Closing entries are dated in the journal as of
A.the date they are actually journalized, although they are generally prepared after the
end of the accounting period
B.the last day of the accounting period, although they are actually journalized after the
end of the accounting period
C.the first day of the accounting period, although they are actually journalized after the
end of the accounting period
D.the first day of the subsequent accounting period
Answer:
If a company borrows money from a bank as an installment note, the interest portion of
each annual payment will:
A.equal the interest rate on the note times the carrying amount of the note at the
beginning of the period.
B.remain constant over the term of the note.
C.equal the interest rate on the note times the face amount.
D.increase over the term of the note.
Answer:
For Company A and Company B:
Answer:
For the current year ending January 31, Harp Company expects fixed costs of $188,500
and a unit variable cost of $51.50. For the coming year, a new wage contract will
increase the unit variable cost to $55.50. The selling price of $70.00 per unit is expected
to remain the same.
Round your answer to the nearest whole number.
Answer:
.Daja and Whitnee had capital balances of $140,000 and $160,000 respectively at the
beginning of the current fiscal year. The articles of partnership provide for salary
allowances of $25,000 and $35,000 respectively, an allowance of interest at 12% on the
capital balances at the beginning of the year, with the remaining net income divided
equally. Net income for the current year was $120,000.
Answer:
The income summary account is also called
A.the imprest account
B.the clearing account
C.the adjustments account
D.the helpful account
Answer:
Which of the following is not one of the three phases needed when changing an
accounting system, either in its entirety or in part?
A.analysis
B.design
C.review
D.implementation
Answer:
The ability of a corporation to obtain capital is
A.less than a partnership.
B.about the same as a partnership.
C.restricted because of the limited life of the corporation.
D.enhanced because of limited liability and ease of share transferability.
Answer:
Based on the above data, what is the amount of quick assets?
A.$205,000
B.$203,000
C.$131,000
D.$66,000
Answer:
On December 1st, JumpStart Company provides $2,800 in services to clients.
(a) Journalize this event as if the clients had paid cash at the time the services were
rendered.
(b)(1) Journalize this event as if the clients had placed this on account.
(b)(2) Assume that the clients paid $1,200 of the amount on account on December 30th.
Journalize this transaction.
Answer:
A company reports the following:
Determine the (a) rate earned on stockholders’ equity, and (b) rate earned on common
stockholders’ equity. Round your answer to one decimal place.
Answer:
Allowance for Doubtful Accounts is classified as a(n) ______ and has a normal ______
balance.
A.owners’ equity, credit
B.contra-asset, debit
C.owners’ equity, debit
D.contra-asset, credit
Answer:
Below is budgeted production and sales information for Flushing Company for the
month of December:
The unit selling price for product XXX is $5 and for product ZZZ is $15.
Budgeted sales for the month are:
A.$3,180,000
B.$5,820,000
C.$1,800,000
D.$8,500,000
Answer:
The company whose more than 50% stock is owned by the another company is called
the
A.controlling company.
B.investee company.
C.subsidiary company.
D.sibling company.
Answer:
Division A of Mocha Company has sales of $155,000, cost of goods sold of $83,000,
operating expenses of $43,000, and invested assets of $150,000.
What is the rate of return on investment for Division A?
A.19.3%
B.48.0%
C.18.7%
D.5.47%
Answer:
Harold Corporation just started business in January 2012. They had no beginning
inventories. During 2012 they manufactured 12,000 units of product, and sold 10,000
units. The selling price of each unit was $20. Variable manufacturing costs were $4 per
unit, and variable selling and administrative costs were $2 per unit. Fixed
manufacturing costs were $24,000 and fixed selling and administrative costs were
$6,000.
What would be the Harold Corporations Net income for 2012 using variable costing?
A.$114,000
B.$110,000
C.$4,000
D.$106,000
Answer:
An employee receives an hourly rate of $40, with time and a half for all hours worked
in excess of 40 during a week. Payroll data for the current week are as follows: hours
worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to
current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and
Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?
A.$775.00
B.$1,840.00
C.$1,960.00
D.$1,562.60
Answer:
Basic inventory data for April 30 are presented below for a business that employs the
lower of cost or market basis of inventory valuation.
(a)
(b)
$155 ($7,300 – $7,145)
Answer:
All of the following employees hold line positions in Anthea Electric EXCEPT:
A.vice president of production
B.vice president of finance
C.manager of the Valhalla Plant
D.vice president of sales
Answer:
List the accounts used in the cost flow for (a) a manufacturer and (b) a service provider.
Answer:
A characteristic of a fixed asset is that it is
A.intangible
B.used in the operations of a business
C.held for sale in the ordinary course of the business
D.a short-term investment
Answer:
The cost of a product warranty should be included as an expense in the
A.period the cash is collected for a product sold on account
B.future period when the cost of repairing the product is paid
C.period of the sale of the product
D.future period when the product is repaired or replaced
Answer:
The following items are reported on a company’s balance sheet:
Determine the (a) current ratio, and (b) quick ratio. Round your answer to one decimal
place.
Answer:
A machine with a cost of $120,000 has an estimated residual value of $15,000 and an
estimated life of 5 years or 15,000 hours. It is to be depreciated by the
units-of-production method. What is the amount of depreciation for the second full
year, during which the machine was used 5,000 hours?
A.$ 5,000
B.$35,000
C.$21,000
D.$45,000
Answer:
On February 12, Addison, Inc. purchased 6,000 shares of Lucas Company at $22 per
share plus a $240 brokerage fee. On August 22, Lucas paid a $0.42 dividend per share.
On November 10, 4,000 shares of Lucas stock were sold for $28 per share less a $160
brokerage fee. The journal entry to record the purchase would include:
A.a debit to Investments for $132,000
B.a credit to Cash for $132,000
C.a debit to Investments for $132,240
D.a credit to Investments for $240
Answer:
Finch Company began its operations on March 31 of the current year. Finch Co. has the
following projected costs:
(1) 3/4 of the manufacturing costs are paid for in the month they are incurred. 1/4 is
paid in the following month.
(2) Insurance expense is $1,000 a month, however, the insurance is paid four times
yearly in the first month of the quarter, i.e. January, April, July, and October.
(3) Property tax is paid once a year in November.
The cash payments for Finch Company in the month of May are:
A.$185,600
B.$149,900
C.$187,600
D.$189,100
Answer:
Mocha Company manufactures a single product by a continuous process, involving
three production departments. The records indicate that direct materials, direct labor,
and applied factory overhead for Department 1 were $100,000, $125,000, and
$150,000, respectively. The records further indicate that direct materials, direct labor,
and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000,
respectively. In addition, work in process at the beginning of the period for Department
1 totaled $75,000, and work in process at the end of the period totaled $60,000.
The journal entry to record the flow of costs into Department 2 during the period for
direct labor is:
A.Work in Process–Department 265,000
Wages Payable65,000
B.Wages Payable65,000
Work in Process–Department 265,000
C.Work in Process–Department 2125,000
Wages Payable125,000
D.Work in Process–Department 2185,000
Wages Payable185,000
Answer:
During the period, labor costs incurred on account amounted to $275,000 including
$200,000 for production orders and $75,000 for general factory use. In addition, factory
overhead applied to production was $32,000. From the following, select the entry to
record the actual factory overhead costs incurred.
A.Accounts Payable75,000
Factory Overhead75,000
B.Factory Overhead32,000
Accounts Payable32,000
C.Work in Process75,000
Wages Payable 75,000
D.Factory Overhead75,000
Wages Payable75,000
Answer:
Factors contributing to a decline in the usefulness of a fixed asset may be divided into
the following two categories
A.salvage and functional
B.physical and functional
C.residual and salvage
D.functional and residual
Answer:
Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from
a customer on account.
a. Determine the due date of the note.
b. Determine the maturity value of the note.
c. Journalize the entry to record the receipt of the payment of the note at maturity.
Answer:
Tanning Company analyzes its receivables to estimate bad debt expense. The accounts
receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts
receivable shows that approximately 5% of the outstanding receivables will be
uncollectible. What adjusting entry will Tanning Company make if the Allowance for
Doubtful Accounts has a credit balance of $2,500 before adjustment?
A.Bad Debt Expense 17,000
Allowance for Doubtful Accounts 17,000
B.Bad Debt Expense 19,500
Allowance for Doubtful Accounts 19,500
C.Bad Debt Expense 22,000
Allowance for Doubtful Accounts 22,000
D.Bad Debt Expense 65,000
Allowance for Doubtful Accounts 65,000
Answer:
Adriana and Belen are partners who share income in the ratio of 3:2 and have capital
balances of $50,000 and $90,000 at the time they decide to terminate the partnership.
After all noncash assets are sold and all liabilities are paid, there is a cash balance of
$90,000. How much cash should be distributed to Adriana?
A.$50,000
B.$20,000
C.$30,000
D.$45,000
Answer:
Which of the following should be shown on a statement of cash flows under the
financing activity section?
A.the purchase of a long-term investment in the common stock of another company
B.the payment of cash to retire a long-term note
C.the proceeds from the sale of a building
D.the issuance of a long-term note to acquire land
Answer:
On May 1, 2014, Stanton Company purchased $60,000 of Harris Company’s 12%
bonds at 100 plus accrued interest of $2,400. On June 30, 2014, Stanton received its
first semiannual interest. On February 1, 2015, Stanton sold $50,000 of the bonds at
103 plus accrued interest.
The journal entry Stanton will record on February 1, 2015, will include:
A.a credit to Interest Revenue for $1,500.
B.a credit to Gain on Sale of Investments for $1,500.
C.a credit to Cash for $52,500.
D.a credit to Interest Receivable for $600.
Answer: