1) All costs of the processes in a process costing system ultimately pass through the
Cost of Goods Sold account.
2) A chart of accounts is a listing of accounts that make up the journal.
3) After the sales budget is prepared, the capital expenditures budget is normally
prepared next.
4) The last step in the accounting procedure for process costing is the calculation of
equivalent units of production.
5) Sarno has a capital balance of $42,000 after adjusting the assets to fair market value.
Minton contributes $22,000 to receive a 30% interest in the new partnership. The bonus
paid by Minton is $2,800.
6) Balance Sheet accounts are not considered real accounts.
7) A voucher system is an example of an internal control procedure over cash payments.
8) Although Allowance for Doubtful Accounts normally has a credit balance, it may
have either a debit or a credit balance before adjusting entries are recorded at the end of
the accounting period.
9) Posting a part of a transaction to the wrong account will cause the trial balance totals
to be unequal.
10) The chart of accounts should be the same for each business.
11) The interest on a 6%, 60-day note for $5,000 is $300.
12) Standard costs are determined by multiplying expected price by expected quantity.
13) Patents are exclusive rights to manufacture, use, or sell a particular product or
process.
14) The main objective for all business is to maximize unrealized profits.
15) Vision Service Company has the following debits and credits from two transactions
presented in a customer account:
NAME: Roswell Communications, Inc.
Address: 345 Alien Way
Describe each transaction and the source of each posting.
16) Convert each of the following estimates of useful life to a straight-line depreciation
rate, stated as a percentage.
17) The accountant for Franklin Company prepared the following list of account
balances from the companys records for the year ended December 31, 2011:
Determine the total liabilities at the end of 2011 for Franklin Company.
18) On August 1, 2011, Airport Company sold Paxton Company $1,000,000 of 10-year,
6% bonds, dated July 1 at 100 plus accrued interest. On March 1, 2012, Paxton sold
half of the bonds for $520,000 plus accrued interest. Present entries to record the
following transactions:
19) Cuisine Inc. manufactures flatware sets. The budgeted production is for 80,000 sets
in 2012. Each set requires 2.5 hours to polish the material. If polishing labor costs
$15.00 per hour, determine the direct labor budget for 2012.