The Petty Cash account is debited when:
A) the account is being replenished.
B) the account balance is being decreased.
C) the account balance is being increased.
D) the account is closed.
Casey issued bonds for $20,000 at 12% face value on July 1. 12% interest payments are
due January 1 and July 1. What is the adjusting entry on December 31?
A)
B)
C)
D)
Organization costs are:
A) part of the company’s start-up and are listed as expenses.
B) listed as an intangible asset on the balance sheet.
C) a current asset on the balance sheet.
D) a liability on the balance sheet.
Which of the following is a real account?
A) Cash
B) Fees Earned
C) Utilities Expense
D) Withdrawals
The journal entry to record the purchase of inventory under the perpetual system
includes:
A) a debit to Cost of Goods Sold and a credit to Merchandise Inventory.
B) a debit to Merchandise Inventory; credit to Accounts Payable or Cash.
C) a debit to Accounts Receivable or Cash and a credit to Sales.
D) Both A and C are correct.
An example of electronic funds transfer is:
A) a transfer of funds without the use of paper checks.
B) a transfer of funds by writing a check.
C) the same as a deposit in transit.
D) All of these are correct.
A statement of cash flow’s purpose is to:
A) report the earnings of the company for an accounting period.
B) report the financial condition of the company.
C) report the changes in equity for a company.
D) summarize the sources and uses of cash by a company during an accounting period.
The entry to close the expense account(s) was entered in reverseIncome Summary was
credited and the expense account(s) was/were debited. The result of this error is that:
A) before closing it, Income Summary will have a credit balance.
B) before closing it, Income Summary will have a debit balance.
C) the assets will be understated.
D) the liabilities will be understated.
Given a 360-day year, the interest expense on a $10,000, 6%, 90-day promissory note
payable is:
A) $150.
B) $1500
C) $510.
D) some other amount.
Which of the following accounts is a contra-cost account?
A) Accumulated Depreciation
B) Purchases Returns and Allowances
C) Sales Returns and Allowances
D) Depreciation Expense
In calculating interest on a note, it is NOT necessary to take which of the following into
consideration?
A) The interest
B) The principal
C) The payee
D) The length of the note
Legal services were provided to a credit customer. How would this affect the
accounting equation?
A) Cash and Accounts Receivable increase.
B) Accounts Payable decreased and Capital decreased.
C) Accounts Receivable and Revenue increase.
D) None of the above is correct.
If Accounts Payable has been debited, it is most likely that:
A) a payment was made on account.
B) a purchase was made on account.
C) a charge customer made a payment.
D) an expense was paid with cash.
What are the annual dividends on preferred stock, $15 par, 500 authorized, 300 shares
issued, and a dividend rate of 12%?
A) $540
B) $600
C) $300
D) $150
Company policy for internal control should include all of the following except:
A) Employees will be rotated twice a year.
B) Monthly bank statements should be sent to and reconciled by the same employees
who authorize payments and write checks.
C) The owner (or responsible employee) signs all checks after receiving authorization
to pay from the departments concerned.
D) At time of payment, all supporting invoices or documents will be stamped “paid.”
A debit to an asset account was posted as a debit to an expense account. This error
would cause:
A) liabilities to be overstated.
B) expenses to be overstated.
C) assets to be understated.
D) Both B and C are correct.
Which type of account would NOT be reported on the income statement?
A) Revenue
B) Expenses
C) Liabilities
D) None of these answers is correct.
Which of the following is an example of an intangible asset?
A) Land
B) Goodwill
C) Inventory
D) Accounts Receivable
Total manufacturing costs incurred include:
A) direct labor costs.
B) raw materials costs.
C) manufacturing overhead.
D) All of the above
Net purchases are:
A) Purchases + Purchases Returns and Allowances.
B) Purchases – Purchases Discount – Purchases Returns and Allowances.
C) Purchases – Freight – Purchases Returns and Allowances.
D) Purchases + Freight-in + freight-out.
In what category in a classified balance sheet is Accounts Receivable found?
A) Plant and Equipment
B) Current Liabilities
C) Current Assets
D) Owner’s Equity
Candyland completed the manufacturing process. The entry to transfer the product to
finished goods is:
A)
B)
C)
D)
The balance of Supplies has decreased during the year. How would this event affect the
statement of cash flows operations sectionindirect method?
A) It is already included in the net income.
B) It would affect the operations section positively.
C) It would affect the operations section negatively.
D) Does not affect the cash flow from operations.
The entry to record the approval of a withdrawal by the owner will include:
A) a debit to Wages Expense and a credit to Vouchers Payable.
B) a debit to Vouchers Payable and a credit to Wages Expense.
C) a debit to Withdrawals and a credit to Vouchers Payable.
D) a debit to Vouchers Payable and a credit to Withdrawals.
Go Blue Retail Store collected $10,000 of its accounts receivable. The expanded
accounting equation changes include:
A) Cash and Capital increase, $10,000.
B) Cash and Revenue increase $10,000.
C) Cash increases and Accounts Receivable decreases $10,000.
D) Accounts Receivable decreases and Capital increases $10,000.
If treasury stock is re-issued at a price less than its cost, the debit entry could include:
A) Paid-in Capital from Treasury Stock.
B) Retained Earnings.
C) Treasury Stock.
D) Both A and B
The freight paid on goods purchased F.O.B. shipping point was debited to the Freight
Expense account. The goods are not sold at period end. The company uses the perpetual
inventory method. This error would cause:
A) the period end assets to be understated.
B) the period end liabilities to be understated.
C) the period’s net income to be overstated.
D) None of these is correct.
Which of the following would NOT be included in the net cash flows from operating
activities section of a cash flow statement using the indirect method?
A) Decrease in Accounts Payable
B) Increase in Inventory
C) Decrease in Accounts Receivable.
D) Increase in Notes Payable.
When a partner withdraws, the partnership may have an audit to adjust the assets to
their:
A) historic cost.
B) depreciated value.
C) fair market value.
D) book value.
A characteristic of the account, Sales Discount, includes the following except for:
A) debit balance.
B) contra-revenue account.
C) records the cash discounts granted to customers.
D) contra-asset.