In reviewing the T-account for Accounts Receivable, you find that the beginning
balance is zero, the total increases are $5,400 and the total decreases are $2,100. This
means that the ending balance of the account is a credit balance of $3,300.
Members of a limited-liability company (LLC) are not personally liable for the debts of
the business.
Long-term liabilities can be structured with equal principal payments or with an equal
total payment amount.
The owner of a bond or stock of a corporation is referred to as the investor.
Dividends receivable, interest receivable, and taxes receivable are generally categorized
as other receivables.
After posting entries in a sales journal to the general ledger, the Accounts Receivable
balance in the general ledger should equal the sum of the individual customer balances
in the accounts receivable subsidiary ledger.
In a computerized environment, the posting process is completed automatically when
the user enters the journal entry.
Argyle Designs, Inc. has entered into a contract to design 40 new dresses for a
customer. It will collect a total of $40,000 after the design services are complete. Argyle
started design work on June 1. As of June 30, it finished 8 of the 40 designs. The
company will make an adjusting entry at the end of June to accrue $10,000 of service
revenue.
The steps of the accounting cycle are followed throughout the accounting period.
An information system is one of the five components by which a company can achieve
its internal control objectives.
A patent is an exclusive right to reproduce and sell a book, musical composition, film,
other work of art, or intellectual property.
Hardware is electronic equipment that includes computers, monitors, printers, and the
network that connects them.
The formula for calculating the cash ratio is calculated is ________.
A) (Cash) / Total liabilities
B) (Cash + Cash equivalents) / Total current liabilities
C) (Cash + Cash equivalents) / Total assets
D) (Cash equivalents) / Total current liabilities
A business collects cash from a customer for services that were performed one month
earlier. Which of the following accounts is debited?
A) Cash
B) Accounts Receivable
C) Service Revenue
D) Accounts Payable
Russin Tax Planning Service bought computer equipment for $22,000 on January 1,
2016. It has an estimated useful life of four years and zero residual value. Russin uses
the straight-line method to calculate depreciation and records depreciation expense in
the books at the end of every month. Calculate the amount of Depreciation Expense for
the period, January 1, 2016 through September 30, 2016, for this equipment. (Round
any intermediate calculations to two decimal places, and your final answer to the
nearest dollar.)
A) $5,500
B) $4,125
C) $5,958
D) $4,583
A cash payments journal is a special journal that ________.
A) differs from the cash disbursements journal
B) eliminates the need to perform a bank reconciliation
C) is used to record cash payments by check and currency
D) is used to record the net of cash payments and cash receipts by check and currency
Which of the following statements accurately describes the statement of cash flows?
A) It shows the relative proportion of debt and assets.
B) It is the link between the accrual-based income statement and the cash reported on
the balance sheet.
C) It indicates when long-term debt will mature.
D) It is the link between net income and earnings per share.
A business renders services for $26,000 and collects cash from the customer. Which of
the following accounts will be debited?
A) Cash
B) Accounts Receivable
C) Service Revenue
D) Accounts Payable
When using the allowance method, the write-off of a receivable ________.
A) involves a contra-revenue account
B) reduces the amount of the Allowance for Bad Debts account
C) decreases net income
D) affects the net realizable value
Which of the following is true of freight in?
A) It is an administrative expense.
B) It is a selling expense.
C) It is the transportation cost on purchases.
D) It is the transportation cost on sales.
Caterpillars, Inc., a manufacturing company, acquired equipment on January 1, 2014 for
$600,000. Estimated useful life of the equipment was seven years and the estimated
residual value was $18,000. On January 1, 2017, after using the equipment for three
years, the total estimated useful life has been revised to nine total years. Residual value
remains unchanged. The company uses the straight-line method of depreciation.
Calculate depreciation expense for 2017. (Round any intermediate calculations to two
decimal places, and your final answer to the nearest dollar.)
A) $57,143
B) $55,429
C) $66,667
D) $64,667
Entry-level accounting software ________.
A) can handle advanced processes and transactions
B) is an affordable system that is difficult to use
C) allows businesses to enter sales of services and merchandise inventory, record
expenses, and produce financial statements
D) integrates all of a company’s functions, departments, and data into a single system
A company that uses the perpetual inventory system purchased inventory for $900,000
on account with terms of 4/7, n/20. Which of the following correctly records the
payment made 15 days after the date of invoice?A)
B)
C)
D)
What is the maturity value of a 3-month, 14% note for $50,000? (Round your answer to
the nearest dollar.)
A) $52,000
B) $57,000
C) $51,750
D) $50,000