Info
Warning
Danger

Study Resources (Accounting)

17.3   Learning Objective 17-3 1) Partners Brian, Josh, and Chad have capital balances of $7,000, $3,000, and $90,000, respectively. The losses for the year are $12,000. What will Josh's capital balance be if the three partners share profits and losses at a 2:2:6 ratio? A) $600 credit balance B) $1,000 debit balance C) $2,400.
5 Views
View Answer
11) Warner Enterprises was unable to collect a $1,000 note receivable plus $60 interest on the maturity date, but hoped to collect the amount in the future. Warner should record this as: A) debit Bad Debts Expense $1,000; credit Notes Receivable $1,000. B) debit Allowance for Doubtful Accounts $1,060; credit Notes Receivable.
2 Views
View Answer
21) Dividends in arrears occur when the company does not pay dividends to: A) cumulative preferred stockholders. B) non-cumulative preferred stockholders. C) participating preferred stockholders. D) non-participating common stockholders. 22) Par value is equal to: A) market value of the stock. B) the amount stated in the charter or legal capital. C) retained earnings. D) the initial price at.
3 Views
View Answer
18.1   Learning Objective 18-1 1) The articles of incorporation are: A) submitted by the incorporators to the IRS for approval. B) submitted by the incorporators to the Office of the Secretary of State for approval. C) submitted by the incorporators to Securities and Exchange Commission for approval. D) submitted by the incorporators to the Governor.
9 Views
View Answer
15.2   Learning Objective 15-2 1) Tracking individual inventory items is tracked in the: A) accounts receivable ledger. B) inventory ledger. C) accounts payable ledger. D) purchases journal. 2) An entry to record the payment to a vendor was correctly recorded and posted to the general ledger but was not posted to the subsidiary ledger. This error.
6 Views
View Answer
14.3   Learning Objective 14-3 1) When a business endorses a note and transfers it to a financial institution, the process is called: A) dishonoring a note receivable. B) collecting a note receivable. C) cosigning a note receivable. D) discounting a note receivable. 2) When a note receivable is discounted, the business that endorses the note becomes.
2 Views
View Answer
11) Under the perpetual inventory system, in addition to making the entry to record a return of goods from a customer, a company would: A) debit Merchandise Inventory and credit Cost of Goods Sold. B) debit Cost of Goods Sold and credit Merchandise Inventory. C) debit Sales and credit Cost of Goods Sold. D).
14 Views
View Answer
16) The two types of allowances that may be considered before the division of profits and losses are: A) interest and salary allowances. B) interest and bonus allowances. C) salary and bonus allowances. D) bonus and liquidation allowances. 17) The income/loss agreement was ignored when closing the income summary and all income was distributed evenly..
7 Views
View Answer
16) Paying the principal plus interest would have which effect on the categories? A) Total liabilities would be increased. B) Total assets would be decreased. C) Owner's equity would be decreased. D) B and C could be correct. 17) An adjustment that must be made for the accrued interest on a note receivable is to: A).
3 Views
View Answer
17.2   Learning Objective 17-2 1) Salary and interest allowances for partners are: A) expenses on the income statement. B) liabilities on the balance sheet. C) a means of dividing net income or loss between the partners. D) None of these answers are correct. 2) Which method of allocation of profits and losses is based on a.
3 Views
View Answer
17.5   Learning Objective 17-5 1) When a partnership is terminated, the assets are turned into cash and obligations are paid. This process is called: A) dissolution. B) termination. C) realization. D) None of the above. 2) The first step take in liquidating a partnership is to: A) sell the assets. B) divide profits on assets with partners. C) pay.
5 Views
View Answer
17.4   Learning Objective 17-4 1) James wants to invest cash so that he will have a one-third interest in Thomas and Stanley's company. The capital balances are $2,000 Thomas, $6,000 Stanley. The admission of James would be to: A) debit Cash $2,666.67; credit James, Capital $2,666.67. B) debit Cash $5,333.33; credit James, Capital.
27 Views
View Answer
28) Assume that in Year 1, the ending merchandise inventory is overstated by $30,000. If this is the only error in Year 1, fill in the items below, indicating which items will be understated, overstated, or correctly stated for Year 1. Ending merchandise inventoryYear 1 ________ Beginning merchandise inventoryYear 1 ________ Cost of.
4 Views
View Answer
21) The Securities and Exchange Commission Act defines a partnership as "an association of two or more persons to carry on as co-owners of a business for profit." 22) A partnership is defined by the Uniform Partnership Act. 23) Unlimited liability means that the act of a single partner is binding on.
2 Views
View Answer
17.1   Learning Objective 17-1 1) Many associations such as medical centers and law firms could organize as a: A) sole proprietorship. B) corporation. C) partnership. D) All of the above. 2) The accounting procedures are the same for sole proprietorships as for partnerships with the exception of: A) the asset section includes more than one cash account. B).
10 Views
View Answer
41) Sold merchandise for cash. - Periodic 42) Returned merchandise inventory for credit - Periodic 43) Paid for merchandise after the discount period expired. - Perpetual 44) Paid for merchandise after the discount period expired. - Periodic 45) Sold merchandise on account. - Perpetual 46) Sold merchandise on account - Periodic 47) Customer returned goods -.
3 Views
View Answer
31) The financial loss that each stockholder in a corporation can incur is limited to the amount invested by the stockholder. 32) A change in ownership terminates the corporation. 33) The stockholders of a corporation have mutual agency. 34) The Articles of Incorporation are submitted to the Secretary of State. 35) A stock certificate.
3 Views
View Answer
11) Authorized capital stock is: A) shares listed in the charter. B) shares issued to the corporation's officers. C) shares sold and in stockholder possession. D) shares that pay dividends. 12) Which of the following would normally not appear in the Stockholders' Equity section of the balance sheet? A) Cash B) Paid-in Capital C) Common Stock D) Preferred Stock 13).
6 Views
View Answer
7) Budgeting for items such as equipment and furniture would be considered: A) capital expenses. B) capital expenditures. C) general expenses. D) general expenditures. 8) Some of the past depreciation is canceled in recording an extraordinary repair. 9) A capital expenditure is recorded in an asset account. 10) Define and compare capital expenditures and revenue expenditures. 11) Prepare.
2 Views
View Answer
16) The partnership of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respectively. Before liquidation, their balance sheet balances are as follows: Cash$10,000 Other Assets8,000 Liabilities4,000 Brandon, Capital 7,000 Ryan, Capital7,000 a) If the Other Assets are sold for $10,000, how much will each partner receive before paying.
5 Views
View Answer
16) Jane invests $8,000 for a one-fourth interest in a partnership in which the other partners have capital totaling $16,000 before admitting Jane. After distribution of the bonus, Jane's capital is: A) $4,000. B) $6,000. C) $8,000. D) $10,000. 17) Bill pays Steve $9,000 for his $7,000 interest in a partnership. On the partnership books: A).
6 Views
View Answer
30) Prepare general journal entries for the Knapp Computers Company for the following transactions: Aug. 1 Received a $9,000, 60-day, 6% note from Barber's Accounting Service in settlement of its                             account. 31 Recorded the adjustment for interest. Sep. 30 Barber paid the note and interest at maturity. 31) Prepare general journal entries.
2 Views
View Answer
16.1   Learning Objective 16-1 1) Which of the following assets would not be classified as property, plant, and equipment? A) Delivery truck B) Copyright C) Land D) Furniture 2) The amount to include in the entry to record the cost of a property, plant, and equipment asset would include: A) acquisition cost. B) freight. C) installation. D) All of these.
8 Views
View Answer
27) Which of the following goods should Nassen Company include in its December 31, 200X, count? A) Goods held on consignment for Acorn Supply B) Goods sold to Crishom, F.O.B. destination, and arrival date scheduled for January 5 C) Goods that are not salable D) Goods in transit purchased F.O.B. destination 28) Goods on consignment.
2 Views
View Answer
30) Prepare journal entries for the following transactions for HO Train Shop applying the perpetual inventory system. Omit explanations. Mar. 2 Purchased on account 200 model engines for $2,000. 12 Returned 20 engines for full credit. 19 Sold 50 of the engines to R. Holmes for $1,000 cash. 25 Paid the balance due on.
3 Views
View Answer
Given the following accounts: [1] Cash [2]Accounts receivable [3]Allowance for doubtful accounts [4]Merchandise inventory [5]Store supplies [6]Store equipment [7]Accumulated depreciation [8]Notes payable [9]Accounts payable [10]Able Partner's Capital [11]Baker Partner's Capital [12]Able Partner's withdrawals [13]Baker Partner's withdrawals [14]Income summary [15]Service revenue [16]Gain on realization [17]Loss on realization Indicate the account(s) to be debited and credited to record the following transactions. 20) Able partner invested cash in the business. Debit ________ &.
6 Views
View Answer
16.6   Learning Objective 16-6 1) Amortization of a patent was ignored. This error would cause: A) the period's net income to be overstated. B) the period's net income to be understated. C) the period end assets to be understated. D) None of these are correct. 2) The credit portion of the adjustment for the depletion of.
2 Views
View Answer
16.3   Learning Objective 16-3 1) Using MACRS rates for a 3, 5, 7, and 10-year property, what is the percentage for the depreciable rate? A) 200 percent B) 150 percent C) 125 percent D) 100 percent 2) According to the MACRS tax rate table, the following classes use straight-line depreciation: A) residential rental property. B) automobiles. C) railroad tracks. D).
4 Views
View Answer
16.2   Learning Objective 16-2 1) The cost of equipment is expensed: A) at the time it is paid. B) over the periods that benefit the company. C) in the period it is purchased. D) in the period it is sold. 2) In the last year of useful life, the salvage value was ignored using double-declining-balance depreciation..
2 Views
View Answer
16.5   Learning Objective 16-5 1) When selling a plant asset, the gain was not recorded, but pocketed. This error would cause: A) the period's net income to be understated. B) the period's net income to be overstated. C) the period end assets to be overstated. D) None of these are correct. 2) When equipment that is.
2 Views
View Answer
14.2   Learning Objective 14-2 1) For the maker, being given additional time to settle an account with issuance of a note results in a shift of: A) assets from Notes Receivable to Accounts Receivable. B) assets from Accounts Receivable to Notes Receivable. C) liabilities from Notes Payable to Accounts Payable. D) liabilities from Accounts Payable.
2 Views
View Answer
14.4   Learning Objective 14-4 1) The adjusting entry for accrued interest on a notes receivable includes: A) a debit to Interest Expense; a credit to Interest Revenue. B) a debit to Accrued Interest Receivable; a credit to Interest Revenue. C) a debit to Interest Revenue; a credit to Accrued Interest Payable. D) a debit to.
2 Views
View Answer
41) Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. April1 Beginning inventory20 units @ $30 11 Purchases70 units @ $32 21 Purchases50 units @ $35 Sales for April: 115 units a) ________ FIFO b) ________ LIFO c).
3 Views
View Answer
11) A promissory note comes due on the: A) discount date. B) maturity date. C) interest note. D) issue date. 12) The basic formula for calculating the interest on a note is: A) Interest = Principal × Rate × Time. B) Interest = (Principal × Rate) - Time. C) Interest = (Principal × Time) + Rate. D) Interest =.
5 Views
View Answer
11) Assets that are not expected to provide benefits for a number of accounting periods are called: A) current assets. B) fixed assets. C) long-term assets. D) property, plant, and equipment. 12) Tangible assets include: A) patents. B) cash. C) trademarks. D) copyrights. 13) Costs and assessments that should be charged to the land account include: A) streets. B) parks. C) flood prevention. D).
7 Views
View Answer
15.4   Learning Objective 15-4 1) A method that uses average gross profit rate and net sales to compute inventory is: A) the retail method. B) the LIFO. C) the weighted-average method. D) None of these answers are correct. 2) Chewy Candy has a beginning inventory of $1,000. June purchases were $3,000, and retail sales were $5,000..
2 Views
View Answer
15.1   Learning Objective 15-1 1) In a perpetual inventory system: A) Merchandise Inventory is debited every time inventory is purchased. B) Cost of Goods Sold is debited every time inventory is sold. C) a physical inventory is taken at least annually. D) all of the above take place. 2) Under the perpetual system, the purchase of.
9 Views
View Answer
21) In a perpetual inventory system, the Merchandise Inventory account is updated: A) at the end of the accounting period. B) once each month. C) when merchandise is purchased. D) The account never needs updating. 22) Only periodic systems must take a physical inventory at year-end. 23) When a perpetual inventory system is used, a physical.
3 Views
View Answer