Refer to A2Z Events. What are the effects on the accounting equation when the
company writes off a bad debt under the allowance method?
A2Z Events
The following data are from the company’s records for 2013:
a. Assets decrease and stockholders’ equity increase
b. Assets and stockholders’ equity decrease
c. Assets increase and stockholders’ equity decreases
d. No effect on overall assets or stockholders’ equity
Paid the cash dividends.
Use the following codes to indicate how the cash flow effect, if any, of each transaction
would be reported on a statement of cash flows if the operating activities section is
prepared using the direct method. (Choices may be used more than once.)
a. Inflow from operating activity
b. Outflow from operating activity
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
Which of the following is an intangible asset?
a. oil
b. goodwill
c. retained Earnings
d. accounts Receivable
Refer to Kaleidoscope Paint. The interest expense on the bonds at June 30, 2013, is
Kaleidoscope Paint
On January 1, 2013, this company issued $500,000, 10-year, 9% bonds for $480,745.
The bonds pay interest on June 30 and December 31. The market rate is 10%. The
company plans to use the effective interest method of amortizing bond discounts and
premiums. a. $22,500.
b. $24,037.
c. $21,634.
d. $43,267.
Which one of the following items is a classification on the Classified Balance Sheet?
a. operating accounts
b. stockholders’ equity
c. revenues and expenses
d. net income and dividends
Refer to Designs on You. What is the unadjusted cash balance according to the
company’s records May 31st?
Designs on You The following information relates to the company’s May bank
reconciliation:
In addition, a check was recorded in the accounting records as $1,200 but the correct
amount as recorded by the bank was only $1,000. a. $5,365
b. $5,500
c. $5,000
d. $4,865
A manufacturing company purchased equipment on January 1, 2004 for $450,000. As
of January 1, 2013, depreciation of $202,500 had been recorded on this asset.
Depreciation expense for 2013 is $22,500. After the adjustments are recorded and
posted at December 31, 2013, what are the balances for the Equipment and
Accumulated Depreciation? EquipmentAccumulated Depreciation
a. $450,000 $0
b. $450,000 $225,000
c. $225,000 $22,500
d. $225,000 $225,000
Represent future economic benefit to the company but they lack physical substance
Match these terms with their correct definition.
a. Franchise e. Organizational costs
b. Intangible operating assets f. Property, plant, and equipment
c. Natural resources g. Trademark
d. Operating assets h. Voluntary disposal
Refer to Randstad, Inc. Earnings per share for 2015 would be reported as
Randstad, Inc.
Information from the financial statements is provided below:
a. $1.08.
b. $1.20.
c. $1.29.
d. $1.43.
On January 1, 2011, P Company purchased all of the outstanding common stock of S
Company. The consolidation of the two balance sheets requires a
a. credit adjustment to eliminate P Company’s “Investment in S Company’ account.
b. debit adjustment to eliminate S Company’s “Investment in P Company’ account
c. debit adjustment to eliminate P Company’s “Investment in S Company’ account
d. credit adjustment to eliminate S Company’s “Investment in P Company’ account
Which of the following is a constraint to the qualitative characteristics of useful
accounting information?
a. conservatism
b. materiality
c. relevance
d. comparability
Which of the following accounts is increased by a debit entry?
a. common stock
b. equipment
c. notes payable
d. service revenue
A list of all the accounts maintained by the business.
Match the following terms with their correct definition.
a. Account f. Debit
b. Accounting cycle g. Event
c. Chart of accounts h. General ledger
d. Cost vs. benefit i. Journal
e. Credit j. Trial balance
When determining the future value of an annuity, cash flows are presumed to occur
a. at the start of the first period.
b. at the end of the first period.
c. when the interest is received.
d. at the maturity date.
A company reported the following information in its 2014 annual report:
What is the cash flow adequacy ratio for 2014?
a. 6.96
b. 5.90
c. 3.70
d. 0.74
The clerk in the accounting department records both purchases and payments of
invoices. The following set of items describes activities completed by a company in
purchasing and paying for merchandise and in collecting cash for merchandise sales.
For each activity, identify whether or not the activity adheres to or violates sound
internal control procedures. (Choices may be used more than once.)
a. Adheres to sound internal controls
b. Violates sound internal controls
c. Neither strengthens nor violates internal control
Date on which the Board of Directors votes to pay a dividend.
Refer to Maritime Marine Services. What was the cost of investments purchased
during 2014?
Maritime Marine Services
Selected data from the financial statements for the years ended December 31, 2014 and
2013, are presented below:
The following additional information was obtained from the company’s records:
Ownership in a corporation is represented by shares of common or preferred stock
called ____________________ securities.
If Accounts Receivable decreased during the year, then cash collections must have been
____________________ than sales on account for the period.
Refer to Mary Kay Cosmetics. How would the transaction to acquire a building by
signing a 20-year mortgage note payable be reported on the statement of cash flows for
2014?
Mary Kay Cosmetics
Selected data and additional information from the company’s records are presented
below:
Additional information:
The ____________________ is the private sector group with authority to set
accounting standards in the United States.
What is meant by the term “cash equivalents”?
Obligations that extend beyond one year are referred to as ____________________.
____________________ are journal entries made at the end of the accounting period to
return the balance in all temporary accounts to zero.