Equipment was purchased for $96,000 and has a book value of $32,000 and a
depreciable cost of $80,000. The estimated salvage value is
a. $32,000.
b. $64,000.
c. $48,000.
d. $16,000.
Answer:
The major IFRS requirements related to accounting for and reporting inventories are
a. the same as GAAP.
b. the same as GAAP with a couple of exceptions.
c. completely different from GAAP.
d. not comparable to GAAP.
Answer:
Pan Inc. has an investment in available-for-sale securities of $70,000. This investment
experienced an unrealized loss of $6,000 during the current year. Assuming a 35% tax
rate, the effect of this loss on comprehensive income will be
a. no effect.
b. $70,000 increase.
c. $24,500 decrease.
d. $6,000 decrease.
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:
A $900,000, 5%, 20-year bond was issued at 99. The proceeds received from the bond
issuance are
a. $900,000.
b. $891,000.
c. $918,000.
d. $882,000.
Answer:
The primary purpose of the statement of cash flows is to report
a. a company’s investing transactions.
b. a company’s financing transactions.
c. information about cash receipts and cash payments of a company.
d. the net increase or decrease in cash.
Answer:
The one characteristic that all entries recorded in a cash receipts journal have in
common is
a. a credit to the Cash account.
b. that they all represent collections from customers.
c. that they originate from the sales of merchandise.
d. a debit to the Cash account.
Answer:
Electrelane Company showed the following balances at the end of its first year:
What did Electrelene Company show as total credits on its trial balance?
a. $9,000
b. $44,000
c. $45,000
d. $49,000
Answer:
If Income Summary has a credit balance after revenues and expenses have been closed
into it, the closing entry for Income Summary will include a
a. debit to the retained earnings account.
b. debit to the dividends account.
c. credit to the retained earnings account.
d. credit to the dividends account.
Answer:
If the total debits exceed total credits in the balance sheet columns of the worksheet,
stockholders’ equity
a. will increase because net income has occurred.
b. will decrease because a net loss has occurred.
c. is in error because a mistake has occurred.
d. will not be affected.
Answer:
Net income is gross profit less
a. financing expenses.
b. operating expenses.
c. other expenses and losses.
d. other expenses.
Answer:
The net amount expected to be received in cash from receivables is termed the
a. cash realizable value.
b. cash-good value.
c. gross cash value.
d. cash-equivalent value.
Answer:
Netta Shutters has the following inventory information.
A physical count of merchandise inventory on November 30 reveals that there are 90
units on hand. Assume a periodic inventory system is used. Ending inventory under
FIFO is
a. $738.
b. $792.
c. $1,740.
d. $1,794.
Answer:
Frank White the new controller of Youngman Company, has reviewed the expected
useful lives and salvage values of selected depreciable assets at the beginning of 2015.
His findings are as follows.
All assets are depreciated by the straight-line method. Youngman Company uses a
calendar year in preparing annual financial statements. After discussion, management
has agreed to accept Frank’s proposed changes.
Instructions
(a) Compute the revised annual depreciation on each asset in 2015. (Show
computations.)
(b) Prepare the entry (or entries) to record depreciation on the building in 2015.
Answer:
Assume the following cost of goods sold data for a company:
If 2014 is the base year, what is the percentage increase in cost of goods sold from 2014
to 2016?
a. 70.4%
b. 42%
c. 85.7%
d. 117%
Answer:
During 2015, Zuma Company had $150,000 in cash sales and $1,240,000 in credit
sales. The accounts receivable balances were $180,000 and $215,000 at December 31,
2014 and 2015, respectively. Using the direct method of reporting cash flows from
operating activities, what was the total cash collected from all customers during 2015?
a. $1,205,000
b. $1,425,000
c. $1,390,000
d. $1,355,000
Answer:
If the fair value of an available-for-sale security exceeds its cost, the security should be
written up to fair value and a realized gain should be recognized.
Answer:
The employer incurs a payroll tax expense equal to the amount withheld from the
employees’ wages for federal income taxes.
Answer:
An account is often referred to as a T-account because of the way it is constructed.
Answer:
Stock can be issued only in exchange for cash.
Answer:
A liability’”revenue account relationship exists with an unearned rent revenue adjusting
entry.
Answer:
Companies record a gain or loss on the exchange of plant assets because most
exchanges have commercial substance.
Answer:
Specific Identification can be used for inventory valuation under
Answer:
Selected data from Decco Company are presented below:
Instructions
Calculate the profitability ratios that can be computed from the above information.
Answer:
