marius b

This move surround him around alot of good players.

5. The Accumulated Depreciation's account balance is the sum of

depreciation expense recorded in past periods.

T/F

21. Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies:

a. that are in the ending balance

b. purchased

c. used

d. either used or remaining

22. Which of the following accounts will be closed to the retained earnings account at the end of the fiscal year?

a. Rent Expense

b. Fees Earned

c. Income Summary

d. Depreciation Expense

26. At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

a. Total assets will be understated at the end of the current year.

b. The balance sheet and income statement will be misstated but the retained earnings statement will be correct for the current year.

c. Net income will be overstated for the current year.

d. Total liabilities and total assets will be understated.

30. Which of the following accounts ordinarily appears in the post-closing trial balance?

a. Dividends

b. Supplies Expense

c. Fees Earned

d. Unearned Rent

31.The type of account and normal balance of Unearned Rent is:

a. revenue, credit

b. expense, debit

c. liability, credit

d. liability, debit

35. Balance sheet accounts:

a. represent amounts accumulated during a specific period of time

b. are called real accounts

c. have zero balances after the closing entries have been posted

d. are equal to assets and liabilities

41. The net income reported on the income statement is $90,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,700 and accrued salaries of $1,300. Net income, as corrected, is:

a. $87,300

b. $90,000

c. $88,700

d. $86,000

26. An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a

a. debit to Allowance for Doubtful Accounts for $2,800.

b. debit to Bad Debts Expense for $2,800.

c. debit to Allowance for Doubtful Accounts for $4,000.

d. credit to Allowance for Doubtful for $4,000.

30. A 90-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

a. $10,000

b. $10,300

c. $450

d. $9,550

1. As inventory is sold in many retail businesses, the largest expense

is created.

T/F

2. The ending merchandise inventory for 2007 is the same as the

beginning merchandise inventory for 2008.

T/F

3. The buyer will include the sales tax as part of the cost of

merchandise purchased.

T/F

4. In a multi-step income statement the dollar amount for income from

operations is always the same as net income.

T/F

5. In many retail businesses, inventory is the largest current asset.

T/F

6. A business using the perpetual inventory system, with its detailed

subsidiary records, does not need to take a physical inventory.

T/F

7. If the perpetual inventory system is used and a physical count

disclosed a shortage, the cost of merchandise sold should be

debited and the merchandise inventory account credited.

T/F

8. The use of the lower-of-cost-or-market method of inventory valuation

increases net income for the period in which the inventory

replacement price declined.

T/F

9. During inflationary periods, the use of the FIFO method of costing

inventory will yield an inventory amount for the balance sheet

approximating the current replacement cost.

T/F

10. Average inventory is computed by adding the inventory at the

beginning of the period to the inventory at the end of the period and

dividing by two.

T/F

11. One negative effect of carrying too much inventory is risk that

customers will change their buying habits.

T/F

12. Other income and expenses are items that are not related to the

primary operating activity.

T/F

13. If ending inventory for the year is understated, net income for the

year is overstated.

T/F

14. Transportation-in is considered a cost of purchasing inventory.

T/F

15. The selection of an inventory costing method has no significant

impact on the financial statements.

T/F

23. A current liability is a debt that can reasonably be expected to be

paid

a. between 6 months and 18 months.

b. out of currently recognized revenues.

c. within one year.

d. out of cash currently on hand.

24. Gray County Bank agrees to lend the Starkwood Building Company $100,000 on January 1. Starkwood Building Company signs a $100,000, 9%, 9-month note. The entry made by Starkwood Building Company on January 1 to record the proceeds and issuance of the note is

a. Interest Expense 9,000

Cash 91,000

Notes Payable 100,000

b. Cash 100,000

Notes Payable 100,000

c. Cash 100,000

Interest Expense 9,000

Notes Payable 109,000

d. Cash 100,000

Interest Expense 9,000

Notes Payable 109,000

Interest Payable 4,500

25. The journal entry to record the conversion of an $250 accounts payable to a notes payable would be:

a. Jan 31 Cash 250

Notes Payable 250

b. Jan 31 Notes Receivable 250

Notes Payable 250

c. Jan 31 Notes Payable 250

Cash 250

d. Jan 31 Accounts Payable 250

Notes Payable 250

26. The current portion of long-term debt should

a. be classified as a long-term liability.

b. not be separated from the long-term portion of debt.

c. be paid immediately.

d. be reclassified as a current liability.

27. The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

a. payroll expense

b. contra account

c. asset

d. liability

28. Which of the following taxes would be deducted in determining an employee's net pay?

a. FUTA taxes

b. SUTA taxes

c. FICA taxes

d. all of the above

29. The total earnings of an employee for a payroll period is referred to

as

a. take-home pay

b. pay net of taxes

c. net pay

d. gross pay

30. Which of the following are included in the employer's payroll taxes?

a. SUTA taxes

b. FUTA taxes

c. FICA taxes

d. all of the above

31. 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

32. Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?

a. Cost concept

b. Business entity concept

c. Matching Concept

d. Materiality concept

1. The Sarbanes-Oxley Act requires that financial statements of all

public companies report on management's conclusions about the

effectiveness of the company's internal control procedures.

T/F

2.Internal control is enhanced by separating the control of a

transaction from the record-keeping function.

TF

3. A voucher is a form on which is recorded pertinent data about a

liability and the particulars of its payment

1. An intangible asset is one that has a physical existence.

T/F

2. When minor errors occur in the estimates used in the determination

of depreciation, the amounts recorded for depreciation expense in

the past should be corrected.

T/F

3. When a property, plant, and equipment asset is sold for cash, any

gain or loss on the asset sold should be recorded.

T/F

4. Receiving payment prior to delivering goods or services causes a

current liability to be incurred.

T/F

5. The borrower is the one who issues a note payable to a creditor.

T/F

6. In order to be a recorded contingent liability, the liability must be

possible and easily estimated.

24. Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates doubtful accounts of $15,000. Which of the following entries records the proper provision for doubtful accounts?

a. debit Uncollectible Accounts Expense, $800; credit Allowance for Doubtful Accounts, $800

b. debit Uncollectible Accounts Expense, $14,200; credit Allowance for Doubtful Accounts, $14,200

c. debit Allowance for Doubtful Accounts, $800; credit Uncollectible Accounts Expense, $800

d. debit Allowance for Doubtful Accounts, $15,800; credit Uncollectible Accounts Expense, $15,800

25. The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

a. will increase income in the period it is collected.

b. will decrease income in the period it is collected.

c. does not affect income in the period it is collected.

d. requires a correcting entry for the period in which the account was written off.

26. An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a

a. debit to Allowance for Doubtful Accounts for $2,800.

b. debit to Bad Debts Expense for $2,800.

c. debit to Allowance for Doubtful Accounts for $4,000.

d. credit to Allowance for Doubtful for $4,000.

27. The amount of a promissory note is called the

a. realizable value

b. maturity value

c. face value

d. proceeds

28. The amount of the promissory note plus the interest earned on the due date is called the

a. realizable value

b. maturity value

c. face value

d. net realizable value

29. A 60-day, 10% note for $8,000, dated April 15, is received from a customer on account. The face value of the note is

a. $8,600

b. $7,200

c. $8,800

d. $8,000

30. A 90-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

a. $10,000

b. $10,300

c. $450

d. $9,550

31. On November 1, Blazer Company receives a 6% interest bearing note from Ram Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Blazer should record interest revenue of

a. $0

b. $100

c. $200

d. $600

32. If the maker of a promissory note fails to pay the note on the due date, the note is said to be

a. displaced

b. disallowed

c. dishonored

d. discounted

ABCD 33.

The number of days' sales in receivables

a. is an estimate of the length of time the receivables have been outstanding

b. measures the number of times the receivables turn over each year

c. is Net Credit Sales divided by Average Receivables

d. is not meaningful and therefore is not used

14. Accompanying the bank statement was a debit memorandum for an NSF check received from a customer. What entry is required in the depositor's accounts?

a. debit Other Income; credit Cash

b. debit Cash; credit Other Income

c. debit Cash; credit Accounts Receivable

d. debit Accounts Receivable; credit Cash

15. A $100 petty cash fund has cash of $18 and receipts of $80. The journal entry to replenish the account would include a

a. credit to Petty Cash for $84.

b. debit to Cash for $80.

c. debit to Cash Over and Short for $2.

d. credit to Cash for $80

16. The type of account and normal balance of Petty Cash is a(n)

a. revenue, credit

b. asset, debit

c. liability, credit

d. expense, debit

17. The debit recorded in the journal to reimburse the petty cash fund is to

a. Petty Cash

b. Accounts Receivable

c. Cash

d. various accounts for which the petty cash was disbursed

18. The receivable that is usually evidenced by a formal instrument of credit is a(n)

a. trade receivable.

b. note receivable.

c. accounts receivable.

d. income tax receivable.

19. The type of account and normal balance of Allowance for Doubtful Accounts is

a. contra asset, credit

b. asset, debit

c. liability, credit

d. expense, debit

e. expense, credit

20. An alternative name for Bad Debts Expense is

a. Collection Expense.

b. Credit Loss Expense.

c. Uncollectible Accounts Expense.

d. Deadbeat Expense.

21. Two methods of accounting for uncollectible accounts are the

a. direct write-off method and the allowance method.

b. allowance method and the accrual method.

c. allowance method and the net realizable method.

d. direct write-off method and the accrual method.

22. Under the allowance method, writing off an uncollectible account

a. affects only income statement accounts.

b. is not acceptable practice.

c. affects only balance sheet accounts.

d. affects both balance sheet and income statement accounts.

23. If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

a. Uncollectible Accounts Expense

b. Allowance for Doubtful Accounts

c. Accounts Receivable

d. Interest Expense

4. When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

a. risk assessment

b. monitoring

c. proofs and security measures

d. separating responsibilities for related operations

5. On the bank's accounting records, customers' accounts are normally shown as

a. debit balances

b. expenses

c. an asset

d. a liability

6. A bank statement

a. is a credit reference letter written by the depositor's bank.

b. lets a depositor know the financial position of the bank as of a certain date.

c. is a bill from the bank for services rendered.

d. shows the activity that increased or decreased the depositor's account balance.

7. Which one of the following would not cause a bank to debit a depositor's account?

a. Bank service charge

b. Collection of a note receivable

c. Checks marked NSF

d. Wiring of funds to other locations

8. A person authorized to write checks drawn on a checking account at a bank must sign and have on file with the bank a

a. signature card

b. deposit ticket

c. checkbook

d. bank card

9. A bank reconciliation should be prepared periodically because

a. the depositor's records and the bank's records are in agreement

b. the bank has not recorded all of its transactions

c. any differences between the depositor's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected

d. the bank must make sure that its records are correct

10. The bank reconciliation

a. should be prepared by an employee who records cash transactions

b. is part of the internal control system

c. is for information purposes only

d. is sent to the bank for verification

11. The amount of deposits in transit is included on the bank statement as a(n)

a. deduction from the balance per the depositor's books

b. deduction from the balance per bank statement

c. addition to the balance per bank statement

d. addition to the balance per depositor books

12.

The amount of the outstanding checks is included on the bank reconciliation as a(n)

a. deduction from the balance per depositor's records

b. addition to the balance per bank statement

c. deduction from the balance per bank statement

d. addition to the balance per depositor's records

13.

Accompanying the bank statement was a debit memorandum for an NSF check received from a customer. This item would be included on the bank reconciliation as a(n)

a. deduction from the balance per depositor's records

b. addition to the balance per bank statement

c. deduction from the balance per bank statement

d. addition to the balance per depositor's records

The balance in the prepaid rent account before adjustment at the end of the year is $15,000, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is:

a. debit Rent Expense, $5,000; credit Prepaid Rent, $5,000

b. debit Prepaid Rent, $10,000; credit Rent Expense, $5,000

c. debit Rent Expense, $10,000; credit Prepaid Rent, $5,000

d. debit Prepaid Rent, $5,000; credit Rent Expense, $5,000

A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting Entry necessary at the end of the fiscal period ending on Thursday is:

a. debit salaries Payable, $16,000; credit Cash, $16,000

b. debit salaries Expense, $16,000; credit Cash, $16,000

c. debit salaries Expense, $16,000; credit Salaries Payable, $16,000

d. debit salaries Expense, $16,000; credit Accounts Payable, $16,000

The entry to adjust for the cost of supplies used during the accounting period is:

a. Supplies Expense, debit; Supplies, credit

b. Income Summary, debit; Supplies, credit

c. Accounts Payable, debit; Supplies, credit

d. Supplies, debit; credit Income Summary

The entry to close the appropriate insurance account at the end of the accounting period is:

a. debit, Income Summary; credit Prepaid Insurance

b. debit, Prepaid Insurance;credit Income Summary

c. debit, Insurance Expense; credit Income Summary

d. debit, Income Summary; credit Insurance Expense

a. unread rent, debit; rent revenue, credit

b. rent revenue, debit; unread rent, credit

c. unread rent, debit; Income Summary, credit

d. rent expense, debit; unearned rent, credit

a. is not in conflict with the cash method of accounting

b. determines when revenue is credited to a revenue account

c. states that revenue is not recorded until the cash is received

d. control all revenue reporting for the cash basis of accounting

Which account would normally Not require an adjusting entry?

a. wages expense

b. accounts receivable

c. accumulated depreciation

d. capital stock

The most important output of the accounting cycle is the financial statements.

True/False

A contra asset account for Land will normally appear in the balance sheet.

True/False

Generally accepted accounting principles require accrual- basis accounting.

True/False

Accumulated depreciation accounts are liability accounts.

True/False

June 26 Supplies 500

Accounts Payable 500

?????????????????

a. Purchased supplies with cash

b. Investment of supplies by stockholder

c. Purchased supplies by stockholder

d. Paid accounts payable