A control account ________.
A) does not appear on the balance sheet
B) has a balance that equals the sum of the balances in a group of related accounts in a
subsidiary ledger
C) is equivalent to a contra account and represents the offsetting nature of debits and
credits on a firm’s financial statements
D) holds individual accounts that support a general ledger account
Which of the following would be considered the weakest current ratio?
A) 0.75
B) 0.80
C) 1.25
D) 2.20
Exposition, Inc. had 400 units of inventory on hand at the end of the year. These were
recorded at a cost of $18 each using the last-in, first-out (LIFO) method. The current
replacement cost is $15 per unit. The selling price charged by Exposition, Inc. for each
finished product is $26. As a result of recording the adjusting entry as per the
lower-of-cost-or-market rule, the gross profit will ________.
A) increase by $6,000
B) decrease by $6,000
C) increase by $1,200
D) decrease by $1,200
Emerald, Inc., earned revenues of $69,000 and incurred expenses of $74,000. No
dividends were declared. Which of the following statements is correct?
A) The entry to close Income Summary is the same regardless of a net income or a net
loss.
B) Retained Earnings will be debited for $5,000 and Income Summary will be credited
for $5,000.
C) The entries to close revenues and expenses will differ if there is a net loss.
D) The entry to close Income Summary requires a debit to the Income Summary
account.
Buffalo, Inc. reported sales revenue for 2017 of $903,000. The products were sold with
a nine-month warranty. Members of Buffalo’s management estimate that the cost of the
warranty will be equal to 7% of sales revenue. Which of the following will be included
in the entry to record the actual amounts paid out as a result of warranty claims?
A) a debit to Estimated Warranty Payable for the actual amount of payments
B) a credit to Estimated Warranty Payable for $63,210
C) a debit to Estimated Warranty Payable for $63,210
D) a debit to Warranty Expense for the actual amount of payments
Marsh Supply Services paid $350 cash to a materials supplier, the amount owed from
the previous month. Which of the following accounts decreases?
A) Accounts Receivable
B) Accounts Payable
C) Retained Earnings
D) Office Supplies
Crossword, Inc. uses the direct method to prepare its statement of cash flows. Refer to
the following financial statement information for the year ended December 31,
2017:Crossword, Inc.
Comparative Balance Sheet
December 31, 2017 and 2016
Crossword, Inc.
Comparative Balance Sheet
December 31, 2017 and 2016
Use the direct method to compute the payments to suppliers for Merchandise Inventory
and other operating expenses. (Accrued Liabilities relate to other operating expense.)
A) $197,000
B) $177,500
C) $19,500
D) $201,000
Greg’s Grocery, Inc. has 45,000 shares of common stock outstanding and 8,000 shares
of preferred stock outstanding. The common stock is $0.10 par value; the preferred
stock is 7% noncumulative with a $100.00 par value. On October 15, 2017, the
company declares a total dividend payment of $51,000. What is the amount of dividend
that will be paid for each share of common stock? (Round your answer to the nearest
cent.)
A) $(0.11)
B) $4,500.00
C) $45.00
D) $0.88
Which of the following inventory costing methods uses the cost of the oldest purchases
to calculate the cost of goods sold?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
Bingo Corporation has acquired a property that included both land and a building for
$500,000. The corporation hired an appraiser who has determined that the market value
of the land is $360,000 and that of the building is $420,000. At what amount should the
corporation record the cost of the building? (Round any intermediate calculations to
two decimal places, and your final answer to the nearest dollar.)
A) $226,800
B) $270,000
C) $250,000
D) $320,000
A business borrows cash by signing a note payable. Which of the following accounts is
debited?
A) Notes Payable
B) Accounts Payable
C) Notes Receivable
D) Cash