The advance cash receipts of future revenues are called ________.
A) accrued revenues
B) deferred expenses
C) deferred revenues
D) accrued expenses
Days’ sales in receivables measures ________.
A) how many days it takes to order and receive inventory
B) how many days it takes to collect the average level of accounts receivable
C) how many days it takes to sell inventory
D) the number of times a company collects the average accounts receivable balance in
one year
A subsidiary ledger is ________.
A) an accounting journal designed to record a specific type of transaction
B) a created list of accounts used by a business entity to define each class of items for
which cash is spent or received
C) a complete record of business transactions recorded in a ledger over the life of a
company
D) a record of accounts that provide supporting details on individual balances, the total
of which appears in a general ledger account
On January 1, 2017, Anodel, Inc. acquired a machine for $1,010,000. The estimated
useful life of the asset is five years. Residual value at the end of five years is estimated
to be $62,000. Calculate the depreciation expense per year using the straight-line
method.
A) $202,000
B) $189,600
C) $251,600
D) $252,500
Which of the following is an objective of internal control?
A) to encourage employees to follow company policies
B) to ensure timely payment of accounts payable
C) to ensure timely collection of accounts receivable
D) to guarantee that a business makes a profit
The controller at Horizon, Inc. needs new computers for the accounting department.
However, there are no guidelines specifying whether the controller can approve
purchases of office equipment.In the above situation, which internal control procedure
needs strengthening?
A) assignment of responsibilities
B) competent, reliable, and ethical personnel
C) separation of duties
D) documents
The time period concept states that ________.
A) financial statements can be prepared for specific periods
B) all expenses should be recorded when they are incurred during the period
C) companies should record revenue when it has been earned
D) expenses incurred during a period should be matched against the revenues of the
period
Prinkle Corporation purchased equipment for $60,000 on January 1, 2016. On
December 31, 2018, the equipment was sold for $28,000. Accumulated Depreciation as
of December 31, 2018 was $31,000.
Calculate gain or loss on the sale.
A) $1,000 gain
B) $1,000 loss
C) $31,000 loss
D) no gain no loss
On April 1, a hardware retailer purchases inventory on account for $1,500. Which of the
following correctly describes the effect of this transaction? Assume a perpetual
inventory system is used.
A) Merchandise Inventory decreases by $1,500 and Accounts Receivable decreases by
$1,500.
B) Merchandise Inventory decreases by $1,500 and Accounts Receivable increases by
$1,500.
C) Merchandise Inventory increases by $1,500 and Accounts Payable decreases by
$1,500.
D) Merchandise Inventory increases by $1,500 and Accounts Payable increases by
$1,500.
On December 1, 2017, Summit, Inc. sold machinery to a customer for $24,000. The
customer could not pay at the time of sale but agreed to pay 11 months later and signed
a 11-month note at 11% interest. How much interest revenue was earned during 2018?
(Round your answer to the nearest dollar.)
A) $1,320
B) $2,640
C) $2,420
D) $2,200
Which of the following inventory costing methods results in the lowest value of ending
inventory during a period of rising inventory costs?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
Which of the following statements is true of the Common Stock account?
A) It is an equity account that has a normal credit balance.
B) It is a liability account that has a normal credit balance.
C) It is a liability account that has a normal debit balance.
D) It is an equity account that has a normal debit balance.