1) if the retained earnings account increases from the beginning of the year to the end of
the year, then
a.net income is less than dividends
b.a net loss is less than dividends
c.additional investments are less than net losses
d.net income is greater than dividends
2) in 2012 grider corporation had cash receipts of $42,000 and cash disbursements of
$24,000. griders ending cash balance at december 31, 2012 was $66,000. what was
griders beginning cash balance?
a.$48,000
b.$60,000
c.$90,000
d.$84,000
3) accounting information should be neutral in order to enhance
a.faithful representation
b.consistency
c.comparability
d.relevance
4) a company has a receivables turnover ratio of 10. the average net receivables during
the period are $600,000. what is the amount of net credit sales for the period?
a.$60,000
b.$6,000,000
c.$720,000
d.cannot be determined from the information given
5) the following information is from the income statement of the dirt poor laundry
service:
the entry to close the expense accounts includes a:
a.credit to income summary for $2,550
b.debit to income summary for $2,550
c.debit to wages expense for $1,450
d.credit to retained earnings for $2,550
6) qualitative characteristics associated with faithfully representative accounting
information are
a.verifiable and timely
b.materiality and neutral
c.neutral and verifiable
d.relevance and verifiable
7) the following totals for the month of april were taken from the payroll register of noll
company.
the entry to record accrual of employers payroll taxes would include a
a.debit to payroll tax expense for $992
b.debit to payroll tax expense for $3,192
c.credit to fica taxes payable for $4,400
d.credit to payroll tax expense for $992
8) tangible frauds include
a.asset misappropriation
b.false pretenses
c.counterfeiting
d.all of the above
9) which of the following companies would most likely have the highest inventory
turnover?
a.an art gallery
b.an automobile manufacturer
c.a piano manufacturer
d.a bakery
10) the term “receivables” refers to
a.amounts due from individuals or companies
b.merchandise to be collected from individuals or companies
c.cash to be paid to creditors
d.cash to be paid to debtors
11) if a retailer regularly sells its receivables to a factor, the service charge of the factor
should be classified as a(n)
a.selling expense
b.interest expense
c.other expense
d.contra asset
12) a characteristic of a plant asset is that it is
a.intangible
b.used in the operations of a business
c.held for sale in the ordinary course of the business
d.not currently used in the business but held for future use
13) prepaid expenses are:
a.paid and recorded in an asset account before they are used or consumed
b.paid and recorded in an asset account after they are used or consumed
c.incurred but not yet paid or recorded
d.incurred and already paid or recorded
14) why do generally accepted accounting principles require the application of the
revenue recognition principle?
a.failure to apply the revenue recognition principle could lead to a misstatement of
revenue
b.it is easy to apply the revenue recognition principle because revenue issues are always
easy to identify and resolve
c.recording revenue when cash is received is an objective application of the revenue
recognition principle
d.accounting software has made the revenue recognition easy to apply
15) a company with $60,000 in current assets and $40,000 in current liabilities pays a
$1,000 current liability. as a result of this transaction, the current ratio and working
capital will
a.both decrease
b.both increase
c.increase and remain the same, respectively
d.remain the same and decrease, respectively
16) snelling tables paid employee wages on and through friday, january 26, and the next
payroll will be paid in february. there are three more working days in january (2931).
employees work 5 days a week and the company pays $800 a day in wages. what will
be the adjusting entry to accrue wages expense at the end of january?
17) a check correctly written for $370 was incorrectly entered in the cash payments
journal for $730. in preparing a bank reconciliation, $____________ must be
______________ the cash balance per ______________.
18) accrued revenues are revenues that have been earned but cash has not been received
before financial statements have been prepared.
19) accrued revenues are revenues that have been earned but not yet recorded.
20) retro company is authorized to issue 10,000 shares of 8%, $100 par value preferred
stock and 500,000 shares of no-par common stock with a stated value of $1 per share. if
retro issues 6,000 shares of preferred stock for land with an asking price of $750,000
and a market value of $660,000, which of the following would be the best journal entry
for retro to record?
21)
grier food store used the following information in recording its bank reconciliation for
the month of april.
(1)checks written in april but still outstanding $7,300.
(2)checks written in march but still outstanding $2,800.
(3)deposits of april 30 not yet recorded by bank $4,900.
(4)nsf check of customer returned by bank $500.
(5)check no. 210 for $594 was correctly issued and paid by bank but incorrectly entered
in the cash payments journal as payment on account for $549.
(6)bank service charge for april was $40.
(7)a payment on account was incorrectly entered in the cash payments journal and
posted to the accounts payable subsidiary ledger for $824 when check no. 318 was
correctly prepared for $284. the check cleared the bank in april.
(8)the bank collected a note receivable for the company of $5,000 plus $240 interest
revenue.
instructions
prepare a bank reconciliation at april 30.
22) before month-end adjustments are made, the february 28 trial balance of coles
enterprise contains revenue of $11,000 and expenses of $8,600. adjustments are
necessary for the following items:
depreciation for february is $1,200.
revenue earned but not yet billed is $2,800.
accrued interest expense is $900.
revenue collected in advance that is now earned is $2,500.
portion of prepaid insurance expired during february is $500.
instructions:
calculate the correct net income for cole’s enterprise for february 3.