Chapter 5 and 6 Accounting 201 Davenport – Flashcards
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An accounting system must be able to A report information. B All of these choices are correct. C record financial information. D organization information.
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B
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The best definition for processing systems is the A means by which the system collects, summarizes, and reports accounting information. B policies and procedures that protect assets from misuse. C policies that employees must follow while working in the company. D procedures used by managers in dealing with disruptive employees.
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A
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The process in the evolution of an accounting system that determines how the system should provide information and meet the users' needs is the ______________ stage. A implementation B design C analysis D feedback
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B
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The subsidiary ledger that tracks customers is the A accounts payable ledger. B inventories ledger. C accounts receivable ledger D general ledger.
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C
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. What column would be used in a purchases journal for a lawn service company? A Accounts payable debit B Accounts receivable debit C Accounts payable credit D Accounts receivable credit
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C
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All of the following are examples of subsidiary ledgers except: A creditors ledger. B equipment ledger. C customers ledger. D general ledger.
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D
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An advantage of using a computer system is A the simultaneously updating of customer or vendor subsidiary ledgers. B All of these choices are correct. C not having to authorize transactions. D not having to run several reports.
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A
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A computerized accounting system A can be used to report only special reports that are too difficult to prepare manually. B is used to enter only unique information. C allows the generation of several types of reports to meet the needs of stakeholders. D collects data which is retrieved to enter information.
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C
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An advantage of using a computer system is A simplified data entry. B All of these choices are correct. C more accurate information. D the ease of report creation.
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B
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E-commerce refers to using A the Internet to perform business transactions. B the Internet to check on price changes. C computers to perform accounting operations. D computers to send information to stakeholders.
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A
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Internet applications to plan and coordinate marketing and sales efforts are known as A customer relationship management. B cloud software management. C supply chain management. D product life-cycle management.
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A
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. The Internet is being used by businesses for supply chain management (SCM), which can be defined as A internet applications to plan and coordinate marketing and sales efforts. B streamlining purchases and payments by automating transactions and eliminating paperwork. C internet applications to plan supply needs and coordinate suppliers. D internet applications to plan and coordinate the product development and design process
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C
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When reporting segment revenue, businesses can be segmented by A product or service. B All of these choices are correct. C region. D type of customer.
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B
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Stevens Company does business in two regional segments: Black and Rose. The following annual revenue information was determined: Segment Black 2014:$65,000 2013: $60,000 Rose 2014: 70,000 2013: 80,000 Total revenues 2014: $135,000 2013: $140,000 Using vertical analysis, what is revenue as a percent of total revenues for the Rose region in 2014 (rounded to the nearest one decimal place)? A 48.1% B 57.1% C 42.9% D 51.9%
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D
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Leggett Company does business in two regional segments: Mountains and Plains. The following annual revenue information was determined: Segment Mountains 2014: $45,000 2013: $40,000 Plains 2014: 50,000 2013: 60,000 Total revenues 2014: $95,000 2013: $100,000 Using vertical analysis, what is revenue as a percent of total revenues for the Plains region in 2013? A 47.4% B 60.0% C 40.0% D 52.6%
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B
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Which of the following is not true regarding segment analysis? A Segment analysis helps determine the amount of revenue earned by each segment. B Segment analysis dictates total operating performance of a company. C Segment analysis helps analyze the contributions of various segments to the total operating performance of a company. D Segment analysis helps determine the increases and/or decreases over a time period of each segment.
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B.
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Merchandise inventory is reported as a(n) A long-term asset. B current liability. C current asset. D expense
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C
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The operating cycle of a business is comprised of A purchase activity. B sales activity. C collection activity. D All of these choices are correct.
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D
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. Gross profit is A profit after deducting other expenses. B profit after deducting operating expenses. C profit before deducting operating expenses. D None of these choices are correct.
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C
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Cost of merchandise sold is reported as a(n) A long-term asset. B current liability. C current asset. D expense.
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D
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Garden Company purchased merchandise on account from Parker Company for $88,000 with terms 1/15, net 45. Garden Company returned $12,000 of the merchandise and received full credit from Parker Company. If Garden Company pays within the discount period, what is the amount of cash required for payment? A $88,000 B $76,000 C $75,240
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C
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Garden Company sold merchandise to Mamouth Industries on account for $3,450 with terms 2/10, n/30. The cost of merchandise sold was $1,850. Garden Company refunded Mamouth Industries $900 for returned merchandise. The cost of merchandise sold was $600. Which of the following will be recorded by Mamouth Industries in the journal entry for the return using the perpetual inventory system? A Credit to Accounts Payable, $882. B Debit to Merchandise Inventory, $600. C Credit to Merchandise Inventory, $882. D Debit to Accounts Payable, $600.
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C
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The Geo Company sold merchandise on account for $35,000 with terms 2/10, n/30. The cost of merchandise sold was $27,600. Which of the following journal entries will be recorded for the sale of merchandise? A Debit to Accounts Receivable, $35,000; credit to Sales, $35,000 B debit to Accounts Receivable, $34,300; credit to Sales, $34,300 C Debit to Cash, $35,000; credit to Sales, $35,000 D Debit to Cash, $34,300; credit to Sales, $34,300
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B
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In a perpetual inventory system A each purchase and sale of inventory is recorded in the inventory account. B the amount of inventory for sale and the amount sold are not listed in the inventory account. C the inventory records cannot be computerized. D None of these choices are correct.
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A
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Sales less cost of merchandise sold is A income from operations. B net profit. C gross profit. D gross sales.
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C
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Income from operations is gross profit A less cost of merchandise sold. B less operating expenses. C less inventory. D plus cost of merchandise sold.
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B
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Determine the income from operations using the following information: Sales: $680,200 Cost of merchandise sold: 504,000 Selling expenses: 50,400 Administrative expenses: 25,000 A $125,800 B $176,200 C $680,200 D $100,800
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D
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Determine net income using the following amounts: rent revenue is $1,560; interest expense is $2,970; and income from operations is $75,120. A $73,710 B $76,530 C $70,590 D $79,650
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A
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The fourth closing entry is to close the owner's drawing account to A the miscellaneous expense account. B the income summary account. C the owner's capital account. D None of these choices are correct.
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C
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After the first two closing entries have been posted, Income Summary has a debit of $153,690 and a credit of $98,475. Which of the following is true? A Total expenses equal $98,475. B Net loss equals $55,215. C Total revenues equal $153,690. D Net income equals $55,215.
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B
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The inventory records of Global Company indicate that $76,800 of merchandise should be on hand at the end of the month. The physical inventory indicates that $74,900 is actually on hand. The journal entry to adjust inventory shrinkage will include A a debit to Cost of Merchandise Sold for $1,900. B a debit to Merchandise Inventory for $74,900. C a debit to Merchandise Inventory for $1,900. D None of these choices, since no entry is needed.
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A
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After the second closing entry is posted, Income Summary is equal to A merchandise inventory. B gross profit. C cost of merchandise sold. D net income or loss.
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D
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The difference between a service company's and a merchandising company's income statements is that the merchandising company includes A operating expenses. B revenues. C cost of merchandise sold. D net income.
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C
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During the month, merchandise is sold for $80,500 cash and for $119,000 on account. The cost of merchandise sold is $101,500. What is the amount of gross profit? A $80,500 B $98,000 C $119,000 D $199,500
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B
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During the month, merchandise is sold for $23,500 cash and for $34,000 on account. The cost of merchandise sold is $41,500. What is the amount of gross profit? A $41,500 B $57,500 C $23,500 D $16,000
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D
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Global Company purchased merchandise on account from Planet Company for $56,000 with terms 1/15, net 45. Global Company returned $6,000 of the merchandise and received full credit from Planet Company. Which of the following will be included in the journal entry for the payment (assume that the amount due was paid within the discount period)? A Debit to Accounts Payable, $56,000 B Credit to Cash, $55,440 C Credit to Cash, $49,500 D Debit to Purchases, $56,000
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C
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Global Company sold merchandise to Montana Industries for cash, $3,450. The cost of merchandise sold was $1,850. Global Company refunded Montana Industries $900 for returned merchandise. The cost of merchandise sold was $600. Which of the following will be recorded by Global Company in the journal entry for the refund from the sale? A Debit to Cash, $600 B Debit to Customer Refunds Payable, $900 C Customer Refunds Payable, $900 D Credit to Accounts Receivable, $600
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B
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Gross profit is sales A plus cost of merchandise sold. B less cost of merchandise sold. C less inventory. D less operating expenses.
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B
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Determine the income from operations using the following information: Sales: $340,100 Cost of merchandise sold: 252,000 Selling expenses: 25,200 Administrative expenses: 12,500 A $340,100 B $88,100 C $62,900 D $50,400
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D
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The second closing entry for a merchandising business will include which of the following? A Sales. B Drawing. C Cost of Merchandise Sold. D Capital.
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C
