Your Best Advisors, a service company, uses reversing entries. On March 31, 2016,
they journalized and posted the following adjusting entry to accrue Utilities Expense:
Which of the following entries is the correct reversing entry to be prepared on April 1,
2016?A)
B)
C)
D)
Which of the following accounts has a balance equal to net income immediately before
it is closed?
A) Income Summary
B) Dividends
C) Net Income
D) Retained Earnings
Maywood, Inc. has a current ratio of 6.00. This indicates that the company has $6 in
________.
A) current liabilities for every $1 of current assets
B) total assets for every $1 of current liabilities
C) current assets for every $1 of current liabilities
D) total assets for every $1 of current assets
Hawkeye Corporation has acquired a property that included both land and a building for
$570,000. The corporation hired an appraiser who has determined that the market value
of the land is $300,000 and that of the building is $430,000. At what amount should the
corporation record the cost of land? (Round any intermediate calculations to two
decimal places, and your final answer to the nearest dollar.)
A) $444,600
B) $123,000
C) $285,000
D) $233,700
Brown, Inc. owed one of its creditors $350,000, but it did not have enough cash to
repay the debt. Following lengthy negotiations, the parties agreed that Brown, Inc.
would issue 50,000 shares of common stock to settle the debt. On the statement of cash
flows, this transaction is shown in the ________.
A) investing activities section
B) financing activities section
C) operating activities section
D) non-cash investing and financing activities section
Cash received in advance of providing goods or performing services is recorded as
________.
A) Unearned Revenue
B) Accrued Revenue
C) Service Revenue
D) Uncollected Revenue
On October 1, 2017, Android, Inc. made a loan to one of its customers. The customer
signed a 4-month note for $150,000 at 11%. How much interest revenue did the
company record in the year 2017? (Round your answer to the nearest dollar.)
A) $1,650
B) $1,375
C) $5,500
D) $4,125
Which of the following is not recorded in a modern perpetual inventory system?
A) units purchased and cost amount
B) units sold and sales and cost amounts
C) customer account numbers and balances owed from the sale of merchandise
inventory
D) the quantity of merchandise inventory on hand and its cost
The ultimate control of the corporation rests with the ________.
A) board of directors
B) stockholders
C) chairperson
D) chief operating officer
Which is a true statement regarding the accounting equation?
A) The equation can be stated as assets minus liabilities equals equity.
B) The equation consists of three parts: assets, liabilities, and net income.
C) The equation is an optional tool for accountants to use.
D) The equation does not need to balance during a specific period.
Dana Appliances sells dishwashers with a four-year warranty. In 2017, sales revenue for
dishwashers is $97,000. The company estimates warranty expense at 4.5% of revenues.
What is the 2017 warranty expense?
A) $4,365
B) $1,091.25
C) $0
D) $3,423.53
What does “2/10” mean, with respect to “credit terms of 2/10, n/30”?
A) A discount of 2 percent will be allowed if the invoice is paid within 10 days of the
invoice date.
B) Interest of 2 percent will be charged if the invoice is paid after 10 days from the date
on the invoice.
C) A discount of 10 percent will be allowed if the invoice is paid within two days of the
invoice date.
D) Interest of 10 percent will be charged if invoice is paid after two days.
A business pays $500 cash for office supplies. Which of the following accounts is
debited?
A) Cash
B) Accounts Payable
C) Office Supplies
D) Utilities Expense
Which of the following statements, regarding notes receivable, is incorrect?
A) Notes receivable usually have longer terms than accounts receivable.
B) A notes receivable is a written promise that a customer will pay a fixed amount of
principal plus interest by a certain date in the future.
C) All notes receivable are considered long-term assets.
D) Notes receivable are sometimes called promissory notes.
Which of the following is provided in a typical chart of accounts?
A) Account balance
B) Account number
C) Dates of transactions
D) Transaction amounts