The adjusted trial balance is prepared
a. after financial statements are prepared.
b. before the trial balance.
c. to prove the equality of total assets and total liabilities.
d. after adjusting entries have been journalized and posted.
Answer:
The daily cash count of cash register receipts made by department supervisors is an
example of
a. other controls.
b. independent internal verification.
c. establishment of responsibility.
d. segregation of duties.
Answer:
Bacher Company developed the following reconciling information in preparing its
September bank reconciliation:
Using the above information, determine the cash balance per books (before
adjustments) for the Bacher Company.
a. $2,834
b. $5,480
c. $8,148
d. $8,828
Answer:
If a customer agrees to retain merchandise that is defective because the seller is willing
to reduce the selling price, this transaction is known as a sales
a. discount.
b. return.
c. contra asset.
d. allowance.
Answer:
A post-closing trial balance contains
a. real and nominal accounts.
b. permanent and temporary accounts.
c. balance sheet or permanent accounts.
d. balance sheet and revenue accounts.
Answer:
Which of the following statements is not considered a disadvantage of the corporate
form of organization?
a. Additional taxes
b. Government regulations
c. Limited liability of stockholders
d. Separation of ownership and management
Answer:
Income Summary has a credit balance of $17,000 in S. Sufjan Co. after closing
revenues and expenses. The entry to close Income Summary is
a. credit Income Summary $17,000, debit Retained Earnings $17,000.
b. credit Income Summary $17,000, debit Dividends $17,000.
c. debit Income Summary $17,000, credit Dividends $17,000.
d. debit Income Summary $17,000, credit Retained Earnings $17,000.
Answer:
Teamboo Company’s stockholders’ equity at the beginning of August 2015 was
$750,000. During the month, the company earned net income of $175,000 and paid
dividends of $75,000. At the end of August 2015, what is the amount of stockholders’
equity?
a. $675,000
b. $750,000
c. $825,000
d. $850,000
Answer:
Which of the following practices by a credit card company results in lower interest
charges to the cardholder?
a. The card company states interest as a monthly percentage rather than an annual
percentage.
b. The card company allows a grace period before interest is accrued.
c. The card company allows cardholders to skip payments on their cards.
d. The card company calculates finance charges from the date of purchase to the date
the amount is paid.
Answer:
Each of the following is an example of a significant noncash activity except
a. conversion of bonds into common stock.
b. exchanges of plant assets.
c. issuance of debt to purchase assets.
d. stock dividends.
Answer:
Consolidated financial statements present all of the following except the
a. individual assets and liabilities of the parent company
b. individual assets and liabilities of the subsidiary.
c. total revenues and expenses of the subsidiary.
d. All of these are presented in consolidated financial statements.
Answer:
Ratios are used as tools in financial analysis
a. instead of horizontal and vertical analyses.
b. because they may provide information that is not apparent from inspection of the
individual components of the ratio.
c. because even single ratios by themselves are quite meaningful.
d. because they are prescribed by GAAP.
Answer:
A truck was purchased for $180,000 and it was estimated to have a $36,000 salvage
value at the end of its useful life. Monthly depreciation expense of $3,000 was recorded
using the straight-line method. The annual depreciation rate is
a. 20%.
b. 2%.
c. 8%.
d. 25%.
Answer:
The officer who is generally responsible for maintaining the cash position of the
corporation is the
a. controller.
b. treasurer.
c. cashier.
d. internal auditor.
Answer:
The following transactions took place for Xiu Xiu Company:
(a) Purchased equipment on account for $9,000.
(b) Billed customers $5,000 for services performed.
(c) Made payment of $2,300 on account for equipment purchased earlier in month.
(d) Collected $2,900 on customer accounts.
1> What is the balance in Accounts Payable at June 30, 2015?
2> What is the balance in Accounts Receivable at June 30, 2015?
Answer:
When customers make purchases with a national credit card, the retailer
a. is responsible for maintaining customer accounts.
b. is not involved in the collection process.
c. absorbs any losses from uncollectible accounts.
d. receives cash equal to the full price of the merchandise sold from the credit card
company.
Answer:
At the end of the month, the accountant for Slater Company prepared a schedule of
accounts receivable from the accounts receivable subsidiary ledger. Its total did not
agree with the balance in the Accounts Receivable control account in the general ledger.
Briefly describe the procedure that should be followed in reconciling the two balances.
Answer:
Every adjusting entry affects one balance sheet account and one income statement
account.
Answer:
The book value of a plant asset is the amount originally paid for the asset less
anticipated salvage value.
Answer:
The adjusted trial balance of Rocky Acre Spread Inc. on December 31, 2015 includes
the following accounts: Accumulated Depreciation, $6,000; Depreciation Expense,
$2,000; Notes Payable $7,500; Interest Expense $150; Utilities Expense, $300; Rent
Expense, $500; Service Revenue, $19,600; Salaries and Wages Expense, $6,000;
Supplies, $200; Supplies Expense, $1,200; Salaries and Wages Payable, $600. Prepare
an income statement for the month of December.
Answer:
The post-closing trial balance will contain only retained earnings statement accounts
and balance sheet accounts.
Answer:
Below is a list of important abbreviations widely used in business. For each
abbreviation give the full designation.
1> CPA
2> IRS
3> FBI
4> FASB
5> GAAP
6> SEC
Answer:
Bonds that the issuing company can redeem at a stated dollar amount prior to maturity
are convertible bonds.
Answer:
Consolidated financial statements are prepared in place of the financial statements for
the parent and subsidiary companies.
Answer:
If inventories are valued using the LIFO cost flow assumption, they should not be
classified as a current asset on the balance sheet.
Answer: