The following information is from the Income Statement of the Dirt Poor Laundry
Service:
The entry to close the Income Summary includes a:
a.credit to Income Summary for $2,450.
b.debit to Income Summary for $2,450.
c.debit to Retained Earnings for $2,450.
d.credit to Common Stock for $2,450.
Under IFRS, income statement items classified by nature are generally described as
a.administration, distribution, manufacturing, etc.
b.salaries, depreciation, utilities, etc.
c.administration, depreciation, manufacturing, etc.
d.salaries, distribution, utilities, etc.
Finney Company began the year by issuing $40,000 of common stock for cash. The
company recorded revenues of $370,000, expenses of $320,000, and paid dividends of
$20,000. What was Finney’s net income for the year?
a.$30,000
b.$70,000
c.$50,000
d.$90,000
The following partial amortization schedule is available for Courtney Company who
sold $500,000, five-year, 10% bonds on January 1, 2014 for $520,000 and uses annual
straight-line amortization.
Which of the following amounts should be shown in cell (iii)?
a.$10,000
b.$20,000
c.$4,000
d.$2,000
Walton Company collected $9,600 in May of 2013 for 4 months of service which would
take place from October of 2013 through January of 2014. The revenue reported from
this transaction during 2013 would be:
a.$0.
b.$7,200.
c.$9,600.
d.$2,400.
Hulse Corporation retires its $600,000 face value bonds at 105 on January 1, following
the payment of annual interest. The carrying value of the bonds at the redemption date
is $622,470. The entry to record the redemption will include a
a.credit of $22,470 to Loss on Bond Redemption.
b.debit of $22,470 to Premium on Bonds Payable.
c.credit of $7,530 to Gain on Bond Redemption.
d.debit of $30,000 to Premium on Bonds Payable.
The following amounts were taken from the financial statements of Ando Company:
The return on assets for 2014 is
a.16%.
b.14%.
c.32%.
d.28%.
Using the following data for Stevenson Industries, compute the return on assets ratio.
a.6.2%
b.10.4%
c.6.8%
d.11.4%
The following totals for the month of April were taken from the payroll records of Metz
Company.
The journal entry to record the monthly payroll on April 30 would include a
a.debit to Salaries and Wages Expense for $30,000.
b.credit to Salaries and Wages Payable for $30,000.
c.debit to Salaries and Wages Payable for $30,000.
d.debit to Salaries and Wages Expense for $19,905.
La More Company had the following transactions during 2013:
Sales of $4,500 on account
Collected $2,000 for services to be performed in 2014
Paid $1,875 cash in salaries for 2013
Purchased airline tickets for $250 in December for a trip to take place in 2014
What is La More’s 2013 net income using accrual accounting?
a.$2,875
b.$4,875
c.$4,625
d.$2,625
The following totals for the month of March were taken from the payroll records of
Kern Company.
The entry to record the accrual of federal unemployment tax would include a
a.credit to Federal Unemployment Taxes Payable for $432.
b.debit to Federal Unemployment Taxes Expense for $432.
c.credit to Payroll Tax Expense for $432.
d.debit to Federal Unemployment Taxes Payable for $432.
Collins Company borrowed $750,000 from BankTwo on January 1, 2013 in order to
expand its mining capabilities. The five-year note required annual payments of
$195,327 and carried an annual interest rate of 9.5%. What is the balance in the notes
payable account at December 31, 2014?
a.$750,000
b.$490,059
c.$625,923
d.$607,500
Given the data below for a firm in its first year of operation, determine net income
under the accrual basis of accounting.
a.$22,000
b.$31,000
c.$24,000
d.$15,000
A plant asset with a cost of $240,000 and accumulated depreciation of $228,000 is sold
for $28,000. What is the amount of the gain or loss on disposal of the plant asset?
a.$28,000 loss.
b.$16,000 loss.
c.$16,000 gain.
d.$28,000 gain.
Pop-up Party Favors Inc has the following inventory data:
A physical count of merchandise inventory on July 30 reveals that there are 32 units on
hand. Using the FIFO inventory method, the amount allocated to ending inventory for
July is
a.$620
b.$660
c.$640
d.$704
Dallison Company has an accounting fiscal year, which ends on June 30. The company
also has a policy of paying the weekly payroll on Friday. Payroll records indicate the
following salary costs were incurred.
Instructions:
(a)Prepare any necessary adjusting journal entries that should be made at year end on
June 30.
(b)Prepare the journal entry to record the payment of the weekly payroll on July 2
Clear Clarinets has the following inventory data:
Assuming that a periodic inventory system is used, what is the amount allocated to
ending inventory on a FIFO basis.
a.$10,932
b.$11,022
c.$23,088
d.$23,118
What do freight terms of FOB shipping point indicate?
a.The seller places the goods free on board the carrier, and the seller pays for the goods.
b.Goods are placed free on board to the buyer’s place of business and the buyer deducts
the freight costs from the purchase price of the goods.
c.Goods are placed free on board to the buyer’s place of business and the seller pays the
freight costs.
d.The seller places the goods free on board the carrier, and the buyer pays for the freight
costs.