Saylor Academy: Intro to Financial Accounting - Flashcards

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TRY $2,000, $1,000 NOT 1,500, $1,500

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Ladron Engineering produced the following partial trial balance before making adjusting entries. Following the production of this trial balance, Ladron made adjusting entries for the following: · Two-thirds of the supplies were still available in the supply room. · Ladron had performed services to earn one half of the unearned fees. · Ladron's new employee worked the last five days of the month for $100/day; payroll would be issued on the 5th day of August. AFTER THE NECESSARY ADJUSTING ENTRIES, WHAT WILL BE THE BALANCES IN SUPPLIES AND SUPPLIES EXPENSE, RESPECTIVELY? IMAGE

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Information has this characteristic when it reveals differences and similarities that are real and are not the result of differing accounting treatments

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Comparability

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Requires disclosure of all significant information in a way that aids understanding and is not misleading

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Completeness

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States that once an accounting principle or method is adopted, it should be consistently followed in future accounting periods and only changed if the new version in some way improves reported financial results

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Consistency

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When information reveals the relative success of users in predicting outcomes

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Feedback value

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Information important enough to influence the decision of an informed user of the financial statements should be published

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Full disclosure principle

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Gains may be recorded only when realized, but losses should be recorded when they first become evident

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Gain and loss recognition principle

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A fundamental assumption under which financial statements are prepared; assumes a business will continue to operate in the foreseeable future without the need to liquidate the entity or curtail its operational activities. It is assumed that the entity will realize its assets and settle its obligations in the normal course of the business.

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Going-concern assumption

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Expenses should be recognized as they are incurred to produce revenues

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Matching principle

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The threshold at which missing or incorrect information in financial statements is considered to have an impact on the decision making of users.

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Materiality

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Requires accounting information to be free of measurement method bias

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Neutrality

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Assumption made by accountants that a company's ongoing activities can be divided up and reported in annual, quarterly and monthly financial statements. For the sake of comparability, these time periods are kept the same over time.

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Periodicity

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Information has this characteristic when it supports users' abilities to anticipate outcomes of events

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Predictive value

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The concept that revenue can only be recognized once the underlying goods or services associated with the revenue have been delivered or rendered

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Realization principle

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Requires that information be pertinent to a decision

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Relevance

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When information depicts for users what it purports to represent

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Reliability

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This characteristic requires that information on economic activity corresponds to the actual underlying activity

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Representational faithfulness

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Revenues should be earned and realized before they are recorded

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Revenue recognition principle

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Requires that accounting information be available when it is necessary to have for decision making

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Timeliness

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Information has this characteristic when it can be significantly duplicated by independent measurers using the same methods

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Verifiability

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TRY Business entity NOT Materiality

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Casey quit his salaried job to fulfill his dream of being self-employed. As a sole proprietor, Casey thought he could use his own personal checking account for his new business. After his first two months in business he visited with a CPA who advised him to immediately open a separate checking account for business income and expenses. The CPA's advice is based on which of the following accounting concepts?

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TRY $102,700 NOT $151,500

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On February 1, Stephen Sims started a sporting goods store by contributing $85,000 of his own money to the business. In week two, Stephen's business borrowed $50,000 from a local bank. In week three, Stephen purchased $29,000 worth of inventory for cash. In week four, Stephen purchased a one-year insurance policy in the amount of $3,300 for cash and office equipment for $1,200 that he bought on account. What is the balance in cash at the end of week four?

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TRY Dividends NOT Capital contributions

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Which of the following accounts reduces stockholder's equity?

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TRY $67,500 NOT $43,500

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Consider the following information to calculate the balance of retained earnings at the end of May. IMAGE

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A construction company

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Which of the following businesses would use the percentage-of-completion method of revenue recognition?

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0.8

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H&S Corporation reports $200,000 in assets and $40,000 in liabilities. What is the equity ratio?

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Full disclosure

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Users of financial information might sue a company if they feel they have not been adequately informed of significant financial matters within the company. Which of the following accounting principles provides confidence to users of financial statements that they are well informed?

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TRY credit liabilities NOT credit revenue.

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A journal entry for a publishing company to record the receipt of a payment for a one-year monthly magazine subscription would debit cash and:

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TRY Land, Pre-paid expenses, Owner's draw NOT Building, Sales, Accounts payable

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Select the list of accounts which includes only accounts that carry a normal debit balance.

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Supplies

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Which of the following accounts requires an adjusting entry?

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TRY Wages expense: 13,500, Wages payable: 13,500 NOT Wages expense: 13,500, Cash: 13,500

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On November 30, Serendipity Stores made an adjusting entry for wages expense in the amount of $13,500. Which of the following journal entries is correct for the adjusting entry?

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TRY $69,000 NOT $62,000

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During the closing process, Income Summary was closed with a $3,000 credit. Expenses for the period were $66,000. The dividends account was closed with a $1,000 credit. The revenue for the period was:

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TRY $950 debit NOT $650 debit

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Salaries expense has a debit balance of $800 in the Trial Balance column of the accounting worksheet. There is a $150 credit to Salaries payable in the Adjustment column. What amount would you expect to see in the Adjusted Trial Balance column for Salaries expense?

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TRY trial balance, adjusting entries, adjusted trial balance NOT adjusted trial balance, adjusting entries, trial balance

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Identify the correct order for the process of recording adjusting entries.

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the balance sheet as a liability.

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An unearned revenue credit balance in the Adjusted Trial Balance column of the accounting worksheet will carry forward to:

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TRY permanent accounts NOT nominal accounts

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The post-closing trial balance includes:

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TRY Working capital is current assets minus current liabilities. NOT Working capital is liabilities plus shareholder equity.

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Which of the following equations describes working capital?

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TRY Current ratio NOT Equity ratio

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Which solvency measure divides current assets by current liabilities?

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TRY $970 NOT $490

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Teacups Galore utilizes a perpetual inventory system and reported the following transactions for item TCG46: Calculate the ending balance in inventory on May 31 using the first-in, first out (FIFO) method. IMAGE

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$171.50

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Arrow Street Market reported the following transactions for inventory item TH8771: Assuming a perpetual inventory system, calculate the gross profit for the month of September using the last-in, first out (LIFO) method. IMAGE

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TRY $820 NOT $490

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Teacups Galore utilizes a perpetual inventory system and reported the following transactions for item TCG46: Calculate the ending balance in inventory on May 31 using the last-in, first-out (LIFO) method. IMAGE

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TRY $132,000 NOT $40,000

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Nick's Sports Dream reported $160,000 in net sales at the end of year one, and cost of goods sold totaled 25% of net sales. There was a 10% increase in gross margin at the end of year two. What was the gross margin at the end of year two?

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Merchandise placed on consignment December 1, 2017, which sold January 15, 2018.

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Which of the following would be included in a seller's inventory on December 31, 2017?

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debit sales tax payable and credit cash

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Ashley-Jolie Décor collects 8.35% sales tax on all customer sales. First quarter sales totaled $35,000. The journal entry to record remittance of the sales tax to the proper state taxing authority will:

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record a journal entry to reinstate the debt

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Gabrielle's Imports received $4,000 for a customer's previously written-off bad debt. Before the payment is recorded, Gabrielle's Imports must:

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TRY Double-declining balance NOT Straight-line

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Which of the following is an accelerated method of calculating depreciation?

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TRY $527,500 NOT $517,000

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Wilson College purchased an adjacent property for the purpose of building new dormitories for their honor students. Given the following costs associated with the acquisition, calculate the cost recorded for land. IMAGE

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debit Leasehold Improvements for $50,000 and amortize over 20 years

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Diels & Associates remodeled their newly leased office space at a cost of $50,000. The non-renewable, 25-year lease requires an annual rent payment of $24,000. The improvements have an estimated life of 20 years. Select the appropriate accounting treatment of the remodeling cost.

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TRY Office furniture used by the staff accountant NOT Office supplies valued at $1,000

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Hartley Furniture Galleries records which of the following as a depreciable asset?

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TRY increases after amortization of a bond discount. NOT considers cash payments for interest expense.

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The carrying value of bonds

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TRY at 100 if the yield is 11% NOT at 100 if the yield is 10%

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Bonds with a face value of $500,000 and a stated rate of 11% will sell

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TRY voting privileges NOT call premiums

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What advantage do common stockholders have over preferred stockholders?

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*** NOT Shares of stock have maturity dates; bonds do not mature

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Which of the following is true about capitals stocks and bonds?

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*** NOT is increased with a net loss

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The retained earnings section of a statement of stockholders' equity

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*** NOT $10 par common stock

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A corporation with a variety of stock issued declares dividends for the first-time in two years. The stockholders receiving first priority for the receipt of those dividends are those holding:

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*** NOT Net income and dividends

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What are the main sources of stockholders' equity?

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*** NOT Bond issuers are selling units of ownership while stock issuers are not

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Which of the following is a difference between stock issuers and bond issuers?

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$1,000,000

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What is the face amount of a $1,000,000 bond that sold with a coupon rate of 9% and a yield of 10%?

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*** NOT the stated rate of interest

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The price of a bond issue is calculated by discounting the expected cash flows from the bonds using

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junk; secured

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_______________ bonds are risky but offer above-average interest payments; _______________ bonds are backed by liens on specific property to guarantee payment.

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$80,000 of paid-in capital

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Sun Corporation authorized 100,000 shares of $10 par common stock. As of December 31, 80,000 shares are outstanding. The year-end balance sheet would report common stock as:

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TRY debit cash $1,020,000 NOT debit cash $980,000

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A journal entry that records bonds payable in the amount of $1,000,000 and premium on bonds payable of $20,000 would also:

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TRY To reduce the market value of the corporation's stock. NOT To decrease the number of shares outstanding.

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Why would a corporation want to issue a stock dividend rather than a cash dividend?

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*** NOT debit cash $970,000

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A journal entry that records bonds payable in the amount of $1,000,000 and discount on bonds payable in the amount of $30,000 would also

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*** NOT debits Discount on Bonds Payable and credits Bonds Payable

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The journal entry for the amortization of a bond premium:

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TRY Preferred NOT Treasury

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Which type of stock has a fixed dividend that is calculated as either a price per share or a percentage of par?

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As an inflow to operating activities

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How is cash received in the ordinary course of doing business presented in a statement of cash flows?

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cash receipts; net income

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The direct method and the indirect method of the statement of cash flows begin with what dollar amount respectively?

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TRY As an inflow to the investing activities NOT As an inflow to the operating activities

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Where is the sale of property, plant and equipment presented in a statement of cash flows?

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Income statement

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Which of the following financial statements is prepared first?

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The anticipated effect of the change for future years

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Nichols Company decided to switch its inventory valuation method from first-in, first-out (FIFO) to last-in, first-out (LIFO) for the year 2017. Which of the following items must be disclosed in their 2017 financial statements as a result of the change?

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Exchange price (cost)

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Select-a-Shot installed a machine to print codes on golf balls. The purchase hprice of the macine, including freight and installation costs, totaled $222,689. Which of the following accounting principles required the asset to be recorded at that price?

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$111,000

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A retailer had cash sales of $85,000 and sales on account of $26,000 for the year 2017. On December 31, 2017, they were still owed $14,000 from a few customers. How much will they report as revenue for the year 2017?

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Matching

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Which of the following accounting principles supports the need for an adjusting entry at the end of an accounting period for wages expense and wages payable?

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Full disclosure

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Thompson Dental Equipment owns factories all over the United States and wants to sell three of them. As a result of the recession, the factories will most likely be sold for less than their original purchase price. Which of the following accounting principles requires that a statement on the effect of the potential future sale of the three factories accompany Thompson Dental Equipment's financial statements?

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Timeliness

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Shause & Company promises their clients that financial statements will be available to them no later than the tenth day of the month following every month of activity. This turn-around allows management to make decisions quickly with pertinent data. Which qualitative characteristic of financial information is supported by this behavior?

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Total assets equal $65,600

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Woodruff-Simpson Trial Balance June 30 Select one: IMAGE

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$9,300

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According to the trial balance sheet below, what was Woodruff-Simpson's total revenue for the month of June? IMAGE

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TRY After adjusting entries, Prepaid Insurance will have a debit balance of $3,600. NOT After adjusting entries, Insurance Expense will have a credit balance of $300.

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Woodruff-Simpson Trial Balance June 30 Select one: IMAGE

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$16,500

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Ladron Engineering produced the following partial trial balance before making adjusting entries. Following the production of this trial balance, Ladron made adjusting entries for the following: · Two-thirds of the supplies were still available in the supply room. · Ladron had performed services to earn one half of the unearned fees. · Ladron's new employee worked the last five days of the month for $100/day; payroll would be issued on the 5th day of August. AFTER ADJUSTING ENTRIES, TOTAL LIABILITIES EQUAL:

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$17,000

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Ladron Engineering produced the following partial trial balance before making adjusting entries. Following the production of this trial balance, Ladron made adjusting entries for the following: · Two-thirds of the supplies were still available in the supply room. · Ladron had performed services to earn one half of the unearned fees. · Ladron's new employee worked the last five days of the month for $100/day; payroll would be issued on the 5th day of August. THE INCOME STATEMENT WILL REPORT NET INCOME/LOSS IN THE AMOUNT OF:

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the statement of retained earnings as a decrease to retained earnings.

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A debit balance of $150 in the dividends account in the Adjusted Trial Balance column of the accounting worksheet will carry forward to

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*** NOT Supplies

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Which of the following accounts is closed to Income Summary during the closing process?

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debit to retained earnings.

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During the closing process, a debit balance of $2,500 in the dividends account would be closed with a:

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*** NOT $38,000

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During the closing process, Income Summary was closed with a $56,000 debit. Revenues for the period were $95,000. The dividends account was closed with a $1,000 credit. The expenses for the period were:

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*** NOT $5,000 debit balance

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Kateman & Mays Repair Shop has a $10,000 accumulated depreciation credit balance in the trial balance column of their accounting worksheet. An adjusting entry records $5,000 of depreciation expense. What amount of accumulated depreciation will the balance sheet column of the accounting worksheet report?

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The sum of cash, accounts receivable, and supplies divided by the sum of accounts payable and 1-year note payable

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Which of the following equations solves for the acid-test (quick) ratio?

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preferred dividends

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To arrive at earnings per share, _______________ is subtracted from net income when calculating the earnings available to common stockholders.

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$118,380

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Use the following data to calculate cost of goods sold for a company using the period inventory method. IMAGE

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TRY FOB shipping point is shipped. NOT FOB destination is shipped.

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A merchandising company will recognize revenue when merchandise with the terms:

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*** NOT The retailer debits transportation expense for the cost of transportation-in.

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Which of the following statements regarding the cost of transportation-in for the purchase of inventory is true?

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TRY Contra-revenue NOT Expense

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What type of account is Sales Discounts?

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$54,685

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Arrow Street Market utilizes a periodic inventory system. A physical count on December 31 found 67 units of item CR113 in inventory. The following transactions were reported for the year: Calculate the ending inventory balance of item CR113 using the last-in, first-out (LIFO) method. IMAGE

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$4,000 credit

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Candle Stix estimates that 5% of the $100,000 balance in accounts receivable is uncollectible. Prior to year-end adjusting entries, there is a $1,000 credit balance in allowance for doubtful accounts. The year-end adjusting entry will include a _______________ to allowance for doubtful accounts

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*** NOT credit interest expense $9,000

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The maker of a note payable needs to record an adjusting entry for 30 days of accrued interest at the end of its fiscal year. The adjusting journal entry for interest on a $75,000 note paying 12% interest will

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Copyright

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Which of the following costs is amortized as an intangible asset?

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$19,200

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Purchase price $ 100,000 Appraised value $ 85,500 Book value $ 80,800 Salvage value $ 4,000 Select one: IMAGE

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Companies depreciate assets by systematically allocating the purchase price to the accounting periods benefitting from use of the asset.

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Which of the following statements is true?

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Patent acquisition

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Which of the following costs is amortized as an intangible asset?

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date of declaration

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The journal entry on August 7 would be called the: IMAGE

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TRY $100,000 at bond maturity. NOT $7,760 at bond maturity

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A $100,000 bond issue with a contract rate of 8% that sold at 97 will pay investors:

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common and preferred

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What are the two main classes of capital stock?

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Dividends declared totaled $1,750,000

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The beginning and ending balance in retained earnings was $5,000,000 and $3,750,000, respectively. Net income for the period was $500,000. Based on this information, which of the following statements is true?

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TRY debits bonds payable for the face amount of the bonds. NOT credits premium on bonds payable for the face amount of the bonds.

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Bonds issued at 102 were paid at maturity 10 years later. The journal entry to record the redemption of the bonds:

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debits premium on bonds payable

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The journal entry for the amortization of a bond discount:

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*** NOT 5,000 shares

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A corporation has 25,000 shares of $10 par stock outstanding. How many shares would be outstanding after a 5-for-1 stock split?

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*** NOT $550,000

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How much cash was received for a $500,000 bond issue with a contract rate of 10% that sold at 102?

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*** NOT at a premium if the effective rate is 10%

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A bond with a face value of $1,000 and a 10% coupon rate will sell:

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*** NOT The EPS of common stockholders

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Which of the following would be included in a bond indenture?

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*** NOT at a premium if the market rate is 12%

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A bond with a face value of $10,000 and a 12% contract rate will sell:

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Retained earnings equals $2,000,000

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Carpet World reported $3,500,000 of total stockholder's equity on their December 31 balance sheet, which included total paid-in capital of $1,500,000. Based on this information, which of the following statements is true?

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As a deduction from stockholder equity

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How is treasury stock reported on a corporation's balance sheet?

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*** NOT

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An appropriation of retained earnings

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*** NOT increases retained earnings and decreases paid-in capital

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An appropriation of retained earnings

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*** NOT Capital stock and bonds payable

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What accounts are affected when a bond is issued at face value?

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*** NOT the market rate

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The interest rate used to calculate straight-line interest payments to bond holders is called

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*** NOT The price at which a company's stock is sold

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What is par value?

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as an outflow to the financing activities of a statement of cash flows

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Cash dividends paid is recorded:

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operating, investing, financing

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What is the proper order of business activities for presenting the statement of cash flows?

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*** NOT As an inflow to financing activities

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How is interest and dividend income presented in a statement of cash flows?

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$48,100

answer

On December 31, 2011, Rex's Used Tires and More Store have assets that include: Cash, $6,050; Accounts receivables, $22,000; and Supplies, $31,050. The liabilities on December 31, 2011, total $11,000. What is the owners' equity on December 31, 2011?

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Record a credit to prepaid rent for $900

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Tony decides to open a computer repair service business. To conduct his computer repair business, he makes the decision to rent a commercial property. Tony shops around and finds a 2,000-square-foot property. The owner of the property is willing to lease the property to Tony on an 18-month lease for $32,400. The lease will then have to be renegotiated at the end of the 18 months. The lease begins on June 15, 2011. Tony wants to ensure he is able to conduct business and not have to worry about the lease, so he prepays $32,400. To maintain the accrual basis of accounting as identified by GAAP, on June 30, 2011, Tony will have to do which of the following?

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Assumption

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Which of the following is NOT an accounting constraint stated by the completion of the course?

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$0

answer

If beginning owners' equity is $60,000, net income is $28,000, and ending owners' equity is $88,000, cash withdrawals for the same period would equal:

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TRY managerial accounting. NOT the income statement

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Henry is the Vice-President of Sales and Marketing for a major retailer in New York. Part of Henry's job requires him to analyze the sales activity of all of the company's strategic business units individually and track the impact a marketing campaign has on each business unit. Henry is looking at and using:

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Always paying dividends even when the company is not profitable

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Which of the following is NOT a stated obstacle of good financial reporting?

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Equipment to be debited $20,000

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Sheila plans to buy new equipment for her beauty salon. The equipment will cost $20,000. Sheila makes the purchase by putting forth a $9,000 down payment and obtaining a note for the remaining balance of the salon equipment. This transaction will cause which of the following?

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TRY Materiality NOT Monetary unit

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Laura is the Chief Financial Officer for a major denim company. When Laura produces the financial statements, she rounds all dollar amounts to the nearest $100. Which accounting concept allows Laura to acceptably perform this action?

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Materiality principle

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Sherry was a school teacher working in a poor school district. She did not make a lot of money, so she took a second job as a third-shift bookkeeper for a major bank in her local area. As a bookkeeper on third shift, Sherry came into contact with all kinds of company property, including but not limited to copy paper, pens, and pencils. In her capacity as a teacher, Sherry worked with some of the poorest children in her area, and many of them could not afford basic school supplies. Sherry knew her third-shift job had a lot of the supplies her students needed, so she would periodically take many of the supplies from her third-shift job and give them to her students in her teaching job. Eventually, this caught up to her, and she was called into the office and reprimanded. During the reprimand, she met an accountant for this bank. The accountant explained that as a multi-billion dollar business, the bank did not track the quantity of the pencils as an expense in terms of financial reporting; however, this fact did not change the reality that Sherry was stealing company merchandise. Based on the statement the accountant made to Sherry and your understanding of the concepts presented in this course, which accounting principle or objective best describes this situation?

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$53,300

answer

Peter owns a small home-based business and decides to do his own accounting. In Table 1 below, there is a random listing of the account balances in the various assets, liabilities, revenues, and expense accounts that Peter has identified. Peter invested $40,000 to start the business. Later in the year, he withdrew $11,000 for personal use. What is Peter's net income/loss at the end of the year? IMAGE

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Going concern assumption

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Brian started a business and decided to incorporate it. He believed he had an outstanding business idea and wanted to share it with the world. Brian turned out to be right; his idea made him a wealthy man. Brian established this corporation and conducted business not as a small business owner but as the leader of a business he felt could continue operating indefinitely. Which accounting principle or objective best reflects this situation?

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decreased by $15,000

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If total liabilities decrease by $25,000 and owners' equity increases by $10,000 during a specific accounting period, then assets must have:

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Increase an asset and increase a liability

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If a business borrows money from a bank, how is this transaction reflected in the accounting equation?

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$36,000

answer

Carlos operates a snack-food truck. In Table 1 below, there is the accounting data from a specific accounting period after Carlos calculated all of his receipts. Using the data provided, what are the total expenses Carlos incurred during this period? IMAGE >>> Net income for the current period: $21,000 Ending owners' equity: $35,000 Beginning owners' equity: $17,000 Owner withdrawals: $1,900 Revenue for the current period: $57,000

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adjusted trial balance

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All of the accounts identified while journaling transactions should end up on the:

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Sales revenue

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Which of the following is not reported on the balance sheet?

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cash; capital

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If an owner invests $200,000 into his or her business, __________ would be debited, and ___________ would be credited.

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Analyze and journalize accounting transactions

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In completing the accounting cycle, how does the process begin?

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TRY Both answers A and B NOT The income statement

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An adjusting entry affects an account on which of the financial statements?

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Supplies: credited $2,300

answer

In the beginning of the year, Cameron purchased $3,000 worth of office supplies for his home office which resulted in a debit to Supplies. On December 31, he took inventory of his office supplies and noticed that he had about $700 worth of supplies left to use. Which of the following would be a part of the journal entry to account for the use of supplies?

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TRY accrual. NOT debit

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Imagine you own a lawn service business and you perform service for a client during the month of June but do not receive a payment until July. According to the rules of adjusting entries, you would be identifying this adjustment as a(n):

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By crediting a liability account

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If a business receives revenue that has not been earned and they account for the unearned revenue as revenue earned, how will they adjust this issue to align with GAAP?

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$3,200 net loss

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After completing the financial accounting worksheet, you are left with financial statement columns as listed below. Using this information, what is the net income or loss for this business?

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It gets closed to the capital account.

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Before you can complete the accounting worksheet, you will have to close out your temporary accounts into an income summary account. Once the income summary account has been created, it will have to be closed out at the end of the accounting cycle. What happens to the income summary account?

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Accumulated depreciation

answer

Which of the following is considered a permanent account?

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listed on the balance sheet

answer

If you use the accounting worksheet, at the end of the closing process, you will end up with all accounts:

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Item 8

answer

On Form 10-K, which section includes the "Financial Statements and Supplementary Data"?

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TRY common shareholders NOT all shareholders

answer

"Return on equity" measures the amount of income the company generated for:

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Item 7

answer

Which section of Form 10-K gives the company's perspective on the business results of the past fiscal year?

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TRY Business ratio NOT Activity ratio

answer

Which of the following is NOT a type of ratio used in financial statement analysis?

question

$115,300; $51,000

answer

The cost of goods sold for a business was $74,300. If this business had beginning inventory of $55,000, ending inventory of $31,700, and a gross profit of $41,000, net sales would have been _______________, and purchases would have been _______________.

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$2,000

answer

A merchandising business had beginning inventory in the amount of $105,000 and ending inventory in the amount of $111,000. Additionally, the business did not have any associated freight costs; cost of goods sold was $97,000, and total purchases were $105,000. What would be the amount identified for purchase returns and allowances?

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$235

answer

Jackson Enterprises has provided you with the following data: Beginning inventory: 15 units at $11 each; July 19: purchase 9 units at $9 each; August 8: sell 12 units; August 10: purchase 14 units at $14 each; September 1: sell 21 units; September 7: purchase 15 units at $12 each. Using this data, what is the value of the ending inventory using the perpetual LIFO method?

question

a. Net sales revenue b. Sales revenue c. Inventory expense Incorrect d. Sales returns and allowances

answer

Which of the following accounts has a normal debit balance?

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a. It is reported on the balance sheet as a contra asset account. b. It is also called the unfortunate consumer credit account. c. It is reported on the income statement as an expense account. d. All of these answers Incorrect

answer

Which of the following is true about the account-allowances for doubtful accounts?

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a. The accounts receivable: debited $25,000 Incorrect b. The cost of goods sold: debited $18,750 c. The inventory account: debited $18,750 d. Both answers A and B

answer

If a manufacturer sells and ships $25,000 worth of goods under the FOB shipping point terms to a local business, with a cost of goods at 75% of the value associated with the sale, which transaction will the manufacturer record?

question

$3,840

answer

A lamp company has identified their current accounts receivables to be $121,462. Based on historical analysis, it has averaged about $41,135 of accounts receivables that are 1 to 30 days past due. Between 31 to 60 days, the amount decreases by $17,000. Over 61 days, accounts receivable typically averages 43% of the average balance between 31 to 60 days past due. The lamp company has determined uncollectible amounts to be: What is the expected uncollectable amount for accounts over 60 days past due? IMAGE

question

a. A credit to accounts payable for $1,010 b. A credit to accounts receivables for $868.60 c. A credit to office supplies expense for $868.60 d. A debit to accounts payable for $1,010 Incorrect

answer

A business purchases $1,010 of office supplies on account during the month of February. It receives and uses all but 14% of the supplies during the month of February. If the company pays for the office supplies in March, which of the following entries will have to be made to properly account for the February transaction?

question

a. Research and development costs Incorrect b. Patents c. Natural resources d. Franchises

answer

Which of the following is NOT an intangible asset?

question

All of these answers

answer

For an accountant to identify the depreciation expense associated with a plant asset, which of the following has to be considered?

question

a. Debit to equipment for $200,000 Incorrect b. Debit to equipment for $212,195 c. Credit to equipment for $200,000 d. Credit to equipment for $212,195

answer

If a company purchases land, equipment, and a building totaling $600,000, and the market values are identified as $180,000, $290,000, and $350,000 respectively, the journal entry to record the purchase of equipment will include which of the following?

question

a. All subsequent expenditures associated with the asset should be recorded. b. Disposal of the asset has to be accounted for. Incorrect c. Useful life is the singular most important element when accounting for a plant asset. d. Both answers A and B

answer

Which of the following is NOT an element of the steps used to account for a plant asset?

question

a. the amount at which common or preferred stock must be issued. Incorrect b. the legal capital below which stockholders' equity must not fall. c. the amount of money to which a stockholder is entitled. d. the cost to print a stock certificate.

answer

Par value of common stock or preferred stock refers to:

question

a. Paid-in capital b. Cash dividends c. Stock dividends d. Stock split Incorrect

answer

The following journal entry would account for which of the following transactions? Dr. Retained earnings Cr. Common stock Cr. Paid-in capital

question

a. Interest expense will be the same as the interest payments. Incorrect b. Interest expense will be less than the interest payments. c. Interest expense will be more than the interest payments. d. Interest expense will fluctuate based on the market rate of the bond.

answer

If a bond is issued at a discount, what is the effect on interest expense over the term of the bond?

question

A bond will sell at a premium if the coupon rate is higher than the market rate.

answer

Which of the following statements is correct regarding bond prices and interest rates?

question

a. Cash paid for interest and cash paid for dividends Incorrect b. Cash paid for dividends and cash paid for taxes c. Cash paid for interest and cash paid to suppliers d. Cash paid for taxes and cash paid for interest

answer

If the company uses the indirect method to prepare the statement of cash flows, what are two items that still have to be disclosed?

question

a. Purchases of equipment Incorrect b. Interest and dividends received c. Dividends paid d. Cash received for issuance of convertible bonds

answer

Which of the following transactions would be an operating activity on the statement of cash flows?

question

a. Interest paid on convertible bonds Incorrect b. Interest received c. Purchase of equipment financed by convertible bonds d. Purchase of treasury stock

answer

Which of the following transactions would be a financing activity on the statement of cash flows?

question

It communicates to investors the cash receipts and cash disbursements of the companyco

answer

What is the purpose of the statement of cash flows?

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