When a bond issued at face value is retired, the journal entry would include:
A) debit Bond Interest Expense.
B) debit Bonds Payable.
C) credit Cash.
D) Both B and C
The write-off of an intangible asset is called:
A) depreciation.
B) amortization.
C) impairment.
D) deterioration.
The entry establishing a $200 petty cash fund would include a:
A) debit to Cash for $200.
B) credit to Petty Cash for $200.
C) debit to Petty Cash for $200.
D) debit to Miscellaneous Expense for $200.
Which of the following accounts would NOT appear on the Balance Sheet?
A) Accumulated Depreciation
B) Rent Expense
C) Equipment
D) Cash
B. Benson’s worksheet showed the revenue account, Rental Fees, $1,300. The journal
entry to close the account is:
A)
B)
C)
D)
A lot ticket is a:
A) document prepared to show the movement of materials or products between
departments.
B) document used to order materials or supplies from the storeroom.
C) document used for charging material to production.
D) None of these answers is correct.
Which of the following would be a direct expense of a sales department?
A) Sales salaries
B) Administrative expense
C) Advertising expense
D) Both A and C
Important principles of internal control include:
A) that payment can be made without an approved voucher.
B) that all transactions are backed with documentation.
C) no separation of duties.
D) All of these answers are correct.
What is the purpose for determining contribution margin?
A) To show the contribution by department toward covering indirect costs
B) To help determine whether or not to eliminate a department
C) To show the effect on net income for each department
D) All of these answers are correct.
Partner B invested inventory using the retail selling price for valuation. Some of the
inventory is unsold at period end. This error would cause:
A) the period’s net income to be overstated.
B) the period’s net income to be understated.
C) the ending assets to be overstated.
D) Both B and C are correct.
Ariel Investigations has total paid-in capital of $70,000 and retained earnings of
$40,000. It has 100 shares of $100 par value common stock outstanding, and no
preferred shares outstanding.. The book value of each share of common stock is:
A) $400
B) $700.
C) $1,100.
D) $1,000
ABC sells 400 shares of its $20 par common stock for $25. The entry would entail a
credit(s) of:
A) Cash of $10,000.
B) Paid-in Capital in Excess of Par Value-Common for $8,000; Common Stock for
$2,000.
C) Paid-in Capital in Excess of Par Value-Common for $2,000; Common Stock for
$8,000.
D) Common Stock for $10,000.
Interest Expense is:
A) a cost of borrowing money.
B) included in the “Other Expenses” on the income statement.
C) has a normal debit balance.
D) All of the above are correct.
A truck that cost $28,000 has been owned for 3 years and is traded for another truck for
the same purpose. Total accumulated depreciation at the time of trade is $17,600. The
trade-in value of the old truck is $10,000 and the new truck has a fair market value of
$32,000, the new truck would be recorded at:
A) $32,000.
B) $32,400.
C) $29,400.
D) $28,400.
The voucher register in a voucher system is known as the:
A) book of final entry.
B) book of original entry.
C) book of vouchers.
D) voucher journal.
The real or actual rate of interest to the borrowing corporation is called the:
A) stated rate of interest.
B) effective rate of interest.
C) discount rate of interest.
D) premium rate of interest.
The general journal does NOT have a column titled:
A) Date.
B) Account Titles & Descriptions.
C) Dr. and Cr.
D) Balance.
Manning Corporation sells $100,000, 12%, 10-year bonds for 98 on January 1. Interest
is paid on January 1 and July 1. Straight-line amortization is used. The entry to record
the issuance of the bonds on January 1 is:
A)
B)
C)
D)
Max’s Art studio was moving and sold furniture that was no longer needed for cash. The
entry would include:
A) a credit to Sales.
B) a debit to Sales.
C) a credit to Furniture.
D) a credit to Cash.
If the balance of supplies at the start of the month was $900 and at the end of the month
you had $450 on hand, the adjustment for Supplies would be:
A) $450.
B) $550.
C) $350.
D) $900.
When counting supplies, several boxes were missed. This would cause:
A) Supplies to be overstated.
B) Supplies Expense to be overstated.
C) Net Income to be overstated.
D) All of the above are correct.
Using the following data, make the adjustments, and complete the worksheet for one
month.
a. Equipment costing $750 with a residual value of $150 has an expected life of 12
months.
b. Accrued salaries of $100.
c. Supplies ledger balance $900, supplies used $400.
Account Trial Balance Adjustments Adj. Trial Bal Inc. Statement Balance Sheet
Comparative reports in which each item is expressed as a percentage of a base amount
without dollar amounts are called:
A) comparative financial statements.
B) common-size statements.
C) cash flow analysis.
D) horizontal analysis.
The two types of allowances that may be considered before the division of profits and
losses are:
A) interest and salary allowances.
B) interest and bonus allowances.
C) salary and bonus allowances.
D) bonus and liquidation allowances.
The sale of common stock above par was recorded by crediting Common Stock for the
total amount. This error would cause:
A) the period end stockholders’ equity to be overstated.
B) the period end stockholders’ equity to be understated.
C) no effect on total stockholders’ equity.
D) None of these is correct.
Journal entries crediting Payroll Payable and debiting Work-in-Process Inventory are
made for:
A) administrative salaries.
B) hourly manufacturing labor.
C) foremen’s salaries.
D) raw materials.
A FUTA tax credit:
A) is given to employers who pay their state unemployment taxes on time.
B) is usually in the amount of 5.4%
C) is applied against the 6.0% standard rate.
D) All of the above are correct.
St. Paul Corporation had a beginning inventory of $2,500 which would retail for
$4,000. They made $9,000 in purchases which would retail at $14,400. The sales for the
period were $15,000. What is the estimated cost of ending inventory under the retail
inventory method?
A) $1,500
B) $3,400
C) $4,000
D) $2,125
Which of the following is NOT an operating expense?
A) Payroll Tax Expense
B) Freight-in
C) Supplies Expense
D) Depreciation Expense – Office Equipment
Assets that are expected to provide benefits for a number of accounting periods are
called:
A) current assets.
B) fixed assets.
C) long-term assets.
D) property, plant, and equipment.
The interest rate on which interest payments to bondholders are based is the:
A) market rate.
B) discount rate.
C) contract rate.
D) amortization rate.