Which one of the following procedures is incorrect for setting up and maintaining a
petty cash fund?
a. A check is prepared for a fixed amount; when the check is cashed, the money is
entrusted to a petty cash custodian.
b. An entry is recorded to establish the fund and obtain the cash.
c. When appropriate documentation is presented, cash payments are made from the
fund; the petty cash custodian retains the documentation.
d. When the petty cash fund is replenished, an entry is recorded to recognize an increase
in the petty cash account.
When a company has a credit balance in its Deferred Tax account, this amount would
appear as a(n)
a. contra asset on the balance sheet.
b. stockholders’ equity account on the balance sheet.
c. expense account on the income statement.
d. liability account on the balance sheet.
Which of the following would appear on a multiple-step income statement but not on a
single-step income statement?
a. Net income
b. Total expenses
c. Total revenues
d. Income before income taxes
Carlton Industries has identified the following items and would like you to answer a
few questions about their effect on Stockholders’ Equity. (Items are used only once.)
a. Preferred stock issued by Carlton
b. Amount received by Carlton in excess of par value when preferred stock was issued
c. Dividends in arrears on Carlton preferred stock
d. Cash dividend declared but unpaid on Carlton stock
e. Stock dividend declared but unissued by Carlton
f. Treasury stock
g. Amount received in excess of cost when treasury stock is reissued by MJ
h. Retained earnings
Which item would not be recorded until declared?
Use the incomplete stockholders’ equity section of Box Company’s balance sheet as of
December 31, 2015, to answer the following question. Common stock, $7 par, 100,000
shares authorized $ 700,000
Additional paidÂin capital-common 160,000
Retained earnings ?
Treasury stock (2,000 shares at cost) (16,000)
Total stockholders’ equity 974,000
How many shares of common stock are outstanding? a. 100,000b. 98,000c. 78,000d.
68,000
Parachute Country Club Use the selected accounts for Parachute Country Club
presented below to answer the following question(s).
Read the information on Parachute Country Club. On which date did the company
make cash sales for daily golf and swimming fees?
a. August 2
b. August 3
c. August 5
d. August 7
Wei Company reported the following items on its financial statements for the year
ending December 31, 2015:
The income statement for Wei will report net income for the current year in the amount
of
a. $ 45,000
b. $ 65,000
c. $ 85,000
d. $ 465,000
Each of the following documents is used in the control of cash disbursements except:
a. Purchase requisitions
b. Purchase orders
c. Receiving reports
d. Cash register tapes
The comparative financial statements for the years ended December 31, 2014 and 2013
for Sophia Company reported the following information.
Answer these questions concerning Sophia Company’s receivables: A) What is the
grossamountof accounts receivable for Sophia at December 31, 2014? Why is this
amount different than the amount of receivables shown in the 2014 column of the
balance sheet? B) What is the netrealizablevalueof accounts receivable for Sophia at
December 31, 2014? What does this amount represent?
A solvency measure that focuses specifically on the extent to which a company relies
on outsiders for funds is:
a. cash flow from operations to capital expenditures ratio
b. debt service coverage ratio
c. times interest earned ratio
d. debt-to-equity ratio
The purchase of office equipment at a cost of $2,600 with an immediate down payment
of $1,200 and agreement to pay the balance within 60 days is recorded by:
a. A debit of $2,600 to Office Equipment, a debit of $1,200 to Accounts Receivable, and
a credit of $1,400 to Accounts Payable.
b. A debit of $1,400 to Accounts Receivable, a debit of $1,200 to Cash, and a credit of
$2,600 to Office Equipment.
c. A debit of $2,600 to Office Equipment, a credit of $1,200 to Cash, and a credit of
$1,400 to Accounts Payable.
d. A debit of $2,600 to Office Equipment, a credit of $1,200 to Cash, and a credit of
$1,400 to Accounts Receivable.
If the lease term is 75% or more of the property’s economic life, the lease agreement
should be accounted for as an operating lease.
a. True
b. False
Select where the following accounts would be reported on CocaÂCola’s financial
statements. (Select all that apply.)
Depreciation expense a. Balance Sheet-Property, Plant, and Equipment
b. Balance Sheet-Intangible Assets
c. Balance Sheet-Current Assets
d. Balance Sheet-Other Assets
e. Income Statement-Operating Section
f. Income Statement-Other Revenue and Expense Section
g. Statement of Cash Flows