ________. The weighted-average method is used.
27,200
A company reports total assets of $910,000 and stockholders' equity of $530,000. Calculate the debt ratio. (Round your answer to two decimal places.)
41.76%
A furniture corporation manufactures two models of furniture—Standard and Deluxe. The total estimated manufacturing overhead costs are $64,200. The following estimates are available: Standard Deluxe Direct materials cost per unit $250 $290 Direct labor cost per unit $125 $140 Number of units 240 600 The company uses direct labor costs as the base to allocate manufacturing overhead. Calculate the predetermined overhead rate. (Round your answer to two decimal places.)
56.32%
Pizza, Inc. provides the following data: 2019 2018 Assets Current Assets: Cash and Cash Equivalents $30,000 $25,000 Accounts Receivable, Net 37,000 62,000 Merchandise Inventory 59,000 50,000 Total Current Assets $126,000 137,000 Property, Plant, and Equipment, Net $124,000 120,000 Total Assets $250,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $510,000 Cost of Goods Sold (160,000) Gross Profit $350,000 Calculate the asset turnover ratio for 2019. There are no cash sales. (Round your answer to two decimal places.) A) 4.05 times B) 1.01 times C) 0.64 times *D) 2.01 times 46. Walton, Inc. provides the following data: 2019 2018 Cash $44,000 $25,000 Accounts Receivable, Net 101,000 62,000 Merchandise Inventory 78,000 50,000 Property, Plant, and Equipment, Net 182,000 120,000 Total Assets $405,000 $257,000 Additional information for the year ending December 31, 2019: Net Credit Sales $550,000 Cost of Goods Sold 150,000 Interest Expense 24,000 Net Income 184,000 Calculate the rate of return on total assets for 2019. (Round your answer to two decimal places.)
62.84%
Hughes Company manufactures harmonicas which it sells for $31 each. Variable costs for each unit are $18 and total fixed costs are $3925. How many units must be sold to earn income of $5500?
725
What does "2/10" mean, with respect to "credit terms of 2/10, n/30"?
A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date.
A business makes a cash payment of $12,000 to a supplier for supplies purchased two weeks earlier. Which of the following accounts is debited?
Accounts Payable
Which of the following is a current asset that is expected to be converted to cash, sold, or consumed during the next year (or the normal operating cycle, if longer)?
Accounts Receivable
Amounts owed for products or services purchased on account are called ________.
Accounts payable
Which of the following accounts will have an ending balance after the closing process is completed?
Accumulated Depreciation
he entry to record depreciation includes a credit to the ________ account.
Accumulated Depreciation
Which of the following accounts will be included in a post-closing trial balance? A) Accumulated Depreciation—Building B) Rent Expense C) Interest Expense D) Service Revenue
Accumulated Depreciation-Building
Which of the following correctly describes the accounting for advertising costs?
Advertising costs are period costs and are expensed as incurred
Which of the following sequences states the order in which accounts are listed on a trial balance?
Assets --> Liabilities --> Equity
Rosewood Corporation purchased land for $100,000 by making a cash payment of $38,000 and promising to pay the remaining amount in a later accounting period. What is the net effect of this transaction on Rosewood's accounting equation?
Assets and liabilities increase by $62,000
Mulberry Corporation collected $16,000 from one of its customers, the amount owed from the previous month. How does this affect the accounting equation for Mulberry?
Assets increase by $16,000; assets decrease by $16,000
Which of the following statements regarding the allowance method of accounting for uncollectible receivables is incorrect ?
Bad debt expense is not estimated
Regarding the double-entry system, which of the following statements is incorrect?
Because of technology, the use of the double-entry system of accounting is optional.
Which of the following formulas represent cost of goods sold for a merchandising business?
Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold
A business collects cash from a customer for services that were performed one month earlier. Which of the following accounts is debited?
Cash
A business makes a cash payment to a supplier on account for office supplies that were purchased earlier. Which of the following accounts is credited?
Cash
Which of the following is the most liquid asset?
Cash
Which of the following accounts will be included in a post-closing trial balance? A) Dividends B) Salaries Expense C) Common Stock D) Supplies Expense
Common Stock
In a job order costing system, a credit to Finished Goods Inventory will be accompanied by a debit to ________.
Cost of Goods Sold
Regarding the Cost of Goods Sold account, which of the following statements is incorrect?
Cost of Goods sold is a contra revenue account.
The entry to record depreciation includes a debit to the ________ account.
Depreciation Expense
Which of the following is true of dividends?
Dividends are a distribution of cash, stock, or other property to stockholders.
On March 1, 2018, Everson Services issued a 4% long-term notes payable for $16,000. It is payable over a 4-year term in $4000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2019. Each yearly installment will include both principal repayment of $4000 and interest payment for the preceding one-year period. On March 1, 2019, ________. The accounting period ends on December 31.
Everson must pay $640 of interest to the note holder
It is mandatory for both the employer and employee to pay ________.
FICA
Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.
Finished Goods Inventory
Revenues and expenses may be transferred to the ________ account before their final transfer into the Retained Earnings account.
Income summary
Which of the following describes the financing activities section of the statement of cash flows?
It includes cash inflows and outflows related to long-term liabilities and equity.
Which of the following describes the operating activities section of the statement of cash flows?
It reports on activities that create revenue or expenses for the entity's business.
Which of the following is a measure of how quickly an item can be converted to cash?
Liquidity
Which of the following should be classified as a long-term asset?
Notes Receivable, due in 5 years
When using the allowance method, the write-off of a receivable ________
Reduces the amount of the Allowance for Bad Debts account
The Income Summary account has a credit balance of $27,000 after the revenue and expense accounts have been closed. Which of the following is credited to close the Income Summary account?
Retained Earnings
Which of the following statements is true of revenues?
Revenues increase equity, so a revenue account's normal balance is a credit balance.
Lamar Corporation originally purchased land for $20,000. It later sold the land for $20,000 in cash. Which of the following is true of the effect of the sale of land on the accounting equation?
The amount of total assets remains the same
Which of the following is true when the estimate of an asset's useful life is changed?
The asset's remaining depreciable book value will be spread over the asset's remaining life.
Which of the following statements is true if a bond's stated interest rate is the same as the market rate?
The bond will be issued at par
Which of the following is a reason why a job order costing system is appropriate for a custom furniture manufacturer?
The cost incurred for each job will differ as per the order specifications.
Which of the following is true of a corporation?
The earnings of a corporation may be subject to double taxation.
The accountant for Barnes Auto Repair, Inc. failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is an effect of this omission?
The net income will be overstated
Regarding net pay, which of the following statements is incorrect?
The net pay amount is not important for accounting purposes.
Which of the following is NOT an assumption of cost-volume-profit (CVP) analysis?
The price per unit changes as volume changes.
In regards to corporate income tax, which of the following statements is incorrect?
When the corporation makes payment for federal income taxes, the account Income Tax Payable is credited
Goods that have been started in the manufacturing process but are not yet complete are included in the ________.
Work-in-Process Inventory account
The Merchandise Inventory account balance is $52,000. A physical count of inventory reveals that the actual inventory balance is $41,000. Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system.)
a $11,000 credit to Merchandise Inventory
Metropolitan Casting Services started the year with total assets of $130,000 and total liabilities of $45,000. The revenues and the expenses for the year amounted to $130,000 and $50,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $60,000. Calculate the amount of increase or decrease in stockholders' equity for the year.
a $20,000 increase
Which one of the following companies is most likely to use job order costing?
a law firm
Companies that manufacture identical items through a series of uniform production steps use ________ to determine the cost per unit produced.
a process costing system
Which of the following businesses is most likely to use a process costing system?
a soda manufacturer
Jones Supply Services paid $350 cash, the amount owed from the previous month, to a materials supplier. Which of the following accounts decrease?
accounts payable
_______ represents a short-term liability created by purchasing "on account."
accounts payable
_______ represent the right to receive cash in the future from customers for goods sold or for services performed.
accounts receivable
An expense that has been incurred but not yet paid is called a(n) ________.
accrued expense
The activities that are included in the operating activities section of the statement of cash flows are ________.
activities that create revenue or expenses
Which of the following is an example of a period cost for a manufacturing company?
advertising expense
The matching principle states that ________.
all expenses should be recorded when they are incurred during the period
A business that accepts payments by credit and debit cards ________.
almost always pays a fee to the processor to cover the processing costs
Property, plant, and equipment are ________.
also called fixed or plant assets
Which of the following will lower the breakeven point?
an increase in the sales price per unit
Outstanding stock represents shares of stock that ________.
are held by the stockholders
Notes receivable ________.
are supported by a promissory note
Colorado Company uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Colorado Company Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase/(Decrease) Accounts Payable $4,000 $6,000 $(2,000) Accrued Liabilities 2,000 1,000 1,000 Long-term Notes Payable 84,000 90,000 (6,000) Total Liabilities $90,000 $97,000 $(7,000) How will the change in Accrued Liabilities be shown on the statement of cash flows?
as an addition to Net Income
For Office Supplies, the category of account and its normal balance is ________.
assets and a debit balance
Newton Corporation settles a liability by making a payment in cash. How does paying this liability affect the accounting equation of the business?
assets and liabilities decrease
When a stockholder contributes land to a corporation in exchange for stock, ________.
assets and stockholders' equity are increased
Country Homes Corporation just recorded a transaction in its books. If this transaction increased the total liabilities by $10,000, then ________.
assets must increase, or equity must decrease by $10,000
The predetermined overhead rate is calculated ________.
before the accounting period begins
If goods are sold on terms FOB shipping point, the ________.
buyer normally pays the transportation costs
Montgomery Equipment Rental Company received $1,000 cash from a customer; the amount was owed to the business from the previous month. What is the effect of this transaction on the accounting equation?
cash increases and accounts receivable increases
Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting?
choosing goals and deciding how to achieve them
The entries that transfer the revenue, expense, and dividends balances to the Retained Earnings account to prepare the company's books for the next period are called ________ entries.
closing
Which of the following best describes horizontal analysis?
comparing financial statement line items from year to year for the same company
The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________.
conversion costs
Which of the following represents the combined sum of direct labor costs and manufacturing overhead costs?
conversion costs
Martinville, Inc. earned revenues of $18,000 and incurred expenses of $4,000. The company declared and paid cash dividends of $3,500. What is the balance in the Income Summary account prior to closing net income or loss to the Retained Earnings account?
credit balance of $14,000
Salaries Payable, Accounts Payable, and Unearned Revenue are examples of ________.
current liabilities
Which of the following items is a measure of a company's ability to collect receivables?
days' sales in receivables
Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?
debit Income Summary and credit Insurance Expense
On September 1, 2018, Real Estate Professionals, Inc. paid $7,000 in advance for an eight-month rental space covering the period of September 1, 2018 through April 30, 2019. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2018 would include a ________.
debit of $3,500 to rent expense
The Golden Company issues $539,000 of 7%, 10-year bonds at 104 on March 31, 2019. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to record the issuance includes a ________. A
debit to Cash for $560,560
On the ________, cash dividends become a liability of a corporation.
declaration date
When the total fixed costs decrease, the breakeven point ________.
decreases
Treasury stock ________.
decreases the number of shares outstanding
If an adjusting entry includes a debit to Rent Expense, it indicates that the payment of rent had been previously recorded as a(n) ________.
deferred expense
The allocation of a plant asset's cost to expense over its useful life is called ________.
depreciation
Which of the following is a product cost?
depreciation on production equipment
The costs most easily traced to each product manufactured are ________.
direct materials and direct labor
Which of the following is a variable cost?
direct materials cost
The matching principle ________.
ensures that all expenses are recorded when they are incurred during the period
The owners' claims to the assets of the business are called ________.
equity
State Street Beverage Company issues $805,000 of 9%, 10-year bonds on March 31, 2017. The bonds pay interest on March 31 and September 30. Which of the following statements is true?
f the market rate of interest is 10%, the bonds will issue at a discount.
Under which of the following inventory costing methods is the ending inventory based on the costs of the most recent purchases?
first-in, first-out
When inventory costs are declining, which of the following inventory costing method will result in the lowest ending merchandise inventory?
first-in, first-out
Which of the following inventory costing methods yields the highest net income during a period of rising inventory costs?
first-in, first-out
Which of the following inventory costing methods yields the lowest cost of goods sold during a period of rising inventory costs?
first-in, first-out
The Work-in-Process Inventory account includes the ________.
goods that are partially completed
The Allowance for Bad Debts account ________.
holds the pool of "unknown" uncollectible accounts
The fixed costs per unit will ________.
increase as production decreases
MacMan, Inc. reported the following data: 2019 2018 Amount Percentage Revenues $6370 $4940 $1430 28.95% Cost of goods sold 3450 2200 1250 56.82% Gross profit 2920 2740 180 6.57% Operating expenses: Sales and marketing expense 710 630 80 12.7% General and administrative expenses 410 425 -15 -3.53% Research and development expense 480 490 -10 -2.04% Other expense 440 710 (270) (38.03)% Total operating expenses 2040 2255 (215) (9.53)% Income before income tax 880 485 395 81.44% Income tax expense 260 240 $20 8.33% Net income (loss) $620 $245 $375 153.06% The horizontal analysis shows that cost of goods sold has ________. (Round your answer to two decimal places.)
increased by 56.82%
When the sales price per unit decreases, the breakeven point ________.
increases
Which of the following will be included in manufacturing overhead costs?
indirect labor and indirect materials used
The activity-based costing system improves the allocation of ________.
indirect manufacturing costs
Patents, copyrights, and trademarks are examples of ________.
intangible assets
The retained earnings of a corporation is ________.
internally generated equity that is earned by profitable operations that is not distributed to stockholders
The profit margin ratio ________.
is often compared to the industry average
The allowance method of accounting for uncollectible receivables ________.
is used to measure bad debts
Which of the following inventory costing methods yields the lowest net income during a period of rising inventory costs?
last-in, first-out
Mitchell Company receives a bill from one of its suppliers for advertising services received and will pay the supplier next month. How does the receipt of the bill from the supplier affect the accounting equation of Mitchell?
liabilities increase and equity decreases
he Salaries Payable account is a(n) ________.
liability account with a normal credit balance
Under which of the following categories would bonds held as an investment for more than a year appear?
long-term assets
The accounting principle that ensures all expenses are recorded during the period when they are incurred and offsets those expenses against the revenues of the period is called the ________ principle.
matching
The matching principle requires businesses to report Warranty Expense ________.
n the same period that the company records the revenue related to that warranty
Adjusting entries are needed to correctly measure the ________.
net income (loss) on the income statement
Contribution margin ratio is the ratio of contribution margin to ________.
net sales revenue
Which of the following is the most appropriate cost driver for allocating the cost of warranty services?
number of service calls
For a manufacturing company, which of the following is a period cost?
office rent
Which of the following is the typical order of the sections on a statement of cash flows?
operating, investing, financing
An account that is not closed at the end of the period is called a(n) ________.
permanent account
Atlanta Company sold equipment for cash. The income statement shows a gain on the sale of $1020. The net book value of the asset was $3710. Which of the following statements describes the cash effect of the transaction?
positive cash flow of $4730 from investing activities
When the total fixed costs increase, the contribution margin per unit ________.
remains the same
The expected value of a depreciable asset at the end of its useful life is called ________.
residual value
________ is the equity earned by profitable operations that is not distributed to stockholders.
retained earnings
Maxwell Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing Services is its ________.
revenue
Which of the following would be considered a period cost for a manufacturing company?
sales salaries
Which of the following will most likely be considered an indirect material cost for a bakery?
spices
Jason Repair Corporation incurred $1,500 as advertising expense and promised to pay the advertising agency within 30 days. Which of the following will decrease as a result of this transaction?
stockholders' equity
To match expenses against revenues means to ________.
subtract expenses incurred during one period from revenues earned during that same period
Preferred stock is stock ________.
that gives its owners certain advantages over common stockholders
Which of the following statements is true if the variable cost per unit increases while the sales price per unit and total fixed costs remain constant?
the breakeven point increases
Which of the following concepts represent the time value of money?
the concept that money earns interest over time
Which of the following would most likely be accounted for using a job order costing system?
the creation of wedding photography portraits
Which of the following sections from the statement of cash flows includes the cash paid for the purchase of Treasury Stock?
the financing activities section
Which of the following sections of the statement of cash flows includes the issuance of stock and the payment of cash dividends?
the financing activities section
Which of the following sections of the statement of cash flows include purchases and sales of long-term assets?
the investing activities section
Which of the following sections of the statement of cash flows include activities that create revenue and expenses of the business?
the operating activities section
Which of the following can be an effect of a transaction that increased an asset of a corporation for the accounting equation to balance?
there is an equal decrease in another asset
Which of the following accounting terms assumes that a business's activities can be divided into small segments and that financial statements can be prepared for specific periods, such as a month, quarter, or year?
time period concept
Which of the following represents the correct flow of accounting data?
transactions occur; source documents are prepared; transactions are analyzed; transactions are journalized and posted
A liability created when a business receives cash from customers in advance of providing services or delivering goods is called a(n) ________.
unearned revenue
Which of the following would be considered a direct labor cost for a manufacturing company?
wages of the assembly line staff
The beginning inventory costs and the product costs of the current period are combined to determine the average cost of equivalent units of production under the ________.
weighted-average method
