question

states that the revenues and related expenses should be reported in the same period

answer

The matching concept

question

when they are incurred, whether or not cash is paid

answer

Using accrual accounting, expenses are recorded and reported only

question

been earned and not recorded as revenue

answer

Prior to the adjusting process, accrued revenue has

question

not yet been recorded as expenses

answer

Deferred expenses have

question

not earned but the cash has been received

answer

Deferred revenue is revenue that is

question

income statement account and one balance sheet account

answer

Adjusting entries affect at least one

question

Interest Expense

answer

Which one of the accounts below would likely be included in an accrual adjusting entry?

question

Unearned Revenue

answer

Which one of the following accounts below would likely be included in a deferral adjusting entry?

question

debit Rent Expense, $8,000; credit Prepaid Rent, $8,000

answer

The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is

question

depreciation

answer

As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called

question

debit Wages Expense; credit Wages Payable

answer

The entry to adjust the accounts for wages accrued at the end of the accounting period is

question

Wages Expense and credit Wages Payable

answer

Data for an adjusting entry described as "accrued wages, $2,020" means to debit

question

used

answer

Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies

question

liabilities

answer

Accrued expenses are ordinarily reported on the balance sheet as

question

Interest Income and Interest Expense

answer

Which of the following pairs of accounts could not appear in the same adjusting entry?

question

$54,000

answer

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is

question

Record wages expense incurred and to be paid next month

answer

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry. Wages Expense 4,500 Wages Payable 4,500 ????????????????

question

Decrease liabilities, increase revenues

answer

How will the following adjusting journal entry affect the accounting equation? Unearned Subscriptions 11,500 Subscriptions earned 11,500

question

Depreciation expense reflects the decrease in market value each year.

answer

Which of the following is not true regarding depreciation?

question

debit Supplies Expense $4,750, credit Supplies $4,750

answer

The balance in the supplies account, before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

question

Salary Expense for the year was understated.

answer

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

question

Depreciation Expense

answer

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the trial balance?

question

In a vertical analysis of an income statement, each item is stated as a percent of total expenses.

answer

All of the following statements regarding vertical analysis are true except:

question

No, decreased by 5%.

answer

PS Enterprises Income Statement For the Years Ended December 31, 2014 and 2013 2014 2013 Fees Earned $674,350 $520,600 Operating expenses 472,045 338,390 Operating income $202,305 $182,210 Prepare a vertical analysis of PS Enterprises' income statements. Has operating income increased or decreased as a percentage of revenue?

question

Net income is overstated by $2,300.

answer

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,000 that expired. For the year ending December 31, what is the effect of these errors on revenues, expenses, and net income?

question

management, creditors, investors

answer

Financial reports are used by

question

GameStop, Best Buy, Gap

answer

Which of the following group of companies are all examples of a merchandising business?

question

Accounting provides information to managers to operate the business and to other users to make decisions regarding the economic condition of the company.

answer

Which of the following is the best description of accounting's role in business?

question

To personally guarantee loans of the business.

answer

Which of the following is not a role of accounting in business?

question

One year

answer

The Sarbanes-Oxley Act of 2002 prohibits employment of auditors by their clients for what period after their last audit of the client?

question

corporation, proprietorship, partnership

answer

For accounting purposes, the business entity should be considered separate from its owners if the entity is

question

$35,000

answer

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is

question

Business Entity Concept

answer

Which of the following concepts relates to separating the reporting of business and personal economic transactions?

question

Assets - Liabilities = Owner's Equity

answer

The accounting equation may be expressed as

question

Owner's Equity

answer

Which of the following is not an asset?

question

$44,000

answer

The assets and liabilities of the company are $128,000 and $84,000, respectively. Owner's equity should equal

question

make a sales offer

answer

Which of the following is not a business transaction?

question

revenue

answer

The monetary value charged to customers for the performance of services sold is called a(n)

question

work is completed on the job

answer

Revenues are reported when

question

assets are used in the process of earning revenue

answer

Expenses are recorded when

question

prepaid expenses

answer

Goods purchased on account for future use in the business, such as supplies, are called

question

accounts receivable

answer

The asset created by a business when it makes a sale on account is termed

question

$159,000 decrease

answer

If total assets decreased by $88,000 during a period of time and owner's equity increased by $71,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is

question

assets increase; liabilities increase

answer

How does the purchase of equipment by signing a note affect the accounting equation?

question

Increase Assets (Cash) and increase Owner's Equity (Clifford Moore, Capital)

answer

Clifford Moore is starting his computer programming business and has deposited in initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected.

question

income statement

answer

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)

question

balance sheet

answer

Which of the following financial statements reports information as of a specific date?

question

I,OE, B

answer

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of owner's equity (OE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

question

balance sheet

answer

Liabilities are reported on the

question

in the order what will be converted into cash.

answer

The asset section of the Balance Sheet normally presents assets in

question

usually a listing of accounts in financial statement order

answer

A chart of accounts is

question

the amount of the debits exceeds the amount of the credits

answer

An account is said to have a debit balance if

question

revenues and liabilities

answer

Which of the following types of accounts have a normal credit balance?

question

revenues

answer

A debit signifies a decrease in

question

increase Supplies Expense with a debit and the normal balance is a debit

answer

Which of the following applications of the rules of debit and credit is true?

question

revenue, credit

answer

Which of the following describes the classification and normal balance of the fees earned account?

question

revenues and liabilities

answer

In which of the following types of accounts are increases recorded by credits?

question

drawing

answer

In which of the following types of accounts are decreases recorded by credits?

question

debit Utilities Expense; credit Accounts Payable

answer

Which of the following entries records the receipt of a utility bill from the water company?

question

Left hand side of the T-Account is called a debit.

answer

Which of the following is true about a T-Account?

question

A list of the accounts is called

answer

A list of the accounts is called

question

meet the information needs of a company and other financial statement users.

answer

The chart of accounts is designed to

question

Cash 40,000 Joshua Scott, Capital 40,000 Invested cash in business

answer

Joshua Scott invests $40,000 into his new business. How would the journal entry for this transaction be entered in the journal?

question

Increase Land and decrease Cash

answer

May 24 Land 105,000 Cash 105,000 Purchased land for business What effects does this journal entry have on the accounts?

question

Accounts Payable, Unearned revenue, Collins Capital

answer

Which of the following accounts would be increased with a credit?

question

revenues (credits) ; expenses (debits)

answer

Net income will result when

question

Revenues ; expenses

answer

Which of the following will increase owner's equity?

question

The normal balance is the side of the account that increases the account.

answer

Which of the following is true regarding normal balances of accounts?

question

Each business transaction will have only two entries.

answer

All of the following occur with a double-entry accounting system except:

question

trial balance

answer

Total dollar amount of the debits equal the total dollar amount of the credits in the ledger can be verified through:

question

date, amount (debit or credit), journal page number

answer

The posting process will include the transfer of the following information from the journal to the account.

question

3

answer

On the journal page 3, the following transaction was found: Prepaid Insurance 1,530 Cash 1,530 What is the post reference that will be found on the cash account?

question

Cash, debit; Wages Expense, credit

answer

An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee. When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make?

question

Supplies, debit; Office Equipment, credit.

answer

Supplies purchased on account were incorrectly recorded as Office Equipment. The correcting entry would be

question

Determine the amount of the error and divide by nine. If the result is evenly divided, then this type of error is likely.

answer

The trial balance is out of balance and the accountant suspects that a transposition or slide error has occurred. What will the accountant do to find the error?

question

preparing a post-closing trial balance

answer

In the accounting cycle, the last step is

question

The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the accounts.

answer

What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance?

question

verify that the debits and credits are in balance.

answer

Once the adjusting entries are posted, the Adjusted Trial Balance is prepared to

question

either the adjusted trial balance or the income statement columns of the work sheet.

answer

The income statement is prepared from:

question

Net Income $3,580

answer

Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine the net income (loss) for the period.

question

$21,930

answer

Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine total assets.

question

Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last

answer

The Income Statement will include the following accounts

question

Current Liabilities and Long-Term Liabilities

answer

The classified Balance Sheet will divide its Liabilities Section as the following subsections

question

the net income or (loss) for the period.

answer

After posting the second closing entry to the income summary account, the balance will be equal to

question

Revenues, expenses, income summary, drawing account

answer

There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____.

question

Fees Earned

answer

Which of the accounts below would be closed by posting a debit to the account?

question

debit Income Summary; credit Insurance Expense

answer

The entry to close the appropriate insurance account at the end of the accounting period is

question

Unearned Rent

answer

Which of the following accounts ordinarily appears in the post-closing trial balance?

question

$15,000

answer

A summary of selected ledger accounts appear below for Alberto's Plumbing Services for the current calendar year end. Alberto, Capital 12/31 8,500 1/1 6,500 12/31 15,000 Alberto, Drawing 6/30 3,500 12/31 8,500 11/30 5,000 Income Summary 12/31 18,500 12/31 33,500 12/31 15,000 Net income for the period is

question

$600

answer

Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $7,200 and recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense during the adjusting process at the end of Amir's first month of operations on March 31st?

question

Unadjusted, adjusted, post-closing

answer

The accounting cycle requires three trial balances be done. In what order should they be prepared?

question

ordinarily begins on the first day of a month and ends on the last day of the following twelfth month

answer

A fiscal year

question

adjusting entries

answer

A work sheet includes columns for

question

debit column of the Balance Sheet columns

answer

A net loss appears on the work sheet in the

question

equal each other

answer

After net income is entered on the work sheet, the Balance Sheet debit and credit columns must

question

The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet.

answer

Which of the statements below indicates that a company earned a net income for the period?

question

Net loss

answer

Which of the items below would appear in the Income Statement columns of the work sheet?

question

accounting

answer

A(n) ___________ system is the methods and procedures for collecting, classifying, summarizing and reporting a business's financial and operating information.

question

review

answer

Which of the following is not one of the three phases needed when changing an accounting system, either in its entirety or in part?

question

information needs

answer

The goal of systems analysis is to determine

question

Feedback

answer

After an accounting system has been set up, what is the next step?

question

subsidiary ledger

answer

Every controlling account must have its own

question

debit to Accounts Receivable and a credit to Fees Earned

answer

At the end of the month, the total of the amount column of the revenue journal is posted as a

question

Accounts Receivable

answer

The controlling account in the general ledger that summarizes the debits and credits to the individual customers accounts in the subsidiary ledger is entitled

question

Cash Payments journal

answer

A purchase of supplies for cash is recorded in the

question

Purchases journal

answer

A purchase of supplies on account is recorded in the

question

purchase of store supplies on account

answer

Which of the following transactions is recorded in the purchases journal?

question

Accounts Payable

answer

When posting a column total in the purchases journal, a credit should be posted to

question

General journal

answer

In which journal would an adjustment for an overcharge by a creditor be recorded?

question

correction of error in billing client

answer

Which of the following is always recorded in the general journal?

question

payment of employees' salaries

answer

Which of the following is recorded in the cash payments journal?

question

General journal

answer

In which journal is the return of supplies purchased on account recorded?

question

Accounts Payable

answer

When posting the column totals of a cash payments journal, a debit should be posted to

question

cash receipts journal

answer

A cash investment made by the owner should be recorded on the

question

cash receipts journal

answer

In which journal would you find cash revenues recorded?

question

purchases on account

answer

Which transaction is normally recorded in a special journal?

question

the quantity and design depend on the needs of the company

answer

If a company uses special journals

question

record and post transactions at the same time

answer

Computerized accounting systems

question

Cash Dr. $18, Food Revenue Cr. $18

answer

Beachside Coffee Shop, in an effort to stream line its accounting system, has decided to utilize a Cash Receipts Journal in its operation. If the company is to record the cash sale of food for $18 which is the correct entry?

question

Processing a transaction that has unequal debits and credits.

answer

A computerized accounting system will not allow which of the following type of journalizing error?

question

Business to consumer

answer

What is meant by the term B2C?

question

30.0%

answer

Waller Company does business in two regional segments: North and South. The following annual revenue information was determined from the accounting system's invoice information: Segment 2014 2013 North $ 75,000 $100,000 South 260,000 200,000 Total revenues $335,000 $300,000 Using horizontal analysis, determine the percentage change in revenues for the South region. Round to one decimal place.

question

sales

answer

Generally, the revenue account for a merchandising business is entitled

question

merchandise held for sale in the normal course of business

answer

The term "inventory" can indicate

question

administrative expense

answer

Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?

question

single-step statement

answer

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

question

debit to Merchandise Inventory

answer

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

question

credit memo

answer

If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a

question

credit terms

answer

The arrangements between buyer and seller as to when payments for merchandise are to be made are called

question

sales

answer

Which of the following accounts has a normal credit balance?

question

debit to Sales Returns and Allowances

answer

The entry to record the return of merchandise from a customer would include a

question

cash sales

answer

Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as

question

debit Cost of Merchandise Sold; credit Merchandise Inventory

answer

In recording the cost of merchandise sold for cash, based on data available from perpetual inventory records, the journal entry is

question

A credit to Sales Tax Payable for $350.

answer

Merchandise is sold for cash. The selling price of the merchandise is $5,000 and the sale is subject to a 7% state sales tax. The journal entry to record the sale would include

question

FOB shipping point

answer

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are

question

Accounts Payable-Emma Co., debit $15,750; Merchandise Inventory, credit $300; Cash, credit $15,450

answer

Emma Co. sold Isabella Co. merchandise on account FOB shipping point,, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record payment of the merchandise if Isabella Co. pays within the discount period?

question

usually requires more accounts than does the chart of accounts for a service business

answer

A chart of accounts for a merchandising business

question

May 30

answer

Isaac Co. sells merchandise on credit to Sonar Co in the amount of $9,600. The invoice is dated on April 15 with terms of 1/15, net 45. If Sonar Co. chooses not to take the discount, by when should the payment be made?

question

quantity discounts, cash discounts, freight-in

answer

Which of the following items would affect the cost of merchandise inventory acquired during the period?

question

accounting records continuously disclose the amount of inventory

answer

Under a perpetual inventory system

question

purchased units in transit, shipped FOB destination

answer

Which of the following items should not be included in the cost of ending merchandise inventory?

question

there is a difference between a physical count of inventory and inventory records.

answer

Inventory shortage is recorded when

question

Cost of Merchandise Sold debit $5,000; Merchandise Inventory credit $5,000.

answer

If the physical count of the inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shortage?

question

2.92

answer

Cleary Company had total Sales of $550,000; Sales Discounts of $10,000; Sales Returns of $40,000 and Cost of Merchandise Sold of $200,000 during 2010. The total asset balance at the beginning of the year was $175,000 and at the end of the year was $167,000. Calculate the ratio of net sales to total assets (Round answer to 2 decimal points).

question

No entry is made.

answer

Under the periodic inventory system, the journal entry to record the cost of merchandise sold at the point of sale will include the following account

question

Jan 1 Purchases 1,600 Accounts Payable 1,600

answer

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be:

question

162,750

answer

Calculate income from operations for Jonas Company based on the data given below: Sales $764,000 Selling Expenses 52,500 Cost of Merchandise Sold 538,000 Sales Discounts 7,100 Sales Returns and Allowances 3,650

question

inventory ledger

answer

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

question

first-in, first-out

answer

When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

question

FIFO and LIFO

answer

The two most widely used methods for determining the cost of inventory are

question

first-in, first-out

answer

Cost flow is in the order in which costs were incurred when using

question

FIFO

answer

The inventory costing method that reports the most current prices in ending inventory is

question

Gordon's Jewelers

answer

Which of the following companies would be more likely to use the specific identification inventory costing method?

question

perpetual

answer

Under the _________ inventory method, accounting records maintain a continuously updated inventory value.

question

$590

answer

Nov. 1 Inventory 20 units at $19 4 Sold 10 units 10 Purchased 30 units at $20 17 Sold 20 units 30 Purchased 10 units at $21 Using a perpetual system, what is the cost of the merchandise sold for November if the company uses LIFO?

question

1,150

answer

Beginning inventory 10 units at $55 First purchase 25 units at $60 Second purchase 30 units at $65 Third purchase 15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The value of ending inventory using LIFO is:

question

$1,263

answer

Beginning inventory 10 units at $55 First purchase 25 units at $60 Second purchase 30 units at $65 Third purchase 15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The value of ending inventory using average cost is:

question

$620

answer

The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at $30 First purchase 25 units at $32 Second purchase 30 units at $34 Third purchase 10 units at $35 The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the LIFO method?

question

$690

answer

Beginning inventory 10 units at $30 First purchase 25 units at $32 Second purchase 30 units at $34 Third purchase 10 units at $35 The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the FIFO method?

question

$1,380

answer

Beginning inventory 5 units at $61 First purchase 15 units at $63 Second purchase 10 units at $74 Third purchase 10 units at $77 The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of cost of good sold for the year according to the average cost method?

question

$1,805

answer

Beginning inventory 10 units at $60 First purchase 25 units at $65 Second purchase 30 units at $68 Third purchase 15 units at $75 The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the FIFO method?

question

$1,685

answer

Beginning inventory 10 units at $60 First purchase 25 units at $65 Second purchase 30 units at $68 Third purchase 15 units at $75 The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the average cost method?

question

LIFO will result in higher income taxes than FIFO.

answer

During times of rising prices, which of the following is not an accurate statement?

question

Understated

answer

If the revenues are correctly reported and the Gross Profit of a company is understated, what is the effect on Owner's Equity?

question

FIFO

answer

If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

question

FIFO method

answer

During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory.

question

net income is understated

answer

Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

question

number of days' sales in inventory

answer

Which of the following measures the length of time it takes to acquire, sell and replace inventory?

question

$40,000

answer

Garrison Company uses the retail method of inventory costing. They started the year with an inventory that had a retail cost of $45,000. During the year they purchased an inventory with a retail cost of $300,000. After performing a physical inventory, they calculated their inventory cost at retail to be $80,000. The mark up is 100% of cost. Determine the ending inventory at its estimated cost.

question

monitoring policies

answer

A firm's internal control environment is not influenced by

question

risk assessment

answer

An element of internal control is

question

information and communication

answer

A necessary element of internal control is

question

asset with a debit balance

answer

The cash account in the company's ledger is a(n)

question

remittance advice

answer

The notification accompanying a check that indicates the specific invoice being paid is called a

question

voucher

answer

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

question

can process certain cash transactions at less cost than by using the mail

answer

EFT

question

The functions of record keeping and maintaining custody of cash should be combined.

answer

Which of the following is not an internal control activity for cash?

question

a liability

answer

On the bank's accounting records, customers' accounts are normally shown as

question

a promissory note left for collection

answer

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is

question

addition to the balance per the company's records

answer

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)

question

book errors

answer

Journal entries based on the bank reconciliation are required in the company's accounts for

question

a deduction from the balance per company's records

answer

Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is

question

addition to the balance per bank statement

answer

The amount of deposits in transit is included on the bank reconciliation as a(n)

question

deduction from the balance per bank statement

answer

The amount of the outstanding checks is included on the bank reconciliation as a(n)

question

deposits in transit

answer

Which of the following items that appeared on the bank reconciliation did not require an adjusting entry?

question

$4,970

answer

Cash balance per books, 5/31 $4,500 Deposits in transit 375 Notes receivable and interest collected by bank 650 Bank charge for check printing 40 Outstanding checks 2,400 NSF check 140 The adjusted cash balance per books on May 31 is

question

$3,060.

answer

Cash balance per books, 9/30 $2,750 Deposits in transit 200 Notes receivable and interest collected by bank 630 Bank charge for check printing 30 Outstanding checks 1,250 NSF check 290 The adjusted cash balance per books on September 30 is

question

subtract both values from balance according to books.

answer

In the normal operation of business you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $775 is "NSF". The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will:

question

asset, debit

answer

The type of account and normal balance of Petty Cash is a(n)

question

various accounts for which the petty cash was disbursed

answer

The debit recorded in the journal to reimburse the petty cash fund is to

question

Cash for $120.

answer

A $140 petty cash fund has cash of $20 and receipts of $117. The journal entry to replenish the account would include a credit to

question

will be converted to cash within 90 days

answer

Cash equivalents

question

compensating balance

answer

A minimum cash balance required by a bank is called

question

$57,200

answer

Consider the cash account below. Additional Information: cash disbursements were 80% of collections. ?? Beg. Balance 115,375 Collections ?? Disbursements 80,275 End Balance How much was the Beginning Balance of the Cash Account?

question

there is no general rule for when an account becomes uncollectible

answer

When does an account become uncollectible?

question

direct write-off method

answer

The two methods of accounting for uncollectible receivables are the allowance method and the

question

when an account is determined to be worthless.

answer

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

question

Uncollectible Accounts Expense.

answer

An alternative name for Bad Debt Expense is

question

Accounts Receivable

answer

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

question

violates the matching principle

answer

One of the weaknesses of the direct write-off method is that it

question

Allowance for Doubtful Accounts

answer

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

question

Contra asset, credit

answer

What is the type of account and normal balance of Allowance for Doubtful Accounts?

question

debit to Bad Debt Expense for $7,200.

answer

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a

question

debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600

answer

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000. Which of the following entries records the proper adjusting entry for bad debt expense?

question

debit to Accounts Receivable

answer

Using the allowance method of accounting for uncollectible receivables, the entry to reinstate a specific receivable previously written off would include a

question

there is no effect on total current assets or total expenses

answer

A company uses the allowance method to account for uncollectible accounts receivables. When the firm writes off a specific customer's account receivable

question

debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200

answer

Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900. Which of the following adjusting entries is needed to record the Bad Debt Expense for the year?

question

$750

answer

When using the allowance method to estimate uncollectible accounts receivable based on an analysis of receivables shows that $640 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $110. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:

question

affects only balance sheet accounts.

answer

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

question

A credit to Allowance for Doubtful Accounts

answer

When a company uses the allowance method of accounting for uncollectible receivables, the entry to reinstate a previously written off account would include:

question

fair value of the note

answer

Interest on a note can be calculated without knowledge of the

question

debit Notes Receivable; credit Accounts Receivable

answer

The journal entry to record a note received from a customer to replace an account is

question

Notes Receivable 6,000 Accounts Receivable—Dame Company 6,000

answer

Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note?

question

$40,400

answer

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

question

credit to Interest Revenue for $300

answer

On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were $20,000 face value and 6% interest. On October 30, the journal entry to record the collection of the note should include a

question

of liquidity

answer

Current assets are usually listed in order

question

how frequently during the year the accounts receivable are converted to cash

answer

Accounts Receivable Turnover measures

question

6.75

answer

Given the following information, compute Accounts Receivable Turnover: Gross Sales: $150,000 Accounts Receivable, Beginning of Year: $18,000 Net Sales: $135,000 Accounts Receivable, End of Year: $22,000

question

$525,000

answer

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000. Determine the net realizable value of accounts receivable after adjustment. (Hint: Determine the amount of the adjusting entry for bad debt expense and the adjusted balance Allowance of Doubtful Accounts.)

question

investment

answer

Land acquired so it can be resold in the future is listed in the balance sheet as a(n)

question

is a contra asset account

answer

Accumulated Depreciation

question

$160,000

answer

A building with an appraisal value of $154,000 is made available at an offer price of $172,000. The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is

question

an asset account

answer

A capital expenditure results in a debit to

question

replacing an engine in a company car

answer

Which of the following below is an example of a capital expenditure?

question

units produced

answer

All of the following below are needed for the calculation of straight-line depreciation except

question

$18,750

answer

A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

question

net book value

answer

Residual value is also known as all of the following except

question

initial cost - residual value

answer

The formula for depreciable cost is

question

(depreciable cost / estimated output) * the actual yearly output

answer

The calculation for annual depreciation using the units-of-production method is

question

$ 9,600

answer

Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. Determine the 2nd year's depreciation using straight-line depreciation.

question

Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.

answer

Which of the following is true?

question

$24,000

answer

An asset was purchased for $120,000 on January 1, 2010 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of 2012, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate the 2012 depreciation expense using the revised amounts and straight line method.

question

$50,000

answer

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000. Assuming a trade-in allowance of $4,000, the cost basis of the new asset is

question

$2,000 gain

answer

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

question

debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Disposal

answer

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry (assuming the exchange was considered to have commercial substance):

question

Equipment Cr. $310,000

answer

On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $310,000 with an accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.

question

Loss of $30,000

answer

On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $310,000 with an accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $20,000. What is the amount of the gain or loss on this transaction?

question

Loss of $19,000

answer

On December 31, Strike Company has decided to trade-in one of its batting cages for another one that has a cost of $500,000. The seller of the batting cage is willing to allow a trade-in amount of $11,000. The initial cost of the old equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction?

question

book value of the replaced component is written off to depreciation expense

answer

When a company replaces a component of property, plant and equipment, which statement below does not account for one of the steps in the process?

question

reported on the balance sheet as a deduction from the cost of the mineral deposit

answer

The accumulated depletion account is

question

depletion

answer

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

question

amortization

answer

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

question

$17,500

answer

On June 1, 2014, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours. Using straight line depreciation, calculate depreciation expense for the first year.

question

$30,000

answer

On June 1, 2014, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours. Using straight line depreciation, calculate depreciation expense for the second year.

accounting 1 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards