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Goodwill is not recognized in accounting unless it is acquired from purchasing another
business enterprise.
Answer:
Personnel who handle cash receipts should have the option of taking a vacation or not.
Answer:
Garth Company sold goods on account to Kyle Enterprises with terms of 2/10, n/30.
The goods had a cost of $600 and a selling price of $1,100. Both Garth and Kyle use a
perpetual inventory system. Record the sale on the books of Garth and the purchase on
the books of Kyle.
Answer:
Identify the impact on the balance sheet if the following information is not used to
adjust the accounts.
1> Supplies consumed totaled $3,000.
2> Interest accrues on notes payable at the rate of $200 per month.
3> Insurance of $450 expired during the month.
4> Plant and equipment are depreciated at the rate of $1,200 per month.
Answer:
Inventoriable costs are allocated to ______________ and cost of goods ____________.
Answer:
Cash registers are an important internal control device used in controlling
over-the-counter receipts.
Answer:
The bookkeeper for Antony Johnson Auto Repair made a number of errors in
journalizing
and posting, as described below.
1> A credit posting of $500 to Accounts Receivable was omitted.
2> A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense.
3> A collection from a customer of $100 in payment of its account owed was
journalized and
posted as a debit to Cash $100 and a credit to Service Revenue $100.
4> A credit posting of $350 to Interest Payable was made twice.
5> A cash purchase of supplies for $250 was journalized and posted as a debit to
Supplies $25
and a credit to Cash $25.
6> A debit of $685 to Advertising Expense was posted as $658.
Instructions
For each error:
(a) Indicate whether the trial balance will balance.
(b) If the trial balance will not balance, indicate the amount of the difference.
(c) Indicate the trial balance column that will have the larger total.
Consider each error separately. Use the following form, in which error (1) is given as an
example.
Answer:
Flower Company is considering an investment which will return a lump sum of
$2,500,000 six years from now. What amount should Flower Company pay for this
investment to earn an 11% return?
Answer:
Inventories are reported in the current assets section of the balance sheet immediately
below receivables.
Answer:
