Both common and preferred stock carry the same degree of investment risk for the
stockholder.
The only time the Petty Cash account is used in a journal entry is when the account is
established, increased, or decreased.
The inventory turnover ratio measures the average number of days that inventory is
held by a company.
A trial balance is the list of only a company’s debit accounts along with their account
numbers at a point in time.
A payroll register is a schedule that summarizes the earnings, withholdings, and net pay
for each employee.
The Sales Discounts account is a contra account to the ________ account.
A) Purchases
B) Sales Revenue
C) Merchandise Inventory
D) Sales Returns and Allowances
Shield Company needs to purchase a property to build their headquarters. An investor is
willing to exchange land worth $700,000 for shares of common stock. On the statement
of cash flows, this transaction would be shown as ________.
A) investing activities
B) non-cash investing and financing activities
C) operating activities
D) financing activities
Which of the following sections of the statement of cash flows includes activities that
increase and decrease long-term liabilities and stockholders’ equity?
A) the financing activities section
B) the operating activities section
C) the investing activities section
D) the non-cash investing and financing section
Which of the following is true of the Discount on Bonds Payable account?
A) It is added to the Bonds Payable balance and shown with long-term liabilities on the
balance sheet.
B) It is subtracted from the Bonds Payable balance and shown with the current
liabilities on the balance sheet.
C) It is added to the Bonds Payable balance and shown with stockholders’ equity on the
balance sheet.
D) It is subtracted from the Bonds Payable balance and shown with long-term liabilities
on the balance sheet.
Reversing entries are ________.
A) the exact opposite of a prior adjusting entry
B) dated the last day of the new period
C) required according to GAAP
D) expensive to record and time consuming
A business has the following transactions:
– The business received $20,000 cash and issued common stock to stockholders.
– The business purchases $500 of office supplies on account.
– The business purchases $4,000 of furniture on account.
– The business renders services to various clients totaling $11,000 on account.
– The business pays out $3,000 for salaries expense and $5,000 for rent expense.
– The business pays $600 to supplier for the office supplies purchased earlier.
– The business collects $1,000 from one of its clients for services rendered earlier in the
month.
At the end of the month, all journal entries are posted to the ledger. Accounts Payable
will appear as which of the following?
A)
B)
C)
D)
Hastings Corporation has purchased a group of assets for $25,000. The assets and their
relative market values are listed below.
Which of the following amounts would be debited to the Land account? (Round any
intermediate calculations to two decimal places, and your final answer to the nearest
dollar.)
A) $4,500
B) $12,500
C) $5,250
D) $7,000
Accounts Payable is a(n) ________ account and has a normal ________ balance.
A) liability; debit
B) asset; debit
C) liability; credit
D) asset; credit
Which of the following items will not appear as deductions on a bank statement?
A) NSF
B) EFT
C) Service Charge
D) Deposits
A business pays cash for dividends. Which of the following accounts is credited?
A) Common Stock
B) Dividends
C) Cash
D) Accounts Payable
A company’s Cash account shows an ending balance of $4,600. Reconciling items
included a bookkeeper error of $105 (a $525 check recorded as $630), two outstanding
checks totaling $830, a service charge of $20, a deposit in transit of $260, and interest
revenue of $33. What is the adjusted book balance?
A) $4,482
B) $4,030
C) $4,718
D) $5,170
To fill in the unadjusted trial balance columns in a worksheet, the account balances
before adjustments are copied directly from the ________.
A) ledger
B) adjusted trial balance
C) chart of accounts
D) balance sheet of previous year
Avatar Auto Parts Company uses the indirect method to prepare the statement of cash
flows. Refer to the following section of the comparative balance sheet:Avatar Company
Comparative Balance Sheet
December 31, 2017 and 2016
How will the change in Accounts Payable be shown on the statement of cash flows?
A) as an addition to Net Income
B) as a deduction from Net Income
C) as a deduction from investing cash flows
D) as an addition to operating cash flows
On April 1, 2017, Ardos Gardening Products borrowed $100,000 on a 15%, 10-year
note with annual installment payments of $10,000 plus interest due on April 1 of each
subsequent year. Prepare the journal entry for the issuance of the note.
On January 16, 2017, Eliot Brothers Oil, Inc. sold $5,000 of merchandise to Bryce, on
account. Eliot Brothers could not collect cash from Bryce and wrote off the account on
December 31, 2017. On November 4, 2018, Bryce unexpectedly paid $5,000.
Journalize the transactions on December 31, 2017 and November 4, 2018. (Eliot
Brothers uses the allowance method.)
Calculate the debt ratio using the following trial balance of Harmony Instruments, Inc.
as of December 31, 2017.
Refer to the following bank reconciliation:Bank Book
Balance, June 30, 2017 $11,240 Balance, June 30, 2017 $10,200
Add: Add:
Deposit in transit 3,110 Note collected by bank 2,100
Interest revenue 55
Less: Less:
Outstanding checks #506 1,200 NSF check 85
Outstanding checks #510 900 Bank service charge 20
________ ________
Adjusted balance, Adjusted balance,
June 30, 2017 $12,250 June 30, 2017 $12,250Journalize the adjusting entry for the
third reconciling item: NSF check.
Provide an explanation for each of the follow asset accounts.
Geary, Inc. provides the following historical data:2016 2015 2014 2013 2012 2011
Net sales $4,970 $4,500 $3,980 $3,270 $4,750 $4,400Prepare the trend analysis report.
Use 2011 as the base year, and round answers to the nearest percent.
The following information is needed to reconcile the cash balance for Jackson Lawn
Services.- A deposit of $5,800 is in transit.
– Outstanding checks total $1,500.
– The book balance is $6,800 at February 28, 2017.
– The bookkeeper recorded a $1,740 check as $17,400 in payment of the current
month’s rent.
– The bank balance at February 28, 2017 was $18,000.
– A deposit of $400 was credited by the bank for $4,000.
– A customer’s check for $3,700 was returned for nonsufficient funds.
– The bank service charge is $60.Based on this information, prepare a bank
reconciliation for Jackson Lawn Services as of February 28, 2017.
