On the balance sheet, the cumulative amount of plant and equipment already expensed
is reported in an account called
a. Accumulated Amortization
b. Accumulated Depreciation
c. Amortization Expense
d. Depreciation Expense
What does the phrase, “Revenue is recognized at the point of sale” mean?
a. Revenue is recorded in the accounting records when the goods are received from a
supplier, and reported on the income statement when sold to the customer.
b. Revenue is recorded in the accounting records and reported on the income statement
when the cash is received from the customer.
c. Revenue is recorded in the accounting records when the goods are sold to a customer,
and reported on the income statement when the cash payment is received from the
customer.
d. Revenue is recorded in the accounting records and reported on the income statement
when goods are sold and delivered to a customer.
The inventory account a manufacturer uses to record the cost of products completed and
available for sale is called
a. Raw materials inventory
b. Work in process inventory
c. Finished goods inventory
d. Merchandise inventory
Sun City Corporation’s endÂofÂyear balance sheet consisted of the following amounts:
What amount should Sun City report on its balance sheet for total assets?
a. $100,000
b. $95,000
c. $165,000
d. $200,000
Use the incomplete stockholders’ equity section of Vargas Company’s balance sheet as
of December 31, 2015, to answer the following question. Common stock, $7 par,
100,000 shares authorized $700,000
Additional paidÂin capital-common 160,000
Retained earnings ?
Treasury stock (2,000 shares at cost) (16,000)
Total stockholders’ equity 974,000
What is the amount of Vargas’ retained earnings? a. $130,000b. $ 98,000c. $860,000d.
$114,000
Match the costs that might be included as part of the cost of inventory to the listed
accounting treatment. a. Add to inventory cost
b. Subtract from inventory cost
c. Not an inventory cost
Sales taxes paid on goods acquired
The stockholders’ equity section of Augusta, Inc. is as follows:
The market price of the stock on December 31, 2015, was $8 per share. Answer the
following independent questions: A) Calculate the average amount at which each share
of common stock was initially sold. B) What balance will be in the retained earnings
account immediately after the declaration of a 2- for-1 stock split? C) If a cash dividend
of $1 per share was declared to both common and preferred stockholders, what would
be the balance in retained earnings immediately after the declaration? D) What balance
will be in the retained earnings account immediately after the declaration of a 20%
common stock dividend on December 31, 2015?
Identify the classifications of the following accounts as either current or long-term
liabilities for the December 31, 2014 balance sheet.
a. Current liability
b. Long-term liability
An amount of money owed to the federal government based on the company’s annual
income.
There are some liabilities, such as income tax payable, for which the amounts must be
estimated. Failure to estimate these amounts and record them would be a violation of
the
a. matching principle
b. convention of conservation
c. practice of consistency
d. concept of historical cost
Calzone, Inc. signs a 9% 4-month $50,000 loan with Reliable Bank on October 1, 2015.
Determine the effects on the accounting equation for the following items: A. The
signing of the loan on October 1, 2015 by Calzone, Inc.
B. The recording of the interest on December 31, 2015 by Calzone, Inc.
Provided below is a list of important users of accounting information.Below the list are
descriptions of a major need of each of the various users. Fill in the blank with the one
user group that is most likely to have the need described to the right of the blank. Some
user groups may be used more than once or not at all.
a. Capital stock
b. Asset
c. Owners’ equity
d. Time period
e. Dividends
f. Economic entity concept
g. Expense
h. Retained earnings
i. Cost principle
j. Creditor
k. Liability
l. Revenue
m. Going concern
n. Monetary unit
o. Corporation
A distribution of the net income of a business to its owners.
Flannery Company uses a worksheet to prepare its statement of cash flows. The
company also uses the indirect method for the Operating Activities section of its
statement. For each of the following changes in the balance sheet, indicate what activity
it affects and whether it is an addition or deduction. a. Deducted from Operating activity
b. Added to Operating activity
c. Deducted from Investing activity
d. Added to Investing activity
e. Deducted from Financing activity
f. Added to Financing activity
Capital stock increased