Archives: Quiz

Use the following Assets section of Hu Corporation’s balance sheets for the years ended December 31, 2015 and 2014 to answer the questions that follow. Refer to the information for Hu Corporation. Calculate the following ratios for Hu for 2015. […]

If a company purchases $3,000 worth of inventory with terms of 1/15, n30 and pays within 15 days, then the amount paid to the seller would be a. $3,030 b. $2,550 c. $2,970 d. $3,000 For each of the following […]

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment. a.Add to inventory cost b.Subtract from inventory cost c.Not an inventory cost Cost of insurance during transit to acquire inventory items […]

The value assigned to an asset such as inventory on the balance sheet determines the amount eventually recognized as an expense on the income statement. a.True b.False Match the terms with the descriptions related to merchandise sales and purchases. a.Transportation-in […]

Match the following bond and long-term liability related terms to the appropriate definition. a.Long-term liability b.Face value c.Debenture bonds d.Serial bonds e.Callable bonds f.Face rate of interest g.Market rate of interest h.Bond issue price i.Premium j.Discount k.Effective interest method of […]

The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. If Garrett has $5,000 per year to invest for 10 years and wants to […]

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method: a.Operating b.Investing c.Financing d.Not separately reported on a statement of cash flows […]

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. a.Current Assets (balance sheet) b.Property, Plant, & Equipment (balance sheet) […]

Debit and credit would best be described asterms. a.abnormal b.increasing/decreasing c.quantitative d.locational The following unadjusted amounts were taken from Ruben Gifts’ accounting records at December 31, 2015: A)Determine the effects on the accounting equation of any adjusting entries necessary for […]

The statement of cash flows reflects the revenues actually earned by the business, regardless of whether cash has been collected. a.True b.False In 2015, Morton Co.sold 150 hot air balloons at $4,000 each. The balloons carry a 5-year warranty for […]

Match the term with the statement that best defines it. a.Accounting controls b.Accounting system c.Administrative controls d.Audit committee e.Board of directors Consists of all methods and records used to accurately report an entity’s transactions. The revenue recognition principle involves two […]

Identify the classifications of the following accounts as either current or long-term liabilities for the December 31, 2014 balance sheet. a.Current liability b.Long-term liability When borrowing money to be repaid in regular future payments, the payment is based on the […]

For each of the following items, indicate whether it would appear on a statement of cash flows prepared using the Direct method (a) or the Indirect method (b). a.Direct b.Indirect Gain on early retirement of bonds For the following items […]

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. a.Inflow from operating activity […]

Expired costs are called assets. a.True b.False See the transactions to Morton & Associates. The journal entry to record the May 9 transaction will include an increase of $1,220 to a.Accounts Receivable b.Cash c.Accounts Payable d.Administrative Expenses Answer: c Given […]

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. a.Included b.Excluded Petty cash Read the information about Parachute Country Club. […]

The following information was taken from the operating activity section of the 2014 statement of cash flows for Limited Corp: Based on the information provided, which one of the following conclusions is correct? a.Accounts payable decreased $2,000 in 2014. b.Inventories […]

Cash equivalents are investments that are readily convertible to a known amount of cash, where readily means six months or less. a.True b.False Not all recognizable events are supported by a standard source document. a.True b.False Answer: True The data […]

Ashley Wilson’s grandparents want to give her some money when she graduates from high school. They have offered Ashley the following three choices: a.Receive $25,000 immediately. Assume that interest is compounded annually. b.Receive $3,200 at the end of each six […]

Presented below is the operating activities section of the statement of cash flows for Feline Friends Corp. for 2016: Operating activities: Which method of preparing the operating activities section has Feline used? a.The direct method b.The indirect method c.Either method […]

It is not possible for Cash to decrease from Yr. 1 to Yr. 2 if income rises over this period. a.True b.False An invoice received from a supplier for $8,000 on January 1 with terms 1/15, n/30 means that the […]

For each of the following accounts, indicate whether it is a balance sheet account or an income statement account. a.Balance sheet account b.Income statement account Income Taxes Payable Several accounts from the financial statements of Madison Company are listed below. […]

Match the following choices to the listed situation. a.a deferred expense b.a deferred revenue c.an accrued liability d.an accrued asset Interest earned on notes receivable, but not yet received is recorded Identify the classifications of the following accounts as either […]

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment. a.Add to inventory cost b.Subtract from inventory cost c.Not an inventory cost Freight costs incurred by the seller to ship goods […]

Income statements for Maltese Corp. for the past two years are as follows: (amounts in thousands of dollars) REQUIRED: 1)Prepare common-size comparative income statements for the two years for Maltese Corp. 2) What observations can you make about the common-size […]

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2015. The amounts below are related to the equipment purchase. Match the items below and explain why each revenue expenditure is not capitalized. a.This item […]

Utah Corp. Use the following selected data and additional information from the records of Utah Corp. to answer the questions that follow. Additional information: (1)Equipment with a cost of $15,000 and a book value of $3,000 was sold for $5,000 […]

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. a.Debit b.Credit Bonds Payable The data presented below is for Mellon Corporation for the year […]

A change in estimate of an asset’s residual value involves restating the income statements of past periods for the estimate change. a.True b.False Shidan Apartments purchased an apartment building to rent to university students on November 18, 2015. The following […]

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. a.Operating activity-add […]

Beatrice Equipment sells merchandise only on credit. For the year ended December 31, 2014, the following data is available: Refer to the data for Beatrice Equipment. Assume that Beatrice Equipment estimates bad debts at 1% of net credit sales. A)What […]

The accountant for Darden Corp. was preparing a bank reconciliation as of April 30, 2014. The following items were identified: In addition, Darden made an error in recording a customer’s check; the amount was recorded in cash receipts as $150; […]

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. a.Debit b.Credit Wages and Salaries Payable If current assets amount to $150, total assets $350, […]

For each ratio listed, select whether an increase or decrease in the ratio is generally considered to be better. a.increase b.decrease Asset turnover ratio Most experts now agree that there has been a tendency to rely far too heavily on […]

Select the account that would be increased to show each of the following costs. a.Land b.Land Improvements c.Buildings d.Machinery and Equipment e.An Expense Account The transportation charges related to the acquisition costs of a new piece of machinery. Which of […]

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. a.Operating activity-add […]

TB Figure 10.11 is the annotated systems flowchart for the order entry/sales process. TB Figure 10.12 is the related control matrix. Following the control matrix is a description of the first control plan, P-1. Required: Using the format shown for […]

The ____________ _________________ units of large and small public accounting firms have accounted for a significant percentage of the firms’ business and were growing faster than the accounting, auditing, and tax portions of their businesses. Bubbles are labelled with verbs […]

According to the 2011 PricewaterhouseCoopers (PwC) Global Economic Crime Survey: a. Internal audit is the most effective fraud detection method. b. Cybercrime ranks as one of the top four economic crimes worldwide. c. Accounting fraud has increased significantly over the […]

Vendor online catalogs can be viewed by customers through a(n): a. Browser b. Compiler c. Intranet d. none of the above List 1 shows the coding schemes discussed and illustrated in Chapter 5, while List 2 contains eight coding examples. […]

Which data flow diagram (DFD) symbol is portrayed by two parallel lines? a. data flow b. data store c. external entity d. internal entity or process The following is a jumbled list of the activities suggested in this text for […]

The correct sequence of events for entering a customer order is a. edit order, record sales order, update inventory, notify warehouse b. record sales order, edit order, update inventory, notify warehouse c. notify warehouse, edit order, record sales order, update […]

A policy: a. is a plan or process put in place to guide actions and achieve goals. b. can compel behavior and enforce penalties for failure to follow. c. can be used to prevent fraud in an organization. d. all […]

Figure TB-4.1 is a “generic” level 0 data flow diagram (DFD), taken from Figure 4.5 in the text. Required: Using good data flow diagram construction techniques draw a diagram to explode bubble 3.0 to its next lower level. Diagram 3.0 […]

When should inventory be purchased? Discuss three specific physical controls to mitigate the risk of inaccurate record keeping. Answer: transaction authorization – AP authorizes cash disbursements to make payment accounting records – audit trail documents, journals, accounts and files independent […]

Use the internal control procedures listed below to complete the statements. A clerk reorders 250 items when the inventory falls below 25 items. This is an example of ————————–. Use the internal control procedures listed below to complete the statements. […]

Explain industry and competency analysis. Foreign keys physically connect logically related tables to achieve the associates described in the data model. Answer: T The most common audit types are ____________________, ____________________, and ____________________ auditors. Answer: internal (operational), external (attestation), fraud […]

Define fault tolerance. The general ledger function receives the AP account summary from cash disbursements. Answer: F What are the four characteristics of a properly designed database table? Answer: 1) The value of at least one attribute in each tuple […]

What are some of the risks of placing the decision of what, when and where to buy solely at the discretion of the purchasing agent? Name and explain the purpose of the three major subsystems of the AIS: Answer: Discuss […]

Explain how Take Order can be either an economic or a support event. Discuss common risks to consumers from cyber criminals that impact electronic commerce. Answer: The perception that the Internet is not safe for credit card purchases is considered […]