1) which of the following would not be considered an external user of accounting data
for the julian company?
a.internal revenue service agent
b.management
c.creditors
d.customers
2) which of the following groups uses accounting information primarily to insure the
entity is operating within prescribed rules?
a.taxing authorities
b.regulatory agencies
c.labor unions
d.management
3) using the percentage of receivables method for recording bad debts expense,
estimated uncollectible accounts are $35,000. if the balance of the allowance for
doubtful accounts is $11,000 debit before adjustment what is the amount of bad debt
expense for that period?
a.$35,000
b.$11,000
c.$46,000
d.$27,000
4) at the beginning of the current period, emler corp. had balances in accounts
receivable of $200,000 and in allowance for doubtful accounts of $9,000 (credit).
during the period, it had net credit sales of $650,000 and collections of $570,000. it
wrote off as uncollectible accounts receivable of $5,000. however, a $3,000 account
previously written off as uncollectible was recovered before the end of the current
period. uncollectible accounts are estimated to total $22,000 at the end of the period.
instructions
(a)prepare the entries to record sales and collections during the period.
(b)prepare the entry to record the write-off of uncollectible accounts during the period.
(c)prepare the entries to record the recovery of the uncollectible account during the
period.
(d)prepare the entry to record bad debts expense for the period.
(e)determine the ending balances in accounts receivable and allowance for doubtful
accounts.
(f)calculate the net realizable value of the receivables at the end of the period.
5) a business organized as a corporation
a.is not a separate legal entity in most states
b.requires that stockholders be personally liable for the debts of the business
c.is owned by its stockholders
d.has tax advantages over a proprietorship or partnership
6) the double-entry system requires that each transaction must be recorded
a.in at least two different accounts.
b.in two sets of books.
c.in a journal and in a ledger.
d.first as a revenue and then as an expense.
7) la more company had the following transactions during 2011:
what is la mores 2011 net income using accrual accounting?
a.$3,375
b.$5,375
c.$5,125
d.$3,125
8) which of the following is not an irregular item on the income statement?
a.discontinued operations
b.extraordinary items
c.other revenues and expenses
d.loss on disposal of a significant component of a business
9) a machine that was purchased on january 1 for $15,000 has an estimated salvage
value of $3,000. if the machines depreciation rate is 20%, its annual depreciation is
a.$3,000
b.$12,000
c.$2,400
d.$3,600
10) the order of presentation of activities on the statement of cash flows is
a.operating, investing, and financing
b.operating, financing, and investing
c.financing, operating, and investing
d.financing, investing, and operating
11) accounts receivable are valued and reported on the balance sheet
a.in the investment section
b.at gross amounts less sales returns and allowances
c.at cash realizable value
d.only if they are not past due
12) an overstatement of ending inventory in one period results in
a.no effect on net income of the next period
b.an overstatement of net income of the next period
c.an understatement of net income of the next period
d.an overstatement of the ending inventory of the next period
13) all of the following statements regarding the financial statement presentation of
receivables are true except:
a.short-term receivables are reported in the current assets section of the balance sheet
b.the gross amount of receivables less the allowance for doubtful accounts is equal to
the net receivables
c.short-term receivables are reported above the short-term investments in the balance
sheet
d.companies report bad debts expense under ‘selling expenses” in the operating
expenses section of the income statement
14) an advantage of the corporate form of business is that
a.it has limited life
b.its owners personal resources are at stake
c.its ownership is easily transferable via the sale of shares of stock
d.it is simple to establish
15) the information below relates to the cash account in the ledger of remington
company.
balance september 1$25,720 cash deposited$96,000.
balance september 30$26,100 checks written$95,620.
the september bank statement shows a balance of $24,635 on september 30 and the
following memoranda.
at september 30, deposits in transit were $7,195, and outstanding checks totaled $3,575.
instructions
prepare the bank reconciliation at september 30
16) given the following adjusted trial balance, what will be the totals for the debit and
credit columns of the post-closing trial balance?
a.$3,585
b.$3,559
c.$3,698
d.$3,672
17) under the concept of establishment of responsibility, how many people should have
the ultimate responsibility?
a.everyone in the organization
b.an individual and his/her supervisor
c.only one individual
d.the ceo