financial accounting hw 1
Internal Revenue Service
External users
Selecting economic activities relevant to the company.
Identifies
A business pays weekly salaries of $30500 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on a Wednesday is
debit Salaries and Wages Expense, $18300; credit Salaries and Wages Payable, $18300.
Sunland Supplies Inc. purchased a 12-month insurance policy on March 1, 2022 for $16200. At March 31, 2022, the adjusting journal entry to record expiration of this asset will include a
debit to Insurance Expense and a credit to Prepaid Insurance for $1350.
What does it cost us to manufacture each unit produced?
internal users
How often must FICA taxes and federal income tax (FIT) be reported?
quarterly
Employees who have physical custody of assets do not have access to the accounting records
segregation of duties
computer repair business
service
interior design firm
service
Employees at Swifty Corporation are paid $14100 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Tuesday, December 31. How much salaries and wages expense should be recorded on December 31?
$5640
A bakery shop makes a large sale for $1240 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The bakery shop follows GAAP and applies the revenue recognition principle. When is the $1240 considered to be recognized?
November 30
The purchaser of merchandise debits Sales Discounts when payment is remitted within the discount period.
false
To grant a customer a sales return, the seller credits Sales Returns and Allowances.
false
Roger Holloway, owner of Roger's Photography, records his personal living costs as expenses of the business.
incorrect / economic entity assumption
Do we need to borrow in the near future?
internal users
Securities and Exchange Commission
internal users
Which product should we emphasize?
internal users
marketing manager
internal users
pharmacy
merchandising
sporting goods store
merchandising
The department that should pay the payroll is the:
treasurer's department.
A debit memorandum could explain a service fee that the bank charges.
true
Adjusting entries are often made because some business events are not recorded as they occur.
true
A credit sale of $750 is made on June 13, terms 2/10, net/30. A return of $50 is granted on June 16. The amount received as payment in full on June 23 is:
$686
Andy Manion earns $14 per hour for a 40-hour week and $21 per hour for any overtime work. If Manion works 45 hours in a week, his gross earnings are:
= $ 14 * $ 40 + $ 21 * 5 = $ 560 + $ 105 = $ 665
The sales accounts that normally have a debit balance are:
Both Sales Discounts and Sales Returns and Allowances.
Explaining uses, meaning, and limitations of data.
Communicates
Preparing accounting reports.
Communicates
Reporting information in a standard format.
Communicates
What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $18460, and unexpired amounts per analysis of policies of $6110?
Debit Insurance Expense, $12350; Credit Prepaid Insurance, $12350.
A prenumbered shipping document is prepared for each shipment of goods to customers.
Documentation Procedures
Which one of the following is not an objective of a system of internal controls?
Enhance the fairness of the financial statements
Customers
External users
Each month, the assets on hand are compared to the accounting records by an internal auditor.
Independent Internal verification
Which of the following is not an element of the fraud triangle?
Internal verification
When paying freight on goods purchased, a buyer using the perpetual inventory system should debit
Inventory only.
Classifying economic events.
Records
Keeping a systematic chronological diary of events.
Records
Measuring events in dollars and cents.
Records
Summarizing economic events.
Records
Ivanhoe Market has total receipts of $42400, which include sales tax of 6%. Ivanhoe should record
Sales Taxes Payable of $2400 42400-40000
Which of the following would not be considered a merchandising company?
Service firm
Which is not one of the three parties involved when national credit cards are used in retail sales?
Supplier
Which of the following is not an example of fraud involving payroll?
Using prenumbered checks to pay employees.
In a bank reconciliation, deposits in transit are:
added to the bank balance
Employee voluntary payroll deductions include which of the following?
charity
Analyzing and interpreting information.
communicate
The Sales Returns and Allowances account and the Sales Discounts account are classified as:
contra revenue accounts.
Kingston Company includes in its accounting records only transaction data that can be expressed in terms of money.
correct / monetary unit assumption
On May 25, Mt. Sheridan Company received a $520 check from Douglas Fir for services to be performed in the future. The bookkeeper for Mt. Sheridan Company incorrectly debited Cash for $520 and credited Accounts Receivable for $520. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:
debit Accounts Receivable $520 and credit Unearned Service Revenue $520.
The balance in the Prepaid Rent account before adjustment at the end of the year is $25200, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is to
debit Rent Expense, $8400; credit Prepaid Rent, $8400.
The expense recognition principle matches
expenses with revenues
Did the company earn a satisfactory income?
external users
How does the company's profitability compare to other companies?
external users
Labor unions
external users
Will the company be able to pay its short-term debts?
external users
suppliers
external users
FOB Destination means the buyer pays the freight costs.
false
Most purchases are for cash.
false
Only deposits can be made at an ATM.
false
Sales minus operating expenses equals gross profit.
false
The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.
false
Tisinai Company owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Tisinai reports the buildings at fair value in its accounting reports.
incorrect / historical cost principle
Can we afford to give our employees a pay raise?
internal users
production supervisors
internal users
store manager
internal users
vice president of finance
internal users
furniture factory
manufactoring
chemical plant
maufacturing
A special endorsement on a check allows the check to be deposited to another person's bank account.
true
Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.
true
The routing number is a 9-digit number at the bottom of each check.
true
