Final

Question 1

If total assets decreased by $88,000 during a period of time and stockholders’ equity increased by $71,000 during the same period, then the amount and direction of the period’s change in total liabilities is:

Answer 1

$159,000 decrease

Question 2

declaring and paying cash dividends:

Answer 2

decrease stockholders’ equity

Question 3

how does receiving a bill to be paid next month for services received affect the accounting equation?

Answer 3

Liabilities increase, Stockholders’ equity decreases

Question 4

Allen Marks, Great Marks

Answer 4

45,000

Question 5

transactions affecting stockholders’ equity include

Answer 5

shares of capital stock issued to stockholders, dividends declared and paid to stockholders, revenues and expenses

Question 6

A credit balance in which of the following would indicate a likely error?

Answer 6

Salary Expense

Question 7

Office supplies purchased by Ari’s alarm service on account were returned. Which of the following entries for Ari’s alarm service records this transaction?

Answer 7

Accounts Payable, debit. Office Supplies, Credit

Question 8

Which of the following entries records the receipt of cash from patients on account?

Answer 8

Cash, Debit. Accounts Receivable, Credit.

Question 9

Using accrual accounting, expenses are recorded and reported only

Answer 9

when they are incurred, whether or not cash is paid

Question 10

If the effect of the credit portion of an adjusting journal entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry?

Answer 10

increases the balance of an expense account

Question 11

prior to the adjusting process, accrued expenses have

Answer 11

been incurred, not paid, and not recorded

Question 12

the cash basis of account records revenues and expenses when the cash is exchanged while the accrual basis of accounting…

Answer 12

records revenues and expenses when they are incurred

Question 13

which of the following is an example of an accrued revenue?

Answer 13

swimming pool cleaning that has been provided but has not been billed or paid

Question 14

a summary of selected ledger accounts appear below for Alberto’s Plumbing Services for the current calendar year-end. Net Income for the period is

Answer 14

$15,000

Question 15

Amir designs purchased a one year liability insurance policy

Answer 15

$600

Question 16

The primary difference between periodic and perpetual inventory system is that a

Answer 16

Periodic system determines the inventory on hand only at the end of the accounting period

Question 17

When the perpetual inventory system is used, the inventory sold is shown on the income statement as

Answer 17

Cost of Merchandise sold

Question 18

Using the following information, what is the amount of Cost of Merchandise Sold

Answer 18

$31,880

Question 19

Sales to customers who use bank credit cards such as mastercard and visa are usually recorded by a

Answer 19

debit to cash and a credit to sales

Question 20

merchandise with an invoice price of 3,000 is purchased on September 2

Answer 20

$2,940

Question 21

assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20, using the LIFO inventory method

Answer 21

$144

Question 22

assuming that the company uses the perpetual inventory system, determine the COMS for the sale of May 20 use the FIFO method

Answer 22

$136

Question 23

assuming that the company uses the perpetual inventory system, determine the ENDING INVENTORY VALUE for the month of May using the FIFO method

Answer 23

$372

Question 24

The value of the ending inventory using FIFO is

Answer 24

$1,375

Question 25

the value of the ending inventory using LIFO is

Answer 25

$1,150

Question 26

The value of the ending inventory using average cost is

Answer 26

$1,263

Question 27

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

Answer 27

LIFO

Question 28

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

Answer 28

FIFO

Question 29

During the taking of its physical inventory on December 31, 2014, Barry’s Bike Shop

Answer 29

Assets and R/E overstated by $70,000; net income overstated by $70,000

Question 30

If the estimated rate of gross profits is 30%, what is the estimated Cost of Merchandise Inventory on September 30, based on the following data?

Answer 30

$320,000

Question 31

A debit balance in the allowance for doubtful accounts

Answer 31

indicated that actual bad debt write-offs have exceeded previous provisions for bad debts

Question 32

A 60 day, 9% note for $10,000 dated May 1, is received from a customer on account. The maturity value of the note is

Answer 32

$10,150

Question 33

A new machine with a purchase price of $109,000 with transportation costs of $12,000, installation costs of $5,000

Answer 33

$132,000

Question 34

A fixed asset’s estimated value at the time is to be retired from services is called

Answer 34

residual value

Question 35

When the amount of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

Answer 35

units-of-production

Question 36

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 year of 15,000 hours. it is to be depreciated by the units-of-production method

Answer 36

$35,000

Question 37

equipment with a cost of $220,000 has an estimated residual value of $30,000 and an estimated life of 1 year for 19,000 hours

Answer 37

$19,000

Question 38

on December 31, Strike Company has decided to discard one of it’s batting cages …………………………………………………………………………………
………………………………………………………………………………………
The following will be included in the entry to record the disposal

Answer 38

Equipment credit $310,000

Question 39

on December 31, Strike Company has decided to discard one of it’s batting cages ………………………………………………………………………………………..
……………………………………………………………………………………………
What is the amount of the gain or loss on this transaction?

Answer 39

No gain or loss

Question 40

the exclusive right to use a certain name or symbol is called

Answer 40

Trademark

Question 41

Chang co. issued a $50,000, 120 day, discounted note to Guarantee Bank

Answer 41

$49,000

Question 42

the amount of federal income taxes withheld from an employee’s gross pay is recorded as a(n)

Answer 42

liability

Question 43

which of the following taxes would be deducted in determining an employee’s net pay?

Answer 43

FICA taxes

Question 44

Nebraska Inc. issues 3,000 shares of common stock for $45,000 .

Answer 44

(check) $30,000

Question 45

Kansas Company acquired a building valued at $210,000 for property tax purposes

Answer 45

(check) $180,000

Question 46

The charter of a corporation provides for the issuance of $100,000 shares of common stock

Answer 46

(check) $100,000

Question 47

The cumulative effect of the declaration and payment of of a cash dividend on a company’s financial statements is to

Answer 47

(check) decrease total assets and stockholders’ equity

Question 48

Texas Inc. has 10,000 shares of 6%, $125 par value cumulative preferred stock

Answer 48

(check) $75 per share

Question 49

how is treasury stock shown on a balance sheet

Answer 49

(check) as a decrease in stockholders’ equity

Question 50

A corporation purchased 1,000 shares of its own $5 par common stock at $10

Answer 50

(check) $0

Question 51

what is the total stockholders’ equity based on the following account balances?

Answer 51

(check) $640,000

Question 52

The Daytona Corporation began the current year with a retained earnings balance of $32,000.

Answer 52

(check) $34,000

Question 53

The price of a bond is equal to the sum of the interest payments and the face amount of the bonds

Answer 53

(check) false

Question 54

when the market rate of interest on bonds is higher than the contract rate, the bonds will sell at

Answer 54

(check) a discount

Question 55

On January 1 of the current year, the Barton Corporation issued 10% bonds with a face value of $200,000

Answer 55

(check) $21,800

Question 56

if $1,000,000 of 8% bonds are issued at 102 3/4, the amount of cash received from the sale is

Answer 56

(check) $1,027,000

Question 57

a corporation issues for cash $1,000,000 of 10%, 20 year bonds, interest payable annual at a time when the market rate of interest is 12%

Answer 57

(check) the amout of unamortized discount decreases from its balance at issuance date to a zero balance at maturity

Question 58

bonds payable has a balance of $1,000,000 and Discount on bonds payable has a balance of $10,000

Answer 58

(check) $15,000 gain