The current ratio is calculated as total current assets divided by total current liabilities.
When a business records an accrued utility liability, the Utilities Expense account is
credited.
The Accumulated Depreciation account is a permanent account.
The cost of land does not include the cost of fencing and paving.
Examples of source documents in an accounting information system include the
statement of cash flows and sales journal.
The use of the allowance method to record bad debts expense violates the matching
principle.
An alternative to calling the bonds is to purchase any available bonds in the open
market at their current market price.
The net income calculated using either the single-step or multi-step income statement
formats is always the same.
If a company fails to make an adjusting entry for deferred expense, the assets will be
overstated. Assume the deferred expense is initially recorded as an asset.
The Depreciation Expense account is a temporary account.
The difference that arises between the balance on the bank statement and the balance on
the company’s books because of a time lag in recording transactions is known as a
timing difference.
When calculating the cash ratio, the numerator includes cash equivalents.
A quarterly report filed with the Securities and Exchange Commission is called a Form
10-K.
Bonds affect the percentage of ownership of a corporation.
Which of the following is used to determine how the sales revenue of a company has
changed from one year to the next?
A) vertical analysis of the balance sheet
B) horizontal analysis of the income statement
C) horizontal analysis of the balance sheet
D) vertical analysis of the income statement
On January 21, 2016, Bessant, Inc. received merchandise from Mullies, Inc. On that
date, it found a few of these goods to be damaged. On January 22, it returned the
damaged goods to the seller. Such returns will be treated as ________ by Bessant.
A) purchase returns
B) sales returns
C) purchase allowances
D) sales allowances
Which of the following will be recorded in the Other Accounts CR column of the cash
receipts journal?
A) cash sales
B) receipt of interest revenue
C) receipt of accounts receivable
D) sales discounts
Which of the following statements is true of the accounting cycle?
A) It takes place only at the end of an accounting period.
B) It involves preparation of adjusting entries after the closing entries.
C) It ignores the beginning balances of accounts.
D) It is a process by which financial statements for a period are produced.
Which of the following inventory valuation methods should be used for unique items?
A) first-in, first-out
B) last-in, first-out
C) weighted-average
D) specific identification
Glasgow, Inc. uses the periodic inventory system. On February 1, the corporation
purchased inventory on account for $14,000. The terms were 4/10, n/30. On February 2,
it returned damaged goods worth $700 to the supplier and was granted an allowance.
Give the journal entry for the payment if the invoice is paid after the discount period.
(Round your answers to the nearest dollar.)A)
B)
C)
D)
Which of the following is true of net sales revenue?
A) It is calculated by subtracting cost of goods sold from sales.
B) It is calculated by adding sales discounts to sales.
C) It is calculated by adding sales discounts and sales returns and allowances to sales.
D) It is calculated by deducting sales discounts and sales returns and allowances from
sales.
Which of the following is an asset account?
A) Cash
B) Notes Payable
C) Dividends
D) Unearned Revenue
The financing activities section of a statement prepared using the direct method
includes changes in ________.
A) Accounts Payable
B) Accounts Receivable
C) Merchandise Inventory
D) Long-term Notes Payable
Qwerty, Inc. prepaid $7,200 on November 1, 2014 for a one-year insurance premium.
On January 1, 2015 of the next year (after December 31 adjustments), the Prepaid
Insurance account will have a debit balance of ________.
A) $6,600
B) $7,800
C) $7,200
D) $6,000
A business makes a payment in cash for advertising expense. Which of the following
accounts is debited?
A) Cash
B) Accounts Payable
C) Accounts Receivable
D) Advertising Expense
On January 1, 2015, the Accounts Receivable of Linda, Inc. had a debit balance of
$180,000. During January, the company provided services for $700,000 on account.
The company collected $230,000 from its customers on account in January. What was
the ending balance in the Accounts Receivable account at the end of January?
A) $470,000
B) $880,000
C) $650,000
D) $700,000
Angela’s gross pay for the week is $970.00. Her deduction for federal income tax is
based on a rate of 20%. She has voluntary deductions of $220.00. Her yearly pay is
under the limit for OASDI. What is the amount of FICA-Medicare Tax deducted from
her pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)
A) $194.00
B) $14.07
C) $60.14
D) $268.21
The par value of stock is ________.
A) the current selling price of stock
B) the highest price for which a share can sell
C) the price paid if the corporation purchases its own stock back
D) the amount assigned by a company to a share of its stock