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Cobb Company's accounting records show the following at the year ending on
December 31, 2015:
Using the periodic system, the cost of goods sold is
a. $378,000.
b. $383,000.
c. $393,600.
d. $404,200.
Answer:
Deerhoof Company purchases equipment for $2,700 and supplies for $400 from
Milkman Co. for $3,100 cash. The entry for this transaction will include a
a. debit to Equipment $2,700 and a debit to Supplies Expense $400 for Milkman.
b. credit to Cash for Milkman.
c. credit to Accounts Payable for Deerhoof.
d. debit to Equipment $2,700 and a debit to Supplies $400 for Deerhoof.
Answer:
Which one of the following affects cash during a period?
a. Recording depreciation expense
b. Declaration of a cash dividend
c. Write-off of an uncollectible account receivable
d. Payment of an accounts payable
Answer:
The journal entry to record the payroll for a period will include a credit to Salaries and
Wages Payable for the gross
a. amount less all payroll deductions.
b. amount of all paychecks issued.
c. pay less taxes payable.
d. pay less voluntary deductions.
Answer:
The bank statement that a depositor receives from the bank includes
a. notification of amounts deducted by the bank to cover such things as the cost of a
supply of new checks ordered by the depositor.
b. a designation of which checks are still outstanding at the end of the month.
c. a designation of which deposits are in transit at the end of the month.
d. notification of errors made by the depositor in recording checks written during the
month in the depositor's accounts.
Answer:
A reasonable amount of uncollectible accounts is evidence
a. that the credit policy is too strict.
b. that the credit policy is too lenient.
c. of a sound credit policy.
d. of poor judgments on the part of the credit manager.
Answer:
Accounting for treasury stock is done by the
a. FIFO method.
b. LIFO method.
c. cost method.
d. lower of cost or market method.
Answer:
Inventory turnover is calculated by dividing
a. cost of goods sold by the ending inventory.
b. cost of goods sold by the beginning inventory.
c. cost of goods sold by the average inventory.
d. average inventory by cost of goods sold.
Answer:
A credit sale of $4,000 is made on April 25, terms 2/10, n/30, on which a return of $250
is granted on April 28. What amount is received as payment in full on May 4?
a. $3,675
b. $3,750
c. $3,920
d $4,000
Answer:
Match the internal control principle below with the appropriate cash disbursements
procedure described.
a. Establishment of responsibility
b. Segregation of duties
c. Documentation procedures
d. Physical controls
e. Independent internal verification
f. Human resource controls
_____ 1> Compare checks to invoices.
_____ 2> Different individuals approve and make payments.
_____ 3> Print check amounts by machine with indelible ink.
_____ 4> Only designated personnel are authorized to sign checks.
_____ 5> Each check must have approved invoice.
_____ 6> Requiring employees to take vacations.
Answer:
Sales taxes collected by a retailer are recorded by
a. crediting Sales Taxes Revenue.
b. debiting Sales Tax Expense.
c. crediting Sales Taxes Payable.
d. debiting Sales Taxes Payable.
Answer:
[a) What is the term used to describe the owner's equity section of a corporation? [b)
Identify the two owners' equity accounts in a corporation and indicate the purpose of
each.
Answer:
When preparing a consolidated income statement,
a. only the revenues and expenses of the parent company are presented.
b. the income from partially owned subsidiaries is excluded.
c. all revenue and expense transactions between the parent and subsidiaries must be
eliminated.
d. intercompany transactions between affiliated companies do not have to be
eliminated.
Answer:
Which of the following is not a special journal?
a. Sales journal
b. Purchases journal
c. General journal
d. Cash receipts journal
Answer:
On November 2, 2014, Kasdan Company has cash sales of $6,000 from merchandise
having a cost of $3,600. The entries to record the day's cash sales will include:
a. a $3,600 credit to Cost of Goods Sold.
b. a $6,000 credit to Cash.
c. a $3,600 credit to Inventory.
d a $6,000 debit to Accounts Receivable.
Answer:
The primary accounting standard-setting body in the United States is the
a. Financial Accounting Standards Board.
b. International Accounting Standards Board.
c. Internal Revenue Service.
d. Securities and Exchange Commission.
Answer:
Common Stock Dividends Distributable is classified as a(n)
a. asset account.
b. stockholders' equity account.
c. expense account.
d. liability account.
Answer:
Liabilities are generally classified on a balance sheet as
a. small liabilities and large liabilities.
b. present liabilities and future liabilities.
c. tangible liabilities and intangible liabilities.
d. current liabilities and long-term liabilities.
Answer:
Corporations invest excess cash for short periods of time in each of the following
except
a. equity securities.
b. highly liquid securities.
c. low-risk securities.
d. government securities.
Answer:
Which of the following is an incorrect statement about a corporation?
a. A corporation is an entity separate and distinct from its owners.
b. Creditors ordinarily have recourse only to corporate assets in satisfaction of their
claims.
c. A corporation may be formed in writing, orally, or implied.
d. A corporation is subject to numerous state and federal regulations.
Answer:
On December 1, the accounts receivable control account balance in the general ledger
of Mitus Company was $9,000. The accounts receivable subsidiary ledger contained the
following detailed customer balances: Acme $1,500, Baker $2,100, Fare $2,600, and
Grote $2,800. The following information is available from the company's special
journals for the month of December:
Cash Receipts Journal: Cash received from Fare $1,900, from Acme $1,600, from
Santos $1,700, and from Baker $1,800.
Sales Journal: Sales to Santos $2,300, to Fare $1,700, to Acme $2,300, and to Grote
$2,400.
Additionally, Fare returned defective merchandise for credit for $900. Acme returned
defective merchandise for $600 which he had purchased for cash.
Instructions
(a) Using T-accounts for Accounts Receivable Control and the detail customer accounts,
post the activity for the month of December.
(b) Reconcile the accounts receivable control account with the subsidiary ledger by
preparing a detail list of customer balances at December 31.
Answer:
This information is for Downing Company for the year ended December 31, 2015.
Instructions
Prepare the 2015 statement of cash flows for Downing Company.
Answer:
Daniel Corporation acquired 100% of the common stock of Tysen Company for
$1,100,000. On the date of acquisition, Tysen Company's stockholders' equity consisted
of: Common Stock, $530,000; Retained Earnings, $410,000. The intercompany
elimination to be made on a worksheet to prepare a consolidated balance sheet is
Answer:
Journalize the following transactions for Xiu Xiu Company for June 2015, the
company's first month of operations. You may omit explanations for the transactions.
1> Purchased equipment on account for $9,000.
2> Billed customers $5,000 for services performed.
3> Made payment of $2,300 on account for equipment purchased earlier in month.
4> Collected $2,900 on customer accounts.
Answer:
The cost of paving, fencing, and lighting a new company parking lot is charged to a
______________ account.
Answer:
Compute the asset turnover based on the following:
Answer:
Scruffy Brothers Supply uses a periodic inventory system. During May, the following
transactions and events occurred.
Instructions
Journalize the May transactions for Scruffy Brothers. You may omit explanations.
Answer:
The journal provides a chronological record of transactions.
Answer:
Natural resources include standing timber and underground deposits of oil, gas, and
minerals.
Answer:
The use of a worksheet to prepare a statement of cash flows is optional.
Answer:
