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Study Resources (Accounting)

11) The adjustment for bad debts using the percentage of receivables ignored the debit balance in the Allowance account. This error would cause A) total assets to be overstated. B) total liabilities to be understated. C) net income to be understated. D) None of these are correct. 12) The adjustment for bad debts using the.
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46) Evaluate the differences of the effect on the financial statements between the income statement approach and the balance sheet approach for estimating bad debts expense on the financial statement presentation. 47) Determine the amount of the adjustment for bad debts given: Bad debts are estimated to be 8% of sales Accounts receivable.
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77) The following accounts are on the Balance Sheet section of Scents Galore worksheet for the period ending November 30, 2014. Required: Prepare a classified Balance Sheet for the company as of Nov. 30, 2014. Additional information: Withdrawals for the period are $4, and Net Income is $12. Account Balance Sheet Debit Balance Sheet.
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105) Calculate (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following: Sales$2,200Beginning Inventory $65 Sales Discount50 Net Purchases1,320 Sales Returns and Allowances25Ending Inventory51  Operating Expenses360 106) Brady Company's unadjusted trial balance includes the following: Cash$2,100 Unearned Legal Fees600 Legal Fees Revenue7,200 The accounting department has been notified that legal services.
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73) The amount for beginning inventory is not needed when calculating Cost of Goods Sold. 74) Under the periodic inventory system, an adjustment is made on the worksheet for inventory. 75) The beginning inventory is adjusted by crediting Merchandise Inventory and debiting Income Summary. 76) The ending inventory is adjusted by debiting Income.
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92) Indicate the normal balance of each of the following accounts: a) Purchases Returns and Allowances b) Merchandise Inventory c) Freight-In d) Sales Discount e) Unearned Revenue 93) Indicate the financial statement(s) on which you would find the following items: a) Cost of goods sold b) Freight-in c) Ending Inventory d) Beginning Inventory e) Sales Discount .
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97) Why is beginning and ending inventory kept as two separate figures in the cost of goods sold section? 98) Prepare the general journal entry to record the adjustment for inventory: Beginning inventory $5,000 Ending inventory 6,000 99) Camping is Fun purchased merchandise costing $2,000. Calculate the cost of goods sold under the following.
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32) Use the following information to complete the partial worksheet for Rebecca's Company. Record the appropriate adjusting entries using the data below and extend the balances over to the adjusted trial balance columns. Merchandise inventory–ending $15 Store supplies on hand4 Amortization on store equipment 1 Accrued salaries 2 Rebecca’s CompanyPartial WorksheetFor the Year Ended.
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13.3   Preparing a post-closing trial balance. 1) The post-closing trial balance contains A) assets and liabilities. B) all accounts with balances. C) only permanent accounts. D) All of these answers are correct. 2) The post-closing trial balance is prepared from A) the income statement columns on the worksheet. B) the balance sheet columns on the worksheet. C) the trial.
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63) Merchandise Inventory (ending) appears on both the Income Statement and the Balance Sheet. 64) If ending inventory is overstated this period, beginning inventory will be overstated in the next period. 65) The ending inventory in Year 1 is the beginning inventory in Year 2. 66) The Income Summary account is used to.
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31) Under the accrual method of accounting, the allowance method is generally required for financial reporting purposes. 32) When it is possible to make a reasonable estimate of uncollectible accounts, the allowance method is preferred for financial reporting purposes. 33) Bad Debts Expense is recorded in the year the sale was earned.
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33) Prepare a partial balance sheet for the Meredith Company at December 31, 2014, from the following information: Cash$10,000 Accounts Receivable6,000 Bad Debts Expense 1,400 Merchandise Inventory1,800 Allowance for Doubtful Accts.200 Use the account code numbers to identify how the following transactions would be journalized. [1] for cash [2] for accounts receivable [3] for allowance for doubtful accounts [4] for.
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102) Sales Beginning Inventory Purchases Ending Inventory Cost of Goods Sold Gross Profit Expense Net Income Or Net Loss f) 16 20 12 g) 16 h) -2 f) ________________ g) ________________ h) ________________ 103) Sales Beginning Inventory Purchases Ending Inventory Cost of Goods Sold Gross Profit Expense Net Income Or Net Loss 32 i) 20 14 j) 12 k) 4 i)  ________________ j)   ________________ k) ________________ 104) Indicate the normal balance of each of the following accounts: a. Purchases Returns and Allowances b. Merchandise Inventory (beginning of the period) c. Freight-In d..
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14.2   Using the income statement approach and the balance sheet approach to estimate the amount of Bad Debts Expense. 1) Gross Accounts Receivable is $10,000. Allowance for Doubtful Accounts has a credit balance of $200. Net sales for the year are $150,000. In the past, 1% of sales had proved uncollectible..
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13.2   Recording adjusting and closing entries. 1) How is Income Summary closed if the company had a net loss? A) Credit Income Summary; debit Capital B) Debit Income Summary; credit Capital C) Debit Capital; credit Withdrawals D) Debit Withdrawals; credit Capital 2) How is Income Summary closed if the company had a net income? A) Debit Capital;.
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86) Determine the beginning inventory of a business having: Beginning Capital balance of $11,000 No additional investments or withdrawals Net sales of $43,500 Net purchases $26,000 Ending inventory of $4,250 Ending Capital balance of $10,000 Operating expenses of $16,500 $________________ 87) The following amounts are on the Mungh Company worksheet for the month ended September 30, 2014. Required: Calculate the.
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94) Calculate: (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following: Sales$3,000Beginning Inventory$ 500 Sales Discount 50Net Purchases 1,400 Sales Returns and Ending Inventory700    Allowances 80Operating Expenses 300 95) Calculate: (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net.
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79) Identify the category(s) of each of the accounts below. Current Asset Plant and Equipment Current Liabilities Long-Term Liabilities Item Category 0) Cash Current Asset       ________________ a) Accts. Receivable________________________________ b) Accts. Payable________________________________ c) Mortgage Payable________________________________ d) Office Equipment________________________________ e) Prepaid Insurance________________________________ 80) Identify the category(s) of each of the accounts below. Current Asset Plant and Equipment Current Liabilities Long-Term Liabilities ItemCategory 0. Cash Current Asset       ________________ a) Accts. Payable________________________________ b).
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13.1   Preparing financial statements for a merchandise company. 1) The income statement is prepared from the A) balance sheet. B) worksheet. C) general journal. D) statement of owner's equity. 2) To determine how much merchandise was returned from a company's customers, the company should review the A) Purchases Returns and Allowances Account. B) Purchases Discount Account. C) Sales Returns.
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21) The Bad Debts Recovered account would be reported on the Balance Sheet. 22) After an account is written off, two entries are required to indicate a collection of the previously written off account. 23) Catalina Sports uses the allowance method of accounting for uncollectible accounts. Record journal entries for the transactions.
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83) Sales Discount is used when calculating Net Purchases. 84) Ending merchandise inventory is subtracted when calculating the cost of goods sold. 85) The ending inventory figure is shown on the balance sheet. 86) The income statement shows beginning inventory as a part of cost of goods sold. 87) Unearned Rent is one type.
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42) Purchases Discounts________________________________________________ 43) Purchases Returns & Allow.________________________________________________ 44) Sales________________________________________________ 45) Sales Returns & Allow.________________________________________________ 46) Sales Discounts________________________________________________ 47) Amortization Expense________________________________________________ 48) Prepare the closing entries from the following information on the PC Pros Company worksheet income statement columns. Income Statement DebitCredit Sales17 Sales Ret. and Allow.1 Income Summary56 Purchases11 Pur. Ret. and Allow.2 Insurance Expense3 Office Salaries Expense1 .
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11) Freight-in is A) a Cost of Selling Goods. B) a Cost of Purchasing Goods. C) recorded as an Operating Expense. D) recorded as an asset. 12) The calculation of Net Purchases does not include A) Purchases Returns and Allowances. B) Purchases Discounts. C) Purchases. D) Freight-in. 13) Which of the following is not an operating expense? A) Payroll Tax Expense B).
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21) Which financial statement reports Bad Debts Expense? A) Balance sheet B) Income statement C) Statement of owner's equity D) General journal 22) The two approaches for estimating bad debts are A) balance sheet and income statement methods. B) balance sheet and net realizable value methods. C) income statement and net realizable value methods. D) net realizable value method.
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12.2   Preparing a worksheet for a merchandise company. 1) When completing a worksheet, A) the ending inventory amount appears in the income statement debit column. B) the beginning inventory amount appears in the adjustment credit column. C) the ending inventory amount appears in the unadjusted trial balance debit column of the worksheet. D) the beginning.
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14.3   Preparing an Aging of Accounts Receivable. 1) If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible? A) Bad Debts Expense B) Accounts Receivable C) Accounts Payable D) Bad Debts Recovered 2) If the allowance method of accounting for uncollectible.
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46) Sales returns and allowances____________________________________ 47) Sales discounts____________________________________ 48) Amortization expense____________________________________ 49) Insurance expense____________________________________ 50) Explain why figures for beginning and ending inventory are not combined on the Income .
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21) Administrative Expenses include A) Insurance Expense. B) Delivery Expense. C) Amortization Expense. D) None of the above are correct. 22) Other Income is used to A) record income from sales. B) record any revenue from activities other than sales. C) record all revenue. D) record owner investments. 23) Other Expense is used to record A) selling expenses. B) administrative expenses. C) operating.
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89) The following amounts are on the D'Entrement Company worksheet for the month ended October 31. Required: Calculate the following: a.Net sales b.Net purchases c.Net cost of purchases d.Goods available for sale e.Cost of goods sold f.Gross profit INCOME STATEMENT ACCOUNT                    Debit      Credit Sales40 Sales Returns and Allowances3 Sales Discounts2 Income Summary76 Purchases16 Purchases Discount1 Purchases Returns and Allowanses1 Freight-In                         2              90) The following accounts are on the Balance Sheet section.
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11) Which inventory appears in the balance sheet column of the worksheet? A) Ending inventory B) Beginning inventory C) Combination of beginning and ending inventories D) Inventory does not appear on the balance sheet. 12) The adjusted trial balance on the worksheet A) contains balances from the permanent accounts. B) contains balances from the temporary accounts. C) contains.
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41) In what category in a classified balance sheet is Mortgage Payable found? A) Plant and Equipment B) Current Liabilities C) Long-term Liabilities D) Both B and C are correct. 42) The correct worksheet columns to use for preparing the income statement are the A) adjustments columns. B) income statement columns. C) adjusted trial balance columns. D) trial balance.
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31) Plant and Equipment is usually listed A) in alphabetical order. B) in order of liquidity. C) by how long they will last. D) None of these are correct. 32) The ending merchandise inventory was overstated. This error would cause A) net income to be understated. B) assets to be understated. C) net income to be overstated. D) None.
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37) Prepaid insurance____________________________________ 38) Unearned Rent____________________________________ 39) Accumulated Amortization equip. __________  _______________________ 40) Wages payable____________________________________ 41) Wages expense____________________________________ 42) Purchases____________________________________ 43) Purchase discounts____________________________________ 44) Purchase returns and allowances____________________________________ 45) Sales____________________________________ .
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  14.1   Using the Bad Debts Expense account and the Allowance for Doubtful Accounts account to record bad debts. 1) Which of the following situations would more likely not result in bad debts? A) The company extends credit easily. B) The company has a strict credit policy. C) The company has a cash only policy. D).
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75) The following amounts are on the Riley's Clothing worksheet for the month ended March 30. Required: Calculate the following: a) Net sales b) Net purchases c) Net cost of purchases d) Goods available for sale e) Cost of goods sold f) Gross profit Account Income Statement Debit Credit Sales35 Sales Returns and Allowances4 Sales Discounts 2 Income Summary1113 Purchases13 Purchases Discount2 Purchases Returns and Allowances4 Freight-In2 76).
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21) The Balance Sheet columns on the worksheet prepared for the Villeneuve Company had subtotals as follows debit column, $14,000, and credit column, $14,600. This information indicates that A) the company incurred a net income of $600. B) the company incurred a net loss of $600. C) an error was made when preparing.
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49) Prepare closing entries from the following information on the Warner Books worksheet income statement columns. Additional information: Withdrawals equal $20 for the period. Income Statement DebitCredit Sales80 Sales Ret. and Allow.8 Income Summary1622 Purchases42 Pur. Ret. and Allow.8 Sales Salaries Expense12 Office Salaries Expense4 50) Prepare the adjusting journal entries from the following items on the Pedersen Company worksheet. ADJUSTMENTS DebitCredit Interest.
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11) Vaughn Music Company learns the accounts receivable for customer Al Badnews is uncollectible. The journal entry under the allowance method would be A) debit Allowance for Doubtful Accounts, credit Accounts Receivable. B) debit Sales, credit Allowance for Doubtful Accounts. C) debit Bad Debts Expense, credit Accounts Receivable. D) debit Allowance for Doubtful Accounts,.
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14.4   Writing off an account using the Allowance for Doubtful Accounts method. 1) No entry was recorded to reinstate a bad debt when making a collection. The allowance method is being used. This error would cause A) total assets to be overstated. B) total liabilities to be understated. C) net income to be understated. D).
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81) Discuss the purpose of a detailed income statement. Briefly describe the major kinds of business activities covered on a detailed income statement. 82) Discuss the purpose of a classified balance sheet. Include a description of the major balance sheet classifications including: current assets, plant and equipment, current liabilities, and long-term.
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11) Fit City estimates it will collect $2,300 of the $2,425 owed by customers. The difference of $125 represents the A) Gross Accounts Receivable. B) Allowance for Doubtful Accounts. C) Net Realizable Value. D) Value of the Current Unpaid Receivables. 12) After the accounts are adjusted and closed at the end of the year, Accounts.
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11) a) Calculate the estimated uncollectible accounts from the following aging analysis. b) Prepare the adjusting journal entry. The unadjusted balance of the allowance account is $100 credit. GROSS REC. ESTIMATED % LOSS AMOUNT NEEDED IN ALLOW. ACCT Not yet due Days past due 1-30 31-60 61-90 Over 90 days $5,200 2,000 820 200 160 3 4 10 20 50 Total Accts. Rec. Tot. Required in Allowance 12) a) Calculate the estimated uncollectible accounts from.
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