Money earns income over time, a fact called the time value of money.
Debits in the journal are always posted as debits in the ledger.
All items on the book side of the bank reconciliation require journal entries.
The lower-of-cost-or-market rule demonstrates accounting conservatism in action.
Under the periodic inventory system, purchases, purchase discounts, and purchase
returns and allowances are recorded in the Merchandise Inventory account as and when
they occur.
When stock is issued for assets other than cash, the transaction is always recorded at the
market value of the stock issued.
If the historical cost of inventory is less than its current replacement cost, the business
must write down the inventory cost.
The issuance of a note is recorded, on the books of the borrower, by crediting Cash and
debiting Notes Receivable.
Mary Williams contributed $50,000 cash to BCD Corporation in exchange for stock. As
a result of this transaction, assets and revenues will increase.
The horizontal analysis of the balance sheet shows the changes in net sales and net
income.
Liabilities are economic resources that are expected to benefit the business in the future.
The worksheet is a useful step in preparing adjusting entries and the unadjusted trial
balance.
The left side of the accounting equation measures the amount that the business owes to
creditors and to the stockholders.
Planned investments and cash dividends are deducted from ________ to arrive at free
cash flow.
A) net cash provided by operating activities
B) net cash provided by investing activities
C) net cash provided by financing activities
D) net income
A subsidiary company is a company that ________.
A) is controlled by another corporation
B) owns a controlling interest in another company
C) is the first to begin operations in an industry
D) has a trading investment in another company
Which of the following will be listed in the operating section of the statement of cash
flows that is prepared using the indirect method?
A) collections from customers
B) payments to suppliers
C) interest received
D) increases/decreases in current liabilities
DeLito Tax Planning Service bought production equipment for $10,200 on January 1,
2017. It has an estimated useful life of five years and zero residual value. DeLito uses
the straight-line method to calculate depreciation and records depreciation expense in
the books at the end of every month. As of June 30, 2017, the book value of this
equipment shown on its balance sheet will be ________.
A) $9,180
B) $10,200
C) $11,220
D) $10,370
The accounting process of transferring a transaction from the journal to the ledger is
called ________.
A) journalizing
B) posting
C) compounding
D) sourcing
Timothy’s gross pay for this month is $8,950. His gross year-to-date pay, prior to this
month, totaled $112,000. What is the amount of FICA tax withheld from Timothy’s pay
for this month? (Assume an OASDI rate of 6.2%, applicable on the first $117,000
earnings, and a Medicare rate of 1.45%, applicable on all earnings.)
A) $310.00
B) $129.78
C) $439.78
D) $554.90
A business that accepts payments by credit and debit cards ________.
A) is usually unable to attract more customers
B) must check each customer’s credit rating
C) generally receives proceeds from credit and debit card transactions 30 – 45 days after
the sale
D) almost always pays a fee to the seller to cover the processing costs
What is the term used for the difference between the Equipment account and the
Accumulated Depreciation account?
A) contra asset
B) market value
C) historical cost
D) book value
Maple Corp. had net sales of $201,550 for the year ended December 31, 2017. Its
beginning and ending total assets were $88,200 and $112,500, respectively. Determine
Maple’s asset turnover ratio for the year ended December 31, 2017.
A) 0.5 times
B) 2.29 times
C) 1.11 times
D) 2.01 times
A company purchased 400 units for $30 each on January 31. It purchased 95 units for
$40 each on February 28. It sold 150 units for $55 each from March 1 through
December 31. If the company uses the last-in, first-out inventory costing method, what
is the amount of Cost of Goods Sold on the income statement for the year ending
December 31? (Assume that the company uses a perpetual inventory system.)
A) $5,450
B) $3,800
C) $12,000
D) $15,800
Green Apron, Inc. had the following transactions in 2017, its first year of operations:-
Issued 33,000 shares of common stock. Stock has par value of $1.00 per share and was
issued at $24.00 per share.
– Earned net income of $73,000.
– Paid no dividends.At the end of 2017, what is the total amount of paid-in capital?
A) $33,000
B) $865,000
C) $792,000
D) $73,000
The balances of select accounts of McCarthy, Inc. as of December 31, 2016 are given
below:
The Unearned Revenue is the amount of cash received for services to be rendered in
January 2017. Interest Payable will be paid on February 5, 2017. What are the total
long-term liabilities shown on the balance sheet?
A) $1,500
B) $6,000
C) $5,100
D) $25,000
Mosher, Inc. had the following balances and transactions during 2017:
What would be reported for Ending Merchandise Inventory on the balance sheet at
December 31, 2017 if the perpetual inventory system and the first-in, first-out inventory
costing method are used?
A) $5,740
B) $17,000
C) $5,100
D) $8,200
Which of the following is an asset account?
A) Salaries Expense
B) Accounts Payable
C) Service Revenue
D) Prepaid Expense