Depending on the maturity date, held-to-maturity investments are categorized as current
assets or long-term assets on the balance sheet.
The beginning balance in the Retained Earnings account of a company was $11,000.
The revenues and expenses were $220,000 and $170,000, respectively. During the year,
the company paid dividends of $4,000. The ending balance in Retained Earnings was
$61,000.
External auditors evaluate company controls to ensure the financial statements are
presented fairly, in accordance with Generally Accepted Accounting Principles.
When a business collects cash, the Cash account is debited.
A creditor who has loaned money to a business has a claim to some of the assets of the
business until the debt is paid.
The double-declining-balance method is an accelerated method of depreciation.
In the weighted-average inventory costing method, when using the periodic inventory
system, a single weighted average cost per using is computed for the entire period.
Declaring and paying dividends causes an increase in both assets and stockholders’
equity of the corporation.
A high times-interest-earned ratio indicates difficulty in paying interest expense.
Assets are something of value that the business owns or has control of.
An organization’s receivables can be categorized into accounts receivable, notes
receivable, and other receivables.
Which one of the following account groups normally has a debit balance?
A) assets and expenses
B) revenues and expenses
C) liabilities and revenues
D) assets and liabilities
Mayflower, Inc. provided the following for 2017:
Calculate the average merchandise inventory held by Thomas, Inc. during the year.
A) $930,000
B) $465,000
C) $300,000
D) $630,000
Which of the following is an example of a storage device in an accounting information
system?
A) monitor
B) network
C) printer
D) server
A business pays cash for dividends. Which of the following accounts is debited?
A) Cash
B) Dividends
C) Accounts Payable
D) Common Stock
Rodriguez, Inc. had the following balances and transactions during 2017, from January
1 to December 31:
What would be reported for Ending Merchandise Inventory on the balance sheet at
December 31, 2017 if the perpetual inventory system and the weighted-average
inventory costing method are used? (Round unit costs to two decimal places and total
costs to nearest dollar.)
A) $24,480
B) $12,000
C) $24,000
D) $36,000
Homeward Supply Services received $1,000 cash from a customer; the amount was
owed to the business from the previous month. Which of the following accounts will
decrease as a result of this transaction?
A) Cash
B) Revenue
C) Accounts Payable
D) Accounts Receivable
The expected cash value of an asset at the end of its useful life is known as ________.
A) book value
B) residual value
C) carrying value
D) market value
The balances of select accounts of Sandra, Inc. as of December 31, 2016 are given
below:
The insurance has been prepaid until June 30, 2017. Determine the amount of total
current assets reported on the balance sheet.
A) $15,300
B) $9,100
C) $11,850
D) $9,550
Barn Owl, Inc. reported the following data:
The horizontal analysis shows that the amount of total liabilities has ________.
A) increased by $23,200
B) increased by $2,300
C) decreased by $2,300
D) increased by $24,300
Which of the following is included in the cost of a plant asset?
A) amounts paid to make the asset ready for its intended use
B) regular repair and maintenance costs
C) replacement of damaged parts of the asset
D) wages of workers who work use the asset in normal operations
Which of the following should be included in the cost of land?
A) cost to build sidewalks on the land
B) cost to clear the land of old buildings
C) cost of installing signage
D) cost of installing fences
Reliable Waterworks Corporation provides plumbing services. Transactions of Reliable
Waterworks during the first year of operations are given below.
a) Received $11,000 cash and issued common stock to Sharon.
b) Paid $2,000 for equipment to be used for plumbing repairs.
c) Borrowed $10,000 from a local bank and deposited the money in the checking
account.
d) Paid $300 in rent for the year.
e) Paid $200 for plumbing supplies to be used on various jobs next year.
f) Completed a plumbing repair for a law firm and received $3,000.
Calculate the amount of total assets at the end of the first year. Assume the plumbing
supplies of $3,000 are left at the end of the year.
A) $2,200
B) $2,000
C) $21,000
D) $23,700
Under the direct write-off method, which of the following is included in the entry to
write off an uncollectible account?
A) a credit to the Allowance for Bad Debts
B) a credit to the customer’s Account Receivable
C) a debit to Allowance for Uncollectible Accounts
D) No entry is made to write off uncollectible accounts.
Shelcal, Inc. provides the following data for the year 2017:
The cost of goods sold as a percentage of net sales revenue is ________. (Round your
answer to two decimal places.)
A) 62.63%
B) 62.76%
C) 62.20%
D) 62.47%
Which of the following accounts would be used under the accrual basis of accounting,
but not under cash basis accounting?
A) Cash
B) Unearned Revenue
C) Service Revenue
D) Salaries Expense
Revenue that has been earned but not yet collected in cash is called a(n) ________.
A) accrued revenue
B) deferred expense
C) deferred revenue
D) accrued expense
An income statement includes ________.
A) Land and Salaries Payable
B) Common Stock, Retained Earnings, and Dividends
C) Furniture and Cash
D) Service Revenue and Utilities Expense
The interest rate that investors demand to earn for loaning their money is known as the
________.
A) yield to maturity
B) coupon rate
C) differential rate
D) market interest rate