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Acc 2101 > Chapter 3 (not quiz 6) > Flashcards

Chapter 3 (not quiz 6) Flashcards

1
Q

Which of the following is not a major section in the statement of cash flows?

A

Cash flows from customers.

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2
Q

In Cash Flow reporting at the point of Sale

A

There is no Loss and no Gain

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3
Q

Total change in cash = $40,

Net operating cash flows = $20,

Net investing cash flows = ($10)

What is net financing cash flows = $ (just type numbers)

A

30

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4
Q

ABC engages in the following cash payments:

Purchase equipment

$2,000

Pay rent

500

Repay loan to the bank

5,000

Pay worker’s salaries

1,000

What is the total amount of cash paid for operating activities? (just type numbers

A

1500

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5
Q

The Income Statement always balances.

A

False

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6
Q

Define Articulation (no credit, but very important)

A

A number that appears in more than one statement will always be the same

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7
Q

Which of the following statements is/are a snapshot (may have more than one answer)?

Check All That Apply
Statement of Changes in Equity
Statement of Cash Flows
Income statementIncome statement 
Balance Sheet
A

1,2

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8
Q

Consider the following account balances of ABC at the end of the year:

Accounts Payable

$4,400

Salaries Expense

12,800

Cash

1,700

Common Stock

2,400

Service Revenue

8,300

Supplies

4,300

Retained Earnings

1,100

Utilities Expense

5,000

How many of these accounts would appear in ABC’s year-end Income Statement?

A

3

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9
Q

How many of the following transactions would affect operating cash flows reported in the statement of cash flows (all transactions involve cash)?

Borrowed $50,000 from the bank
Purchased $12,000 in supplies

Provide services to customers for $27,000
Paid the utility bill of $750

Purchased a delivery truck for $12,000
Received $25,000 from issuing common stock

A

3

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10
Q

The Balance Sheet is a:

A

Video

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11
Q

In Cash Flow reporting, at the collection of an Account Receivable

A

There is a Gain

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12
Q

Which one statement is true?

A

All Income Statement accounts are Temporary

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13
Q

Name the 3 Cash Flows on the Cash Flow Statement (no credit, but very important)

A

Operating, financing, investing

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14
Q 
Calculate net income: (just type numbers)
Revenues     $10,000
Liabilities      $5,000
Expenses      $3,000
Assets         $19,000
Dividends     $4,000
A

7000

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15
Q

How many types of Cash Flow are there on the Cash Flow statement?

A

3

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16
Q

The Income Statement is a:

A

Snapshot

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17
Q

The Statement of Cash Flows is a:

A

Video

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18
Q

How many of the following transactions are operating activities?

Borrowed $50,000 from the bank

Purchased $12,000 in supplies

Provide services to customers for $27,000

Paid the utility bill of $750
Purchased a delivery truck for $12,000

Received $25,000 from issuing common stock

A

3

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19
Q

Which of the following best represents value created for stockholders during the current period?

A

Net Income

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20
Q

The Statement of Cash Flows always balances.

A

False

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21
Q

In Cash Flow reporting when the firm acquires inventory

A

There is a loss

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22
Q

Which of the following statements is NOT correct about the financial statements?

A

A balance sheet reports assets, liabilities, revenues, and expenses.

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23
Q

The ultimate goal of doing accounting is to (3 words):

A

Predicting cash flows

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24
Q

Prior to year-end adjusting entries, what would explain the Allowance for Uncollectible Accounts having a debit balance?

A

The amount of actual uncollectible accounts in the current year was greater than the estimate of uncollectible accounts made at the end of the prior year.

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25
Q

In a Big Bath, a firm

A

increases Expenses

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26
Q

Temporary accounts are found

A

On the Income Statement

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27
Q

How many of the following events would require an expense to be recorded?

Ordering office supplies

Hiring a receptionist

Paying employees’ salaries for the current month

Receiving but not paying a current utility bill

Paying for insurance in advance

A

2

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28
Q

Which of the following are made ONLY at year end

Transaction Entries
Adjusting Entries
Closing Entries

A

1,2

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29
Q

What do we end with in a bathtub (2 words)?

A

Ending balance

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30
Q

Which of the following is/are made BEFORE the financial statements are prepared (may have more than one answer)?

A

Closing Entries

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31
Q

The owner of an office building should report rent collected in advance as a debit to Cash and a credit to:

A

liability

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32
Q

When a company makes an end-of-period adjusting entry that includes a credit to Prepaid Rent, the debit is usually made to:

A

Rent Expense

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33
Q

Which of the following are made BEFORE a trial balance is prepared?

Transaction Entries
Adjusting Entries
Closing Entries

A

2,3

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34
Q

Which of the following are made BEFORE the financial statements are prepared?

Transaction Entries
Adjusting Entries
Closing Entries

A

3

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35
Q

Which of the following events would require an expense to be recorded (may have more than one answer)?

Check All That Apply

Ordering office supplies.

Ordering office supplies.

Paying employees’ salaries for the current month.

Paying employees’ salaries for the current month. Incorrect

Hiring a receptionist.

Hiring a receptionist.
Paying for insurance in advance

Receiving but not paying a current utility bill

A

1,3,4

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36
Q

A company orders office supplies in June. Those supplies are received and paid for in July. The supplies are used in August. In which month should the company record supplies expense?

A

August

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37
Q

ABC opened for business on January 1, 2018, and paid for two insurance policies effective that date. The liability policy was $54,000 for 18 months, and the crop damage policy was $18,000 for a two-year term. What was the balance in ABC’s Prepaid Insurance account as of December 31, 2018? (just type numbers)

A

27000

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38
Q

Which of the following is true?

A

Periodic Inventory Accounting is less expensive to maintain than Perpetual Inventory Accounting

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39
Q

An example of an adjusting entry would not include:

A

Paying salaries to company employees.

40
Q

Receiving cash from customers before services are performed results in:

A

Deferred revenues

41
Q

When a magazine sells one-year subscriptions to customers but receives the full amount of cash immediately, it is an example of a(n):

A

Deferred revenue

42
Q

The adjusting entry required when amounts previously recorded as deferred revenues are earned by providing goods or services to customers includes:

A

A debit to a liability.

43
Q

For which of the following must Debits equal Credits?
Check All That Apply

Transaction Entries
Adjusting Entries
Closing Entries

A

1,2,3

44
Q

ABC purchases inventory for $2,000 and incurs shipping costs of $100 for the goods to be delivered. To record this transaction, the company debits Inventory for $2,000, debits Selling Expenses for $100, and credits Cash for $2,100. Which of the following statements is correct?

A

Assets are understated

45
Q

Which of these transactions increased the given company’s total assets (may have more than one answer)?

Check All That Apply
Purchased equipment by signing a note payable.
Issued common stock for cash
Paid rent for the current month
Paid rent for the current month

Collected cash from customers on account.

A

3,4

46
Q

What do we start with in a bathtub (2 words)?

A

Opening balance

47
Q 
Investors and Creditors are interested in which of these entries?
Check All That Apply
Transaction Entries
Adjusting Entries
Closing Entries
A

3

48
Q

Which of the following items would not appear in an income statement?

A

Cash

49
Q

Which statement is true?

A

All Income Statement accounts are Temporary

50
Q

The adjusting entry required when amounts previously recorded as deferred revenues are earned by providing goods or services to customers includes:

A

A debit to a liability

51
Q

A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true?

A

The company records deferred revenue on October 15.

52
Q

ABC paid dividends of:$2,500, $0, $1,500 and $2,000 over the first four years of the company’s existence. If Retained Earnings after year four has an ending balance of $8,000, what is the average annual amount of net income (loss) over the past four years for ABC? (just type numbers)

A

3500

53
Q

ABC provides music for special occasions. On January 14, the Smith family hired ABC for an upcoming family wedding for an agreed upon fee of $10,000. The wedding was scheduled for May As part of the agreement, the Smiths paid ABC half of the fee at the end of April with the remaining amount due by the end of June. How would ABC record the receipt of the final payment in June?

A

Credit to Accounts Receivable.

54
Q

A company has the following transactions:

Pay employees’ salaries for the current period.
Pay rent in advance.
Pay dividends to stockholders in the current period.
Receive (but do not pay) a utility bill.
Use supplies previously purchased.
How many of these transactions result in an expense being reported in the current period using accrual-basis accounting?

A

3

55
Q

The Change in the Bathtub equals (3 words)

A

Increase minus decrease

56
Q

If a company records cash received for services to be provided in the future with a debit to Cash and a credit to Service Revenue, how will this error affect total assets for the current period?

A

Total assets will be correct.

57
Q

How many of the following events would require an expense to be recorded?

Ordering office supplies

Hiring a receptionist

Paying employees’ salaries for the current month

Receiving but not paying a current utility bill

Paying for insurance in advance

A

2

58
Q

ABC has the following balances on December 31 prior to closing entries:

Revenues

$25,000

Retained Earnings, Jan. 1

20,000

Cash

3,000

Expenses

10,000

Accounts Payable

4,000

Dividends

2,000

Supplies

17,000

Based upon the balances above, what net adjustment would be made to Retained Earnings due to closing entries? An Increase of (just type numbers)

A

13000

59
Q

At the beginning of December, ABC had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry?

A

Debit Supplies Expense $4,200, credit Supplies $4,200.

60
Q

When a company pays cash for equipment, what is the effect on the accounting equation for that company?

A

No change

61
Q

Which statement is true?

A

All balance sheet accounts are permanent

62
Q

Receiving a utility bill for costs in the current period but delaying payment until the following period is an example of a(n):

A

Accrued expense

63
Q

When a company makes an end-of-period adjusting entry, which includes a debit to Supplies Expense, the usual credit entry is made to:

A

supplies

64
Q

Which of the following are classified as Accounts Receivable? (This question may have multiple answers)

Check All That Apply
Tax refunds owed to us by the IRS
Monies that customers owe us for providing a service
Monies that customers owe us from sale of merchandise
Loans we made to a customer.

A

1,4

65
Q

To the nearest %, paying on the 15th day for a 1/15, net/30, gives an annual return of (just write the number)

A

24

66
Q

The usual balance in a Contra-Owners’ Equity account is a:

A

DR

67
Q

Which of the following are classified as Accounts Receivable?
Check All That Apply
Monies that customers owe us from sale of merchandise
Monies that customers owe us from providing a service
Tax refunds owed to us by the IRS
Interest Receivable
Loans we made to a customer
Loans we made to an employee

A

3,4,5,6

68
Q

A company received an order from a customer in June for services to be provided. Those services were provided in July, and the customer paid the full amount in August. According to the revenue recognition principle, in which month should the company record revenue?

A

July

69
Q

To the nearest %, paying on the 30th day for a 1/30, net/60, gives an annual return of (just write the number)

A

12

70
Q

ABC buys widgets for $5 cash and sells them on account for $8. What is the benefit value of a receivable on the books of ABC?

A

8

71
Q

The usual balance in a Contra-Dividend account is a:

A

CR

72
Q

The usual balance in a Contra-Revenue account is a:

A

DR

73
Q

We always sell pens at $8. We sold a pen for $7 because it was damaged. Record the sale at:

A

7

74
Q

ABC buys widgets for $5 cash and sells them on account for $8. From a cash flow perspective, the receivable is valued at?

A

0

75
Q

Which of the following is recorded upon receipt of a payment on April 7, 2018, by a customer who pays a $900 invoice dated March 3, 2018, with terms 2/10, n/60?

A

Debit Cash $900.

76
Q

In a sale on account, who is undertaking a financial risk of non-payment?

A

the seller

77
Q

Which of the following best explains the meaning of total stockholders’ equity?

A

The amount of capital invested by stockholders plus profits retained over the life of the company.

78
Q

The usual balance in a Contra-Expense account is a:

A

CR

79
Q

A company has 342 customers they extend credit to, how many accounts receivable will they have on their books? (just type numbers)

A

343

80
Q

Usually we measure Accounts Receivable at

A

Benefit Value

81
Q

The usual balance in a Contra-Asset account is a:

A

CR

82
Q

The usual balance in a Contra-Liability account is a:

A

DR

83
Q

Subsidiary Accounts and Master Accounts

A

Are bookkeeping devices

84
Q

To the nearest %, paying on the 10th day for a 2/10, net/30, gives an annual return of )just write the number)

A

36

85
Q

At the beginning of the period, Accounts Receivable equals $1,700. At the end of the period, Accounts Receivable equals $2,200. If Service Revenue for the period equals $15,400, what was the cash received from customers for the period?

1

A

14900

86
Q

When a company collects sales tax from a customer, the event is recorded with a(n) _________ in Cash and a(n) _________ in Sales Tax Payable:

A

increase; increase

87
Q

On March 3, ABC purchased a desk for $450 on account. On March 22, ABC purchased another desk for $500 also on account, and then on March 24, ABC paid $400 on account. At the end of March, what amount should ABC report for desks (assuming these two desks were the only desks they had)? (just type numbers

A

950

88
Q

Assume that cash is paid for rent to cover the next year. The appropriate debit and credit are:

A

Debit Prepaid Rent, credit Cash.

89
Q

A company provides services on account. Indicate how this transaction would affect (1) assets, (2) stockholders’ equity, and (3) revenues.

A

(1) Increase, (2) Increase (3) Increase

90
Q

The Accounts Payable account has a beginning balance of $15,000 and the company purchased $40,000 of supplies on account during the month. The ending balance was $20,000. How much did the company pay to creditors during the month? (just type numbers)

A

35000

91
Q

Which of the following are made BEFORE we start preparing the financial statements? (This question may have multiple answers)

A

Closing Entries

92
Q

Which of the following accounts would normally have a credit balance?

A

Accounts Payable, Service Revenue, Common Stock.

93
Q

ABC had a net income of $8,000, $5,000, $12,000, and $10,000 over the first four years of the company’s existence. If the average annual amount of dividends paid over the last four years is $3,000, what is the ending retained earnings balance? (If your number is 12,345 do not put in $ or commas, just type 12345)

A

23000

94
Q

Cash

Retained Earnings

Service Revenue

Utilities Expense

Salaries Expense

Accounts Receivable

Accounts Payable

Common Stock

Equipment

Dividends

How many of the above accounts have a normal debit balance?

A

6

95
Q

Assume that ABC had a retained earnings balance of $10,000 on April 1, and that the company had the following transactions during April.

Issued common stock for cash, $5,000.

Provided services to customers on account, $2,000.

Provided services to customers in exchange for cash, $900.

Purchased equipment and paid cash, $4,300.

Paid April rent, $800.

Paid employees’ salaries for April, $700.

What was ABC’s retained earnings balance at the end of April?

(If your number is 12,345 do not put in $ or commas, just type 12345)

A

11400

96
Q

DW has an ending Retained Earnings balance of $51,100. If during the year DW paid dividends of $4,300 and had net income of $22,500, then what was the beginning Retained Earnings balance? (If your number is 12,345 do not put in $ or commas, just type 12345)

A

32900

97
Q

The Accounts Receivable account has a beginning balance of $20,000 and the company provides services of $70,000 on account during the month. The ending balance was $21,000.

How much did the company receive from customers during the month? (just type numbers)

A

69000

Acc 2101 (4 decks)

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