Weighted average cost per unit is determined by dividing the cost of goods available for
sale by the number of units available.
The Common Stock account is a permanent account.
Income taxes are withheld from the employee’s paycheck.
Unearned revenues are current liabilities until they are earned.
A chart of accounts is a list of all of a company’s accounts with their account numbers.
Federal Unemployment Taxes Payable is typically shown on the balance sheet under the
long-term liabilities section.
A compound journal entry has more than two accounts, but the total dollar value of the
debits still must equal total dollar value of the credits.
Term bonds all mature at the same specified time.
Sales through credit cards or debit cards transfer the risk of collection of receivables
from the seller to the card issuer.
An increase in the current ratio implies that the profitability of the company has
increased from the previous period.
Assuming that costs are changing during the accounting period, under the last-in,
first-out inventory costing method, the amount of cost of goods sold calculated using
the perpetual inventory system will usually differ from the amount calculated using the
periodic. inventory system.
What is the result if the amount of net income for the year is less than the amount of the
Dividends?
A) Retained Earnings increases
B) Cash balance decreases
C) Cash balance increases
D) Retained Earnings decreases
From its inception through the year of 2016, Quicksales, Inc. was profitable and made
strong dividend payments each year. In the year 2017, Quicksales had major losses and
paid no dividends. In 2018, the company started making large profits again, and they
were able to pay dividends to all shareholders-both common and preferred. There are
2,000 shares of cumulative, 10% preferred stock outstanding. The preferred stock has a
par value of $100. What is the total amount of dividends that should be paid to the
preferred stockholders in December, 2018?
A) $60,000
B) $90
C) $20,000
D) $40,000
The entry to record depreciation includes a credit to the ________.
A) Depreciation Payable account
B) Cash account
C) Accumulated Depreciation account
D) Depreciation Expense account
Fingertips, Inc. had the following financial data for the year ended December 31, 2017.
What is the cash ratio as of December 31, 2017, for Fingertips, Inc.? (Round your
answer to two decimals.)
A) 0.30
B) 0.39
C) 0.48
D) 0.81
Accumulated Depreciation is a(n) ________ account and carries a normal ________
balance.
A) revenue; debit
B) expense; debit
C) contra asset; credit
D) liability; credit
The Gain on Disposal of Trading Securities is reported in the ________.
A) other revenues and expenses section of the income statement
B) stockholders’ equity section of the income statement
C) current assets section of the balance sheet
D) fixed assets section of the balance sheet
Which of the following is a major reason why corporate ownership is popular in the
United States?
A) Stockholders have limited liability for the debts of the corporation.
B) Most corporations are small- or medium-sized.
C) The life of a corporation is limited by the death of the owner.
D) A corporation is usually managed by the owners.
The following information is from the December 31, 2017 balance sheet of Jackson
Corporation.
What is the average issue price of the preferred stock shares? (Round answers to the
nearest dollar.)
A) $108
B) $100
C) $167
D) $106
Amounts owed for products or services purchased on account are called ________.
A) accounts payable
B) unearned revenue
C) accrued expense
D) warranty payable
Nuptial, Inc. paid the rent for the current month in cash. Which of the following
accounts will be used to record the transaction?
A) Prepaid Rent
B) Rent Payable
C) Rent Revenue
D) Rent Expense
Based on the partial balance sheet of Marco Investments, Inc., compute the rate of
return on total assets.
A) 9.42%
B) 19.41%
C) 9.71%
D) 1.76%
Murphy Corporation had originally purchased land for $38,000. It later sold it for
$38,000 in cash. Which of the following is true of the effect of the sale of land on the
accounting equation?
A) assets increase and liabilities decrease by $38,000
B) assets and equity increase by $76,000
C) assets increase by $38,000; equity increases by $38,000
D) the amount of total assets remains the same
A company received a bank statement with a balance of $6,200. Reconciling items
included a bookkeeper error of $400-a $400 check recorded as $500-two outstanding
checks totaling $840, a service charge of $24, a deposit in transit of $260, and interest
revenue of $19. What is the adjusted bank balance?
A) $5,563
B) $5,220
C) $5,115
D) $5,620
Which of the following is true of a purchases journal?
A) For a periodic inventory system, the Merchandise Inventory DR column is replaced
with a column titled Cost of Goods Sold DR.
B) Cash purchases are recorded in the purchases journal.
C) For a perpetual inventory system, a column titled Purchases DR is needed.
D) The Other Accounts DR column is used for purchases on account of items other than
merchandise inventory and office supplies.
A customer’s promise to pay in the future for services or goods sold is called a(n)
________.
A) Accounts Receivable
B) Accounts Payable
C) Unearned Revenue
D) Notes Payable