Which of the following would not be considered internal users of accounting data for a
company?
a. The president of a company.
b. The controller of a company.
c. Creditors of a company.
d. Salesmen of the company.
Answer:
Vega Corporation’s December 31, 2015 balance sheet showed the following:
Vega’s total stockholders’ equity was
a. $24,669,000.
b. $24,690,000.
c. $25,269,000.
d. $24,639,000.
Answer:
The respective normal account balances of Purchases, Purchase Discounts, and
Freight-in are
a. credit, credit, debit.
b. debit, credit, credit.
c. debit, credit, debit.
d. debit, debit, debit.
Answer:
The paneling of the body of an open pickup truck would be classified as a(n)
a. revenue expenditure.
b. addition.
c. improvement.
d. ordinary repair.
Answer:
Generally, the most important category on the statement of cash flows is cash flows
from
a. operating activities.
b. investing activities.
c. financing activities.
d. significant noncash activities.
Answer:
The following information pertains to Ortiz Company. Assume that all balance sheet
amounts represent both average and ending balance figures. Assume that all sales were
on credit.
What is the profit margin for Ortiz?
a. 113%
b. 28.2%
c. 69%
d. 78%
Answer:
The adjusted trial balance for Molina Company is presented below.
Molina made an error during year when they debited Utilities Expense for $2,000
instead of Equipment for a cash purchase of equipment. In addition, Molina failed to
accrue $4,000 of Service Revenue.
Instructions
[a) Prepare an income statement and a retained earnings statement for the year.
[b) Prepare a classified balance sheet at July 31.
Answer:
The retailer considers Visa and MasterCard sales as
a. cash sales.
b. promissory sales.
c. credit sales.
d. contingent sales.
Answer:
The specific identification method of costing inventories is used when the
a. physical flow of units cannot be determined.
b. company sells large quantities of relatively low cost homogeneous items.
c. company sells large quantities of relatively low cost heterogeneous items.
d. company sells a limited quantity of high-unit cost items.
Answer:
Long Company recently incurred the following costs:
The building should be recorded on Long’s books at
a. $580,000.
b. $624,000.
c. $663,000.
d. $892,000.
Answer:
A chart of accounts for a business firm
a. is a graph.
b. indicates the amount of profit or loss for the period.
c. lists the accounts and account numbers that identify their location in the ledger.
d. shows the balance of each account in the general ledger.
Answer:
Related buying activities include
a. ordering, receiving, paying.
b. ordering, selling, paying.
c. ordering, shipping, billing.
d. selling, shipping, paying.
Answer:
When there has been a change in accounting principle,
a. the old principle should be used in reporting the results of operations for the current
year.
b. the cumulative effect of the change should be reported in the current year’s retained
earnings statement.
c. the change should be reported retroactively.
d. the new principle should be used in reporting the results of operations of the current
year, but there is no change to prior years.
Answer:
A post-closing trial balance will show
a. only permanent account balances.
b. only temporary account balances.
c. zero balances for all accounts.
d. the amount of net income (or loss) for the period.
Answer:
The following information pertains to Ortiz Company. Assume that all balance sheet
amounts represent both average and ending balance figures. Assume that all sales were
on credit.
What is the accounts receivable turnover for Ortiz?
a. 1.3 times
b. 1.1 times
c. 2.8 times
d. 12.7 times
Answer:
In a defined contribution plan, an employer only recognizes pension expense for the
amount that the employer is required to contribute under the plan.
Answer:
Unearned revenue is a prepayment that requires an adjusting entry when services are
performed.
Answer:
The primary purpose of the statement of cash flows is to provide information about the
cash receipts and cash payments of a company during a period.
Answer:
If bonds sell at a premium, the interest expense recognized each year will be greater
than the contractual interest rate.
Answer:
On March 9, Phillips gave Jackson Company a 60-day, 12% promissory note for
$5,200. Phillips dishonors the note on May 8. Record the entry that Jackson would
make when the note is dishonored, assuming that no interest has been accrued.
Answer: