Project #23949 - FINANCIAL ACCOUNTING

Which of the following is the primary purpose of accounting?

To establish a business.

To identify, record, and communicate business transactions.

To earn a large profit.

To reduce taxes owed for the business.

To establish credit for a company.

 

Конецформы

 

Which of the following elements are found on the income statement?

Cash

Accounts receivable

Common stock

Retained earnings

Salaries expense

Which of the following items would appear on the income statement?

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Common stock, service revenue, retained earnings, accounts payable, and unearned revenue.

Cash, supplies, prepaid rent, accounts receivable, office equipment, utilities expense, and shaving equipment.

Common stock, cash, supplies, prepaid rent, retained earnings, accounts payable, accounts receivable, office equipment, unearned revenue, and shaving equipment.

Service revenue and utilities expense.

Service revenue, unearned revenue, and utilities expense.

 

A debit is:

An increase in an account.

The right-hand side of a T-account.

A decrease in an account.

The left-hand side of a T-account.

An increase to a liability account.

If a company forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

Assets overstated and equity understated.

Assets and equity both understated.

Assets overstated, net income understated, and equity overstated.

Assets, net income, and equity understated.

Assets, net income, and equity overstated.

The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called:

Accrual basis accounting.

Operating cycle accounting.

Cash basis accounting.

Revenue recognition accounting.

Current basis accounting.

Начало формы

Based on the following information, determine the current assets, assuming all accounts have a normal balance?

  Cash

$6,954  

  Dividends

$4,000  

  Accounts receivable

15,733  

  Consulting fees earned

15,718  

  Office supplies

2,825  

  Rent expense

3,873  

  Land

39,153  

  Salaries expense

6,842  

  Office equipment

16,535  

  Telephone expense

760  

  Accounts payable

6,663  

  Miscellaneous expense

480  

  Common stock

56,490  

  Retained Earnings

?  

 

$81,200

$63,153

$64,665

$25,512

$42,047

 

On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the perpetual inventory system. The journal entry or entries that Robertson will make on October 1 is:

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A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15, net 45. If the company elects to pay within the discount period, what would be the appropriate journal entry to record the payment?

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A company had the following purchases during the current year:

 

     

  

  January:

  18 units at $125

  February:

  28 units at $135

  May:

  23 units at $145

  September:

  20 units at $155

  November:

  18 units at $165


 

On December 31, there were 46 units remaining in ending inventory. These 46 units consisted of 6 from January, 8 from February, 10 from May, 8 from September and 14 from November. Using the specific identification method, what is the cost of the ending inventory?

 

$6,530

$6,830

$6,210

$6,670

$7,130

Начало формы

A company had inventory on November 1 of 10 units at a cost of $14 each. On November 2, they purchased 15 units at $15 each. On November 6, they purchased 11 units at $17 each. On November 8, 13 units were sold for $26 each. Using the FIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?

 

$367

$345

$347

$322

$335

Начало формы

An overstatement of ending inventory will cause

An overstatement of assets and equity on the balance sheet.

An understatement of assets and equity on the balance sheet.

An overstatement of assets and an understatement of equity on the balance sheet.

An understatement of assets and an overstatement of equity on the balance sheet.

No effect on the balance sheet.

 

A company's internal control system:

Eliminates the risk of loss.

Monitors and controls business activities.

Eliminates human error.

Eliminates the need for audits.

Is not necessary in large companies.

The main principles of internal control include which of the following:

Establish responsibilities.

Maintain minimal records.

Use only computerized systems.

Bond all employees.

Require automated sales systems.

In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that check number 2889 for December's utilities was correctly written and drawn for $190 but was erroneously entered in the accounting records as $901. The journal entry to adjust the books for the bank reconciliation would include which of the following for this situation?

 

     

 

$711 decrease to Cash and a $711 decrease to Utility Expense.

$711 increase to Cash and a $711 decrease to Utility Expense.

$551 decrease to Cash and a $551 decrease to Utility Expense.

$551 increase to Cash and a $651 decrease to Utility Expense.

$901 increase to Cash.

An accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period of the sales and (2) reports accounts receivable at the amount of cash to be collected is the:

Allowance method of accounting for bad debts.

Aging of notes receivable.

Adjustment method for uncollectible debts.

Direct write-off method of accounting for bad debts.

Cash basis method of accounting for bad debts.

A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

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All sales are made on credit. Based on past experience, the company estimates 0.5% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

$925

$1,225

$4,200

$4,500

$45,000

Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is:

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On December 31 of the current year, a company's unadjusted trial balance included the following: Accounts Receivable, debit balance of $105,662; Allowance for Doubtful Accounts, credit balance of $1,479. What amount should be debited to Bad Debts Expense, assuming 5% of outstanding accounts receivable at the end of the current year are considered uncollectible?

 

     

 

$1,479

$5,283.1

$6,762.1

$3,804.1

$104,183

Depreciation:

Measures the decline in market value of an asset.

Measures physical deterioration of an asset.

Is the process of allocating to expense the cost of a plant asset.

Is an outflow of cash from the use of a plant asset.

Is applied to land.

A company purchased property for a building site. The costs associated with the property were:

 
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What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

$175,800 to Land; $18,800 to Building

$190,000 to Land; $3,800 to Building

$190,800 to Land; $1,000 to Building

$192,800 to Land; $0 to Building

$193,800 to Land; $0 to Building

Plant assets are:

Tangible assets used in the operation of a business that have a useful life of more than one accounting period.

Current assets.

Held for sale.

Intangible assets used in the operations of a business that have a useful life of more than one accounting period.

Tangible assets used in the operation of business that have a useful life of less than one accounting period.

Accounts payable:

Are amounts owed to suppliers for products and/or services purchased on credit.

Are long-term liabilities.

Are estimated liabilities.

Do not include specific due dates.

Must be paid within 30 days.

Obligations due to be paid within one year or within the company's operating cycle, whichever is longer, are:

Current assets.

Current liabilities.

Earned revenues.

Operating cycle liabilities.

Bills.

On January 1, 2013, Jacob issues $600,000 of 11%, 15-year bonds at a price of 102½. What is the journal entry to record the issuance of these bonds?
rev: 11_12_2013_QC_39615

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Secured bonds:

Are also referred to as debentures.

Have specific assets of the issuing company pledged as collateral.

Are backed by the issuer's bank.

Are subordinated to those of other unsecured liabilities.

Are the same as sinking fund bonds.

When all of the authorized shares have the same rights and characteristics, the stock is called:

Preferred stock

Common stock

Par value stock

Stated value stock

No-par value stock

Owners of preferred stock often do not have:

Ownership rights to assets of the corporation.

Voting rights.

Preference to dividends.

The right to sell their stock on the open market.

Preference to assets at liquidation.

The following data regarding its common stock were reported by a corporation:
 

 

     

   

  Authorized shares

20,000  

  Issued shares

16,000  

  Treasury shares

3,200  


 

The number of outstanding shares is:

rev: 12_28_2013_QC_43011

12,800

16,000

16,800

20,000

23,200

A company issued 70 shares of $100 par value stock for $10,000 cash. The total amount of contributed capital is:

 

     

 

 

$100

$700

$3,000

$9,000

$10,000

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Due By (Pacific Time) 02/28/2014 10:00 am
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