Journal entries are required if the bank reconciliation includes a book error.
The creation of a corporation begins when its incorporators obtain a charter from the
state.
The major difference between a cash basis accounting system and an accrual basis
accounting system is the timing of recording revenues and assets.
The key difference in the closing process under the periodic inventory system is how
merchandise inventory is handled.
Discarding plant assets involves disposing of the asset for no cash.
A company discovers that its cost of goods sold is understated by an insignificant
amount. It does not need to correct the error because of the materiality concept.
An examination of a company’s financial statements and records is called an audit.
Companies that follow GAAP are required to use the direct write-off method for
uncollectible accounts receivable.
Bad debt expense is not debited when a company writes off an account receivable when
using the allowance method because the company has already recorded the Bad Debt
Expense as an adjusting entry.
An accounting information system has three basic components: source documents and
input devices, processing and storage, and internal controls.
Sinopia Corporation reported trading investments at fair value of $49,000 on December
31, 2016. There is a decrease of $3,800 in the fair value of the trading investments by
the end of the year 2017. Which of the following is the correct journal entry?A)
B)
C)
D)
The field of accounting that focuses on providing information for internal decision
makers is ________.
A) managerial accounting
B) financial accounting
C) nonmonetary accounting
D) governmental accounting
The Gain on Disposal from trading securities is a(n) ________.
A) current asset account
B) fixed asset account
C) liability account
D) equity account
Held-to-maturity investments are normally reported at ________.
A) current market value
B) average cost
C) amortized cost
D) historical cost
On the date of record for a dividend, the company ________.
A) issues new shares of stock on that date
B) disburses dividend payments to stockholders on that date
C) records the dividend payable amount on that date
D) determines who owns the shares of stock on that date
Urban, Inc. provides the following data:Urban, Inc.
Comparative Balance Sheet
Year Ended Dec. 31, 2017
Calculate the debt to equity ratio. (Round your answer to two decimal places.)
A) 0.39
B) 0.05
C) 1.24
D) 0.64
Equipment was acquired for $210,000 and has accumulated depreciation of$93,000.
The business exchanges this equipment for new equipment. The new equipment has a
market value of $304,000 and the business pays $52,000 cash. Assume the exchange
has commercial substance. The exchange results in ________.
A) loss $135,000
B) gain $187,000
C) gain $135,000
D) loss $187,000
Zetom Company receives a bill from one of its suppliers for services received and will
pay the supplier next month. How does the receipt of the bill from the supplier affect
the accounting equation of Zetom?
A) assets and equity decrease
B) liabilities increase and equity decreases
C) assets and liabilities increase
D) liabilities and equity increase
Which of the following statements is true if a bond is issued for an amount equal to its
face value?
A) The bond’s stated interest rate is less than the prevailing market interest rate at time
of sale.
B) The bond’s stated interest rate is the same as the prevailing market interest rate at
time of sale.
C) The bond’s stated interest rate is more than the prevailing market interest rate at time
of sale.
D) The bond is not secured by specific assets of the issuer.
The main computer where data is stored, which can be accessed from many different
computers is known as a(n) ________.
A) internet protocol
B) RAM
C) server
D) router