Returned merchandise paid for within the discount period for a Cash refund. This will
be recorded with:
A) a credit to a liability.
B) a credit to an asset.
C) a debit to a liability.
D) a debit to an asset.
Which of the following will decrease owner’s equity?
A) An exchange of assets
B) The purchase of an asset on credit
C) An investment by the owner
D) A withdrawal by the owner
The carrying value of bonds is calculated by:
A) adding the Premium on Bonds Payable account balance from the Bonds Payable
account balance.
B) subtracting the Premium on Bonds Payable account balance from the Bonds Payable
account balance.
C) subtracting the Discount on Bonds Payable account balance from the Bonds Payable
account balance.
D) adding the Bonds Payable account balance to the Bond Interest Payable account
balance.
A statement of partner’s equity is the same as a statement of owner’s equity except:
A) there is a capital account for each partner.
B) net income is assigned to one partner.
C) no additional investment by partners is shown on the statement.
D) There is no difference in the statements.
What type of an account is the petty cash fund?
A) Contra-asset
B) Expense
C) Asset
D) Liability
After posting the closing entries, which of the following accounts is most likely NOT to
have a zero balance?
A) Prepaid Insurance Expense
B) Advertising Expense
C) J. Smith, Withdrawals
D) Medical Fees Earned
As Unearned Rent Revenue is earned, it becomes:
A) an asset.
B) a revenue.
C) a liability.
D) an expense.
The last entry to liquidate a partnership would probably include:
A) debit to Capital (for each partner); credit to Cash.
B) debit to Cash; debit or credit to Loss or Gain from Realization; credit to individual
assets sold.
C) debit to individual assets sold; credit to Cash.
D) None of the above
Shelly’s cumulative earnings before this pay period were $7,200 and gross pay for the
week is $1,000. Assuming the wage base limit is $7,000, how much of this week’s pay
is subject to taxes for FUTA and SUTA?
A) $900
B) $200
C) $0
D) $500
Dolly’s Best issued 200 shares of its $10 common stock in exchange for used packaging
equipment with a fair market value of $2,400. The entry to record the acquisition of the
equipment would include a:
A) debit to Equipment for $2,000.
B) credit to Paid-in Capital in Excess of Par Value-Common for $400.
C) credit to Common Stock for $2,400.
D) credit to Equipment for $2,400.
The Cutcut Mower Service owned a truck with an original cost of $75,000 on which
there is accumulated depreciation of $55,000. The truck is exchanged for a new truck
priced at $90,000 with a trade-in allowance of $12,000 and the balance in cash.
a. The book value of the old truck is ________.
b. The loss on the exchange is ________.
c. The cost basis in the new truck, assuming accounting rules is ________.
A credit to an asset account was posted to a revenue account. This would cause:
A) assets to be understated.
B) liabilities to be overstated.
C) capital to be understated.
D) revenue to be overstated.
Using the straight-line method, the semiannual interest expense of a 10%, $200,000
bond for 10 years at 102 would be:
A) $20,000.
B) $10,000.
C) $9,800.
D) $10,200.
The Accounts Payable account is:
A) a capital, and it has a normal debit balance.
B) an expense, and it has a normal credit balance.
C) a liability, and it has a normal debit balance.
D) a liability, and it has a normal credit balance.
A debit memorandum decreases which account on the buyer’s books?
A) Accounts Payable
B) Purchases Returns and Allowances
C) Sales Returns and Allowances
D) Sales Discount
When merchandise is bought for resale, which of the following accounts would be
decreased?
A) Store Equipment
B) Purchases
C) Cash
D) Capital
A record showing the activity and the balances owed by each customer is called the:
A) accounts payable journal.
B) sales journal.
C) cash receipts journal.
D) accounts receivable subsidiary ledger.
If Robert worked 39 hours, how many hours of overtime will Robert earn?
A) 0
B) 1
C) 9
D) 4
When a stock dividend is distributed, the account to be debited would be:
A) Common Stock.
B) Paid-in Capital in Excess of Par Value.
C) Stock Dividends Distributable.
D) stock dividends.
A(n) ________ is used for every cash payment made.
A) invoice
B) voucher
C) purchase order
D) purchase requisition
Advantages of on-line banking include:
A) convenience.
B) transaction speed.
C) effectiveness.
D) All of the above are correct.
The adjusting entry to record depreciation for the company automobile would be:
A) debit Cash; credit Accumulated Depreciation, Automobile.
B) debit Accumulated Depreciation, Automobile; credit Automobile.
C) debit Depreciation Expense, Automobile; credit Accumulated Depreciation,
Automobile.
D) debit Depreciation Expense, Automobile; credit Automobile.
The journal entry to close a net income to the partners is to:
A) debit Income Summary; credit the capital accounts.
B) credit Income Summary; debit the capital accounts.
C) credit Net Loss; debit the capital accounts.
D) debit Net Loss; credit the capital accounts.
The financial statement(s) that cannot be broken down by departments would be:
A) income statement.
B) balance sheet.
C) statement of owner’s equity.
D) All of these answers are correct.
The following data are available for Jackson Company.
Annual estimated manufacturing overhead costs $ 90,000
Actual manufacturing overhead costs in May 16,200
Annual estimated direct labor hours 30,000
Actual direct labor hours in May 6,000
Required:
a. Compute the predetermined rate based on direct labor hours.
b. Prepare the journal entry to record the applied overhead for the month of May.
For a corporation, a premium on bonds results when:
A) the contract rate is greater than the market rate.
B) the contract rate is less than the market rate.
C) the face value is greater than the effective rate.
D) None of these answers is correct.
Which of the following is a cash outflow from a financing activity?
A) A purchase of inventory
B) A purchase of treasury stock
C) A payment to buy property
D) A loan made to a third party
The payment of semiannual interest on 12%, $60,000 bonds issued at par would be to:
A) debit Bond Interest Expense $3,600; credit Cash $3,600.
B) debit Bond Interest Expense $7,200; credit Cash $7,200.
C) debit Cash $1,800; credit Bond Interest Expense $1,800.
D) debit Bond Interest Expense $1,800; credit Cash $1,800.
An advantage of a corporation would be:
A) limited liability for the shareholders.
B) limited life.
C) double taxation (income of corporation and dividends to shareholders).
D) both A and B are correct.
Applying the interest allowance method, compute Taylor and Timmy’s share of net
income if Taylor invested $300,000 and Timmy invested $700,000 at a 6% interest rate,
with the remainder to be divided equally. Net income was $80,000.
A) Taylor, $24,000; Timmy, $56,000
B) Taylor, $40,000 Timmy, $40,000
C) Taylor, $28,000; Timmy, $52,000
D) None of these answers is correct.
The adjustment for accrued salaries would be to:
A) debit Salaries Expense; credit Cash.
B) debit Salaries Payable; credit Salaries Expense.
C) debit Salaries Expense; credit Salaries Payable.
D) debit Salaries Payable; credit Cash.
Using the following accounts:
[1] Cash
[2] Bond Sinking fund
[3] Equipment
[4] Building
[5] Land
[6] Accounts payable
[7] Notes payable
[8] Bond payable
[9] Bond interest payable
[10] Premium on bonds payable
[11] Discount on bonds payable
[12] Common stock
[13] Retained earnings
[14] Sinking fund earned
[15] Bond interest expense
[16] Gain on retirement
[17] Loss on retirement
Indicate the account(s) to be debited and credited to record the following transactions.
Issued bonds at a value above face value in exchange for equipment.
Debit ________ Credit ________
Prepare the journal entries for Mayhem Manufacturing:
June 10 Incurred organization costs totaling $7,500
June 14 Issued 10,000 shares of $11 par value common stock for $120,000
June 22 Issued 3,000 shares of 7%, $30 par value preferred stock for $120,000
Determine the beginning inventory of a business having:
Beginning Capital balance of $11,000
No additional investments or withdrawals
Net sales of $43,500
Net purchases $26,000
Ending inventory of $4,250
Ending Capital balance of $10,000
Operating expenses of $16,500
$ ________
Payments for ordinary maintenance of an asset are called ________.
Use the following information to answer the questions below:
The Net Sales are ________.
For each of the following, identify in Column 1 the category to which the account
belongs, in Column 2 the normal balance for the account, in Column 3 the financial
statement on which the account balance is reported, and in Column 4 the nature of the
account (permanent/temporary).
Prepare the closing entries from the following information on the PC Pros Company
worksheet income statement columns.
Income Statement
Debit Credit
Income Summary 5 6
Sales 30
Sales Ret. and Allow. 1
Purchases 20
Pur. Ret. and Allow. 2
Insurance Expense 3
Office Salaries Expense 1
Using the following accounts:
[1] Cash
[2] Subscription receivable-common stock
[3] Machinery
[4] Building
[5] Land
[6] Organization costs
[7] Preferred stock
[8] Common stock
[9] Paid in capital in excess of par value – preferred
[10] Paid in capital in excess of par value – common
[11] Common stock subscribed
[12] Discount on common stock
[13] Organization Expense
Indicate the account(s) to be debited and credited to record the following transaction.
Purchased machinery for cash.
Debit ________ Credit ________
Prepare general journal entries to record the following transactions for the Smith
Company. (The company uses the balance sheet approach for recording bad debts
expense.)
2015
Dec. 31 Recorded Bad Debts Expense, $900
2016
Jan. 3 Wrote off Jal’s account as uncollectible, $260
Mar. 4 Wrote off Hall’s account as uncollectible, $95
Jul. 5 Recovered $55 from Hall
Aug. 19 Wrote off M. Wilson’s account as uncollectible, $50
Nov. 7 Recovered $45 from Jal
For each of the following, identify in Column 1 the category to which the account
belongs, in Column 2 the normal balance for the account, in Column 3 the financial
statement on which the account balance is reported, and in Column 4 the nature of the
account (permanent/temporary).
Example:
Given the following accounts:
[1] Cash in bank
[2] Petty cash
[3] Supplies
[4] Equipment
[5] Notes payable
[6] Vouchers payable
[7] FICA payable
[8] Wages payable
[9] Purchases
[10] Purchase discounts
[11] Discounts lost
[12] Repairs expense
[13] Interest expense
[14] Delivery expense
Indicate the account(s) to be debited and credited to record the following transactions.
The company uses the periodic inventory method.
Paid voucher #426, payment was after the discount period.
Debit ________ & ________ Credit ________
For each of the following, identify in Column 1 the balance the account will have in the
adjusted trial balance columns (debit or credit), in Column 2 the financial statement
column(s) in which the account balance will be found (income statement or balance
sheet), and in Column 3 the effect the account will have on the determination of net
income (increase, decrease, or none).
From the following items in the income statement columns of the worksheet of
Monaghan Company at December 31, prepare the closing entries without explanation,
assuming that a $500 withdrawal was made during the period.
For each of the following, identify in column 1 the category to which the account
belongs, in column 2 the normal balance for the account, in column 3 the financial
statement that the account in which the account balance is reported, and in column 4 the
account’s nature.
On the worksheet, the Income Statement debit column totaled $1100 and the credit
column totaled $2,000. What is the amount of Net Income?
$ ________
For each of the following, identify in Column 1 the balance the account will have in the
adjusted trial balance columns (debit or credit), in Column 2 the financial statement
column(s) in which the account balance will be found (income statement or balance
sheet), and in Column 3 the effect the account will have on the determination of net
income (increase, decrease, or none).