Match the following choices to the listed situation.
a.a deferred expense
b.a deferred revenue
c.an accrued liability
d.an accrued asset
Interest earned on notes receivable, but not yet received is recorded
Identify the classifications of the following accounts as either current or long-term
liabilities for the December 31, 2014 balance sheet.
a.Current liability
b.Long-term liability
An amount of money owed to the federal government based on the company’s annual
income.
Select the account that would be increased to show each of the following costs.
a.Land
b.Land Improvements
c.Buildings
d.Machinery and Equipment
e.An Expense Account
The costs paid to clear land.
The treasurer for Rahm Corp. was preparing a bank reconciliation as of September 30,
2014. The following items were identified:
Rahm’s book balance $32,800
Deposits in transit 4,300
Outstanding checks 2,200
Interest earned on checking account 100
Customer’s NSF check returned by the bank 400
Rahm Corp.’s adjusted cash balance at September 30, 2014 is a. $34,600
b. $34,900
c. $32,500
d. $32,800
Loss on sale of patent
a.Balance Sheet – Property, Plant, and Equipment
b.Balance Sheet – Intangible Assets
c.Balance Sheet – Current Assets
d.Balance Sheet – Other Assets
e.Income Statement – Operating Section
f.Income Statement – Other Revenue and Expense Section
g.Statement of Cash Flows
Tara Corp. reported the following information for 2015 and 2016.
How much cash was collected from customers during 2016?
a. $741,000
b. $745,000
c. $749,000
d. $753,000
Use the information below for Fargo Corp. for 2015 and 2016 to answer the following
question.
At the end of 2016, Fargo issued bonds at par value for $800,000 cash. The proceeds
from these bonds were used to retire the $500,000 bond issue outstanding at the end of
2015 (before their maturity date). All interest expense was paid in cash during 2016.
How much did Fargo pay to retire the $500,000 bond issue during 2016?
a. $485,000
b. $500,000
c. $515,000
d. $560,000
Identify where each of the following accounts would be reported on CocaCola’s
financial statements
a.Balance Sheet – Property, Plant, and Equipment
b.Balance Sheet – Intangible Assets
c.Balance Sheet – Current Assets
d.Balance Sheet – Other Assets
e.Income Statement – Operating Section
f.Income Statement – Other Revenue and Expense Section
g.Statement of Cash Flows
Copyright
From the following list, select the proper section from the statement of cash flows in
which it would be classified.
a.Operating Activities
b.Investing Activities
c.Financing Activities
Paid income taxes
Use the selected data from the consolidated statements of cash flows for Vancouver
Corporation for the years ended December 31, 2016 and 2015, to answer the questions
that follow.
REQUIRED:
(A)What method does Vancouver use to calculate the net cash provided by operating
activities?
(B)In 2016, why are depreciation and amortization expenses added back to net income
in the operating activities section of the statement of cash flows?
Given below are several ratios. Select the accounts or amounts that would be used in
order to calculate the ratio. You will have more than one response to each ratio. Some
accounts or amounts may not be used at all. (Select all that apply.)
Return on sales ratio
a.Market price per share
b.Net sales
c.Gross profit
d.Average total assets
e.Interest expense, net of tax
f.Net income
g.Total liabilities
h.Total assets
Use the following codes to indicate how the cash flow effect, if any, of each transaction
or event would be reported on a statement of cash flows if the operating activities
section is prepared using the indirect method.
a.Operating activity-add to net income
b.Operating activity-deduct from net income
c.Inflow from investing activity
d.Outflow from investing activity
e.Inflow from financing activity
f.Outflow from financing activity
g.Noncash investing and financing activity
h.Not reported on statement of cash flows
Paid the cash dividends declared above.
Match each of the following terms pertaining to liabilities to their definitions.
a.Current liability
b.Accounts payable
c.Notes payable
d.Discount on notes payable
e.Current maturities of long-term liabilities
f.Accrued liabilities
g.Contingent liability
h.Estimated liability
Amounts owed that are represented by a formal contractual agreement. These amounts
usually require the payment of interest.
Refer to the data for Benton Corporation.
What is the balance of Accounts Receivable at December 31, 2015?
a. $209,000
b. $225,000
c. $447,000
d. $459,000
Read the information about Parachute Country Club.
Which of the following describes the transaction which occurred on August 7?
a.Sold club memberships on credit.
b.Cash sales of daily fees.
c.Collected an advance deposit in cash.
d.Received cash payments of accounts receivable.
For each item listed, select the section of the balance sheet in which the item would be
reported.
a.Current Assets
b.Property. Plant, and Equipment
c.Current Liabilities
d.Long-term Liabilities
e.Stockholders’ Equity
Computer available for resale
Indicate the type of each ratio listed below.
a.Liquidity ratio
b.Solvency ratio
c.Profitability ratio
Inventory turnover ratio
Several accounts from the financial statements of Robot Technologies are listed below.
In the two columns provided for answers, indicate the type of account and the normal
account balance. Use the following identification codes for your answers:
Type of Account Normal Balance
A = Asset DR = Debit
L = Liability CR = Credit
SE = Stockholders’ Equity
R = Revenue
E = Expense
Type of Account Normal Balance
A) Prepaid Expenses _______ _______
B) Cable Television Equipment _______ _______
C) Subscriptions Received in Advance _______ _______
D) Common Stock _______ _______
E) Accounts Payable _______ _______
F) Income Taxes Expense _______ _______
G) Interest Income _______ _______
H) Cable Television Franchises _______ _______
I) Long-Term Debt _______ _______
There are three elements to the accounting equation: assets, liabilities, and stockholders’
equity. Below are five possible types of transactions. For each of these five types, write
descriptions of a example that would illustrate this type of transaction.
Themethod most nearly approximates replacement cost of inventory on the balance
sheet.
The Stockholders’ Equity section of the balance sheet for Brompton Construction
Company at the end of 2016 is as
follows:
The lower portion of the 2016 income statement indicates the following:
Assume that the number of shares outstanding did not change during the year.
REQUIRED:
1)Compute earnings per share before extraordinary items.
2)Compute earnings per share after the extraordinary loss.
3)Which of the two EPS ratios is more useful to management? Explain your answer.
Would your answer be different if the ratios were to be used by an outsider, like a
potential stockholder? Why or why not?
The bookkeeper for B. Sebastian & Company, Inc. prepared the following journal
entries and posted the entries to the general ledger as indicated in the T accounts
presented. Assume that the dollar amounts and the descriptions of the entries are
correct.
See the journal entries and T accounts for B. Sebastian & Company.
REQUIRED: If you assume that all journal entries have been posted correctly, use the
above information to answer these questions:
(1)Identify the transactions that the bookkeeper recorded incorrectly in the general
journal.
(2)Prepare the journal entry that the bookkeeper should have made for each transaction
that you have identified as being made incorrectly.
(3)For each journal entry recorded incorrectly, indicate the impact of the error on the
accounting equation. For your answer, indicate whether each element of the accounting
equation, Assets, Liabilities, and Stockholders’ Equity, has been “Understated” or
“Overstated” or there has been “No Effect.”
Theis a subset of the board of directors that acts as a direct contact between the
stockholders and the independent accounting firm.