financial accounting
The allocation of a plant asset's cost over its useful life is called ________.
depreciation
Which of the following groups of accounts will decrease with a debit?
liabilities and stockholders' equity
Which of the following items should be amortized?
patents, copyrights, trademarks
The par value of stock is
the amount assigned by a company to a share of its stock
Which of the following accounts would appear in the income statement credit column?
service revenue
The amount of net income is transferred from ________ to ________
the income statement; the statement of retained earnings
Which of the following is a reason why many companies require a photo ID when employees pick up their paychecks?
to avoid writing a paycheck to a fictitious person
Where does unearned revenue to be earned in six months appear on the balance sheet?
under current liabilities
Which method results in a higher cost of goods sold
LIFO
he inventory costing method that expenses out the newer purchases of goods is the:
LIFO
A company sold merchandise for $1,000 on account with terms of 2/10, n/30. The company uses a perpetual inventory system. Defective merchandise of $200 was returned 2 days later. If the payment was received after 20 days, the journal entry to record the cash receipt will include
a debit to Cash for $800 and a credit to Accounts Receivable for $800.
Which of the following users would rely on management accounting information for decision−making purposes?
company managers
On October 1, 2015, Android Inc. made a loan to one of its customers. The customer signed a 4minus−month note for $100,000 at 15%. Calculate the total interest earned on the note.
$5,000
Which of the following is an expense resulting from the decline in the utility of a natural resource?
depletion
Which of the following is considered a fiscal year?
12 months
Following is a list of account balances of Wilson Mowing Services as of December 31 of the first year of operation: Accounts receivable $ 5,000 Accounts payable 4,000 Salary expense 5,000 Repairs expense 1,000 Truck 10,000 Equipment 8,000 Notes payable 8,200 Cash 7,500 Supplies expense 1,600 Service revenue 32,000 Gasoline expense 3,800 Salary payable 200
12,400
The balances of select accounts of Sandra Inc. as of December 31, 2015 are given below: Notes Payablelong dash—short term $1,200 Salaries Payable 4,000 Notes Payablelong dash—long term 25,000 Accounts Payable 3,200 Unearned Revenue 2,000 Interest Payable 2,500 The unearned revenue is the amount of cash received for services to be rendered in January, 2016. What are the total current liabilities shown on the balance sheet?
12900
Sunlight Company has assets and equity that amount to $270,000 and $90,000, respectively. Liabilities will b
180,000
On January 1, 2015, Anodel Inc. acquired a machine for $1,000,000. The estimated useful life of the asset is 5 years. Residual value at the end of 5 years is estimated to be $50,000. Calculate the depreciation expense per year using the straight−line method.
190000
Rubal Inc. earned revenue of $400,000 and incurred cost of goods sold of $320,000. Calculate the gross profit percent.
20%
The balance in the Bonds Payable Account is a credit of $68,000. The balance in the Premium on Bonds Payable Account is a credit of $900. How much is the bond carrying amount?
68900
The following are the current month's balances for Toys Galore Inc. Accounts Payable $ 8,000 Revenue 10,000 Cash 5,000 Expenses 1,750 Furniture 12,000 Accounts Receivable 14,000 Common Stock 8,250 Notes Payable 6,500 What is the net income for Toys Galore Inc. for the current month?
8250
Refer to the following list of liability balances at December 31, 2015. Accounts Payable $ 13,000 Employee Health Insurance Payable 450 Employee Income Tax Payable 400 Estimated Warranty Payable 600 Longminus−Term Notes Payable(Due 2019) 33,000 FICAlong dash—OASDI Taxes Payable 560 Sales Tax Payable 370 Mortgage Payable(Due 2020) 6,000 Bonds Payable(Due 2021) 53,000 Current Portion of Longminus−Term Notes Payable 3,500 What is the total amount of longminus−term liabilities?
92000
Which of the following statements is true of accrual basis accounting?
Accrual basis accounting is required by Generally Accepted Accounting Principles (GAAP).
Which of the following is the correct accounting equation?
Assets = Liabilities + Equity
On March 1, 2015, Vantage Services issued a 5% long−term notes payable for $15,000. It is payable over a 3minus−year term in $5,000 principal installments on March 1 of each year, beginning March 1, 2016. Which of the following entries needs to be made at March 1, 2015?
Cash15,000 Long−Term Notes Payable15,000
A company that uses the perpetual inventory system sold goods to a customer for cash for $3,000. The cost of the goods sold was $1,000. Which of the following journal entries correctly records this transaction?
Cash3,000 Sales Revenue3,000 Cost of Goods Sold1,000 Merchandise Inventory1,000
The maturity date for a six−month note issued on January 15 would be
July 15
A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as
Electronic Data Interchange
It is mandatory for both the employer and employee to pay
FICA
Which method results in a higher cost of ending merchandise inventory?
FIFO
Which method results in a higher gross profit?
FIFO
The _________ method will result in the highest net income because under this method, company's gross profit is the ___________
FIFO, highest
Under which of the following terms will the buyer be required to pay transportation costs?
FOB shipping point
The ________ method will result in the lowest income taxes because under this method, company's gross profit is the ____________
LIFO, lowest
Which of the following is included in the internal control procedure documents?
The invoices and orders must be pre-numbered
Which of the following statements is true of a sole proprietorship?
The sole proprietor is personally liable for the liabilities of the business.
The inventory costing method that averages cost changes is the
Weighted-average method
A petty cash fund was established with a $350 balance. It currently has cash of $41 and petty cash tickets totaling $309. Which of the following would be included in the entry to replenish the fund?
a debit to various expenses for $309
Which of the following is a liability account?
accounts payable
The bank recorded a $3,000 deposit as $300. How would this information be included on the bank reconciliation?
addition to bank side
Financial statements are prepared from the balances in a(n) ________.
adjusted trial balance
Which of the following accounts increases with a credit?
common stock
Which of the following accounts will be included in a post−closing trial balance?
common stock
Adjusting journal entries are prepared
after preparing the unadjusted trial balance
Prior period adjustments
are shown on the statement of retained earnings as corrections to the beginning balance
Which of the following is used by both internal and external users to the company?
balance sheet
Which of the following occurs when a stockholder invests cash in a corporation in exchange for stock?
both assets and stockholders' equity are increased
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
closing entries
In a large company, the person who is responsible for comparing cash and the bank balance is the
controller
Lorna Smith decided to start her own CPA practice as a professional corporation, Smith CPA PC. Her corporation purchased an office building for $35,000 that her real estate agent said was worth $50,000 in the current market. The corporation records the building as a $50,000 asset because Lorna believes that is the real value of the building. Which of the following concepts or principles of accounting is being violated?
cost principle
On November 1, 2015, Oster Inc. declared a dividend of $3.00 per share. Oster Inc. has 20,000 shares of common stock outstanding and no preferred stock. Which of the following is the journal entry needed to record the declaration of dividends?
debit Retained Earnings $60,000 and credit Dividends Payable—Common $60,000
The owners' claim to the assets of the business is called
equity
The field of accounting that focuses on providing information for external decision makers is
financial accounting
Corel Sales sold its old office furniture for $5,000. Its original cost was $10,000 and at the time of sale, it had accumulated depreciation of $7,000. What was the effect of the transaction?
gain of 2000
The term "inventory," for a merchandiser, refers to
goods held for sale to customers
On a multi−step income statement, the operating expenses are subtracted from ________ to arrive at operating income.
gross profit
Which of the following is the correct order of preparation of financial statements?
income statement right arrow→ statement of retained earnings right arrow→ balance sheet right arrow→ statement of cash flows
Which of the following is included in the category of other receivables?
interest receivable
Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?
land
After initially recording a transaction, the data is then transferred to the ________.
ledger
A company decides to ignore a very small error in their inventory balance. This is an example of application of the
materiality concept
Which of the following assets must be reported at the lower−of−cost-or−market value?
merchandise inventory
When a bond is sold at a price higher than the face value, the difference is known as a
premium
Which of the following values remains the same irrespective of the inventory valuation method used by a company? Assume the cost of inventory is rising.
purchases
________ represents a debt owed for renting a building currently.
rent payable
The Income Summary account has a credit balance of $25,000 after the revenue and expense accounts have been closed. Which of the following is to be credited to close the Income Summary account?
retained earnings
Which of the following is a source document that provides the evidence and data for accounting transactions?
sales invoice
Which of the following is a liability account?
unearned revenue
Which of the following is an example of an estimable probable contingency?
warranty payable
A bond is issued at premium
when a bond's stated interest rate is higher than the market interest rate
The expense for warranty costs is recorded in the period
when the product is sold
Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share. Common stock, $5 par, 190,000 shares authorized, 140,000 shares issued $700,000 Paid−In Capital in Excess of Par—Common 120,000 Retained earnings 290,000 Total stockholders' equity $1,110,000 After a 2 for 1 stock split, what would be the number of issued shares?
280,000
