Practice Final Exam Questions Flashcards
If something is likely to influence the decision of an investor or creditor this item would be considered what?
A material item
If a firm is collection $600 dollars on Accounts Receivable than what is happening to the assets of the firm?
One Asset will increase / and one asset will decrease. More specifically the AR asset account will decrease while the cash asset account will increase
Many times transactions affect more than one time period. In order to deal this what kind of accounting entry is made?
An Adjusting Entry must be made
On January 31st 2012 the balance in Goebel Inc.’s supplies account was $500. During February Goebel purchased supplies of $600 and used supplies and used $800 of supplies. What was the supplies account balance at the end of the of Febuary?
500+600-800=300 in the debit supplies asset account
If you take the current assets and DIVIDE current liabilities what will the answer give you for you accounts?
Your working capital
Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they pay $250,000 of their accounts payable what will their new current ration be?
2.7:1
In order to be relevant must be one of the following: A)capable of making a difference in a decision B)be presented on the balance sheet C)be recorded at historical cost D) improve the company’s internal control
Be capable of making a difference in a decision
A firm that is easy to transfer the ownership of, raise funds, and has no personal liability would defined as a partnership or corporation?
A corporation has these traits
Raxon Company borrowed $30,000 from the bank signing a 6%, 3-month note on September 1st: Principal and interest are payable to the bank on December 1st. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30 would be what?
Debit note payable: $1,800 Credit Cash: $1,800
Events that change a company’s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received would be considered what type of accounting?
This is under the Accrual basis of accounting
The journal entry to record a return of merchandise purchased on an account under a perpetual inventory system would credit what account?
Merchandise Inventory
The collection of an $800 account within the 2% discount period would result in an entry in what account?
Debit Sales Discount for $16
If a transaction for equipment purchase totaling $20,000 takes place by putting $5,000 Cash down and then signing a notes payable for the remainder what would the journal entry include?
Credit to Notes Payable
This is the totals for Barnes Company at the end of its first year Cash-$14,000 Prepaid Insurance-$700 AR-$3,500 AP-$2,800 NP-$4,200 Common Stock-$5,400 Dividends-$700 Revenues-$24,000 Expenses-$17,000 With the above in mind what did Barnes Company show as total credits on its trial balance? This is assuming normal balances are in every account
Credits totaled:=$36,400
The cumulative effect of the declaration and payment of a cash dividend on a company’s financial statement is to do what?
Decrease total assets and stockholders equity
La More Company had the following transactions during 2011: Sales of $4500 on account Collected $2,000 for service to be performed in ‘12 Paid $1375 Cash in salaries for 2011 Purchased airline tickets for $250 in December for a trip to take place in 2012 What is La More’s 2011 Net income using Accrual based accounting?
$3,125
Sampson Company’s accounting records sow the following at the year ending on December 31 2012 Purchase Discount-$5600 FrieghtIN-$7800 Purchases-$300,010 Beginning Inventory-$23,500 Ending Inventory-$28,800 Purchase Returns-$6400 Using the periodic system what is the cost of goods sold?
$290,510
On December 31st 2012 Mohling Company’s inventory records indicated a balance of $652,000. Upon Further Investigation it was determined that this amount included the following: $112,000 in inventory purchases made by Mohling shipped from the seller 12/27/12 terms FOB destination but not due to be received until January 2nd $74,000 in goods sold by Mohling with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th $6,000 of goods received on consignment from Dollywood Company With this in mind what is Mohlings correct ending inventory ending balance at December 31st 2012?
$534,000
Which of the following is NOT an objective of a system of internal controls? Safeguard company assets Overstate Liabilities in order to be conservative Enhance the accuracy and reliability of accounting records Reduce the risk of errors
Overstate liabilities in order to be conservative
A very small company would have the most difficulty in implementing which of the following internal control activities? Separation of duties Limited access to assets periodic independent verification sound personnel procedures
Separation of duties
Dobler Company uses a periodic inventory system. Details of the inventory account for the month of January are as follows:
Date–Units—PUP——TOTAL
1/1/12–200–$5.00–$1,000
1/15/12–100–$5.30–$530
1/28/12–100–$5.50–$550
An end of the month inventory showe that 140 units were on hand. If the company uses FIFO what is the value of the ending inventory?
$762
When there is a period of rising prices which of the following inventory methods generally result in the lowest net income figures?
LIFO Method
Below is the following records for Redecker’s inventory.
2012——2011——2010
$34,580–$27,650–$30,490==Ending Inventory
$182,000-$178,000-$174,200==COGS
With the above in mind what is Redeckers inventory turnover ration for 2011? (rounded)
6.1 Times
Operating Expenses—$21,000
Sales Returns & Allowances–$7,000
Sales Discounts–$3,000
Sales Revenue–$150,000
COGS–$105,000
With the financial information presented above what is the gross profit rate of this company?
.25
