When determining the date of maturity of a note, omit the date the note was issued.
A reduction in the amount of cash received from a customer for early payment is known
as a sales discount.
Medicare is a required column in a payroll register.
The fact that invested cash earns interest over time is called the time value of money.
The number of times a company collects the average accounts receivable balance in a
year is known as the accounts receivable turnover ratio.
At the beginning of the year, the total stockholders’ equity of Alpha Technologies, Inc.
was $80,000. The revenues and expenses were $70,000 and $40,000, respectively. The
company did not declare dividends. No common stock was issued during the year. The
total stockholders’ equity at the end of the year will amount to $100,000.
Separating the custody of assets from accounting implies that the accountants must not
handle cash and the cashier must not have access to the accounting records.
Companies are now spending less amounts of cash to ensure that their data and
information are secure.
In the closing process, the Dividends account is closed to the Retained Earnings
account.
The process of transferring data from the ledger to the journal is called posting.
The useful life of a plant asset is the length of the service period expected from the
asset.
Unearned revenue is a liability account.
An intangible asset is an asset with no physical form that is valuable because of the
special rights it carries.
The term “inventory,” for a merchandiser, refers to ________.
A) raw materials that are used for production
B) equipment that are used in production process
C) the cost of goods sold
D) goods held for sale to customers
The general ledger shows a balance of $66,400 in the Merchandise Inventory account at
the end of the period. The physical inventory count shows inventory of $63,000. The
adjusting entry includes a ________.
A) debit to Cost of Goods Sold and a credit to Merchandise Inventory for $3,400
B) debit to Cost of Goods Sold and a credit to Cash for $3,400
C) debit to Merchandise Inventory and a credit to Cost of Goods Sold for $3,400
D) debit to Merchandise Inventory and a credit to Cash for $3,400
The Accounts Payable account of Golden, Inc. has the following postings:
Calculate the ending balance of the account.
A) $12,000 credit
B) $18,000 debit
C) $18,000 credit
D) $5,000 debit
Expenses that fall outside the regular operations of a business are ________.
A) not shown in the income statement of a merchandiser
B) treated as current assets and are shown as merchandise inventory
C) included under the other revenues and expenses section of the income statement
D) not considered for the calculation of net income
Which of the following transactions would be shown in the non-cash investing and
financing activities section of the statement of cash flows?
A) sold equipment with book value of $6,500 in exchange for $6,500 cash
B) settled a long-term note payable by issuing common stock
C) issued 20,000 shares of stock at $4 per share
D) purchased land for $30,000 cash
The following information is from the records of Armadillo Camera Shop:
The company uses the direct write-off method for bad debts. What is the amount of bad
debts expense?
A) $81,000
B) $45,000
C) $66,000
D) $16,000
An adjusted trial balance is given below.
What will be the final balance in the corporation’s Retained Earnings account after
recording the closing entries?
A) $30,300
B) $32,300
C) $17,500
D) $1,800
The bank made an EFT payment of a telephone bill of $5,000. How would this
information be included on the bank reconciliation?
A) an addition on the bank side
B) a deduction on the book side
C) an addition on the book side
D) a deduction on the bank side
On December 31, 2017, Lopez Sales has a Bonds Payable balance of $72,000 and a
Premium on Bonds Payable balance of $4,000. On the balance sheet, how will this
information be shown?
A) $72,000 less premium of $4,000 for a net balance of $68,000
B) $72,000 less one-tenth of $4,000 for a net balance of $71,600
C) $72,000
D) $72,000 plus a premium of $4,000 for a net balance of $76,000
Jewel Tone Paints Company uses the direct method for preparing its statement of cash
flow. Jewel Tone reports the following information regarding 2017:From the income
statement:
Sales Revenues, $267,000
Cost of Goods Sold, $213,000
Operating Expenses, $33,000From the balance sheet:
What amount will be shown for payments to suppliers for Merchandise Inventory
purchases? (Assume that Accounts Payable are for purchases of merchandise inventory
only.)
A) $207,300
B) $213,900
C) $200,700
D) $212,100
