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Study Resources (Accounting)

Learning Objective 4.4 Questions 1) An example of an adjusting entry is A) the payment of wages that have been accrued. B) the accruing of interest expense. C) the return of defective inventory. D) the payment of rent in advance. E) collection of an accounts receivable. 2) An adjusting entry made to record accrued interest on a.
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Learning Objective 4.7 Questions 1) A classified balance sheet A) can only be viewed by upper management. B) classifies assets as "current" if possessed at the end of the current month and as "deferred" if they are expected to be owned at the end of the following month. C) classifies accounts as either assets,.
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21) Assume the periodic inventory system is used. Nicolla Company sold inventory for cash of $6,000. A week later, the inventory was returned and a cash refund was given to the customer. Nicolla's journal entry to record the return of the inventory would be which of the following? A) Cash 6,000 Accounts.
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Learning Objective 4.6 Questions 1) The order of the steps in the recording process has A) the adjusted trial balance after preparing the financial statements. B) the journalization and posting of adjustments before the ledger. C) the adjusted trial balance before the ledger. D) journalization after the adjusted trial balance. E) the unadjusted trial balance after.
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8) The following information is associated with the bank reconciliation of Tall Hills Ski Resort as of October 31, 20X4: Balance per bank $ 956 Balance per books 538 Bank service charge 31 Deposits in transit 108 NSF check from a credit customer 57 Outstanding checks 614 a. Prepare a bank reconciliation for Tall Hills Ski Resort.
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Learning Objective 4.5 Questions 1) If Company A has an accrual of interest to be received on a note receivable, then the company should debit A) Interest expense. B) Accrued interest payable. C) Accrued interest receivable. D) Interest revenue. E) Cash. 2) Which of the following is an example of an accrual of unrecorded revenues? A) Interest accrues.
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11) The adjusting entry to record accrued salaries earned includes a debit to accrued salaries payable. 12) Failure to adjust for an unrecorded expense such as wages expense will overstate net income and stockholders' equity for the period. 13) Failure to adjust for an unrecorded expense such as interest expense will understate.
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Learning Objective 5.6 Questions 1) The indirect method of preparing the statement of cash flows A) is seldom used by companies because of the extra effort required to gather cash flow information. B) calculates only the cash effect of each operating activity. C) is the method preferred by the FASB. D) begins with net income,.
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Learning Objective 4.3 Questions 1) Which of the following situations involves a deferral? A) Recording accrued interest B) Recording accrued wages C) Recording revenue earned but not yet received D) Recording revenue earned that was collected in advance E) None of the above are deferrals. 2) The adjustment for revenue received in advance, which has been earned.
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8) The following single-step income statement for Balm Butters and Jellies needs to be converted into a multiple-step income statement for the year ended December 31, 2012. Balm Butters and Jellies Income Statement For the year ended December 31, 2012 Revenues: Sales $840,000 Interest Revenue 3,000 $843,000 Expenses: Cost of Goods Sold 434,800 Depreciation Expense 4,200 Income tax Expense 59,300 Insurance Expense.
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Learning Objective 4.8 Questions 1) Gross profit appears on a A) single-step income statement. B) classified balance sheet. C) multiple-step balance sheet. D) multiple-step income statement. E) single-step balance sheet. 2) Which account is usually a separate line item on the multiple-step income statement? A) Cash B) Dividends C) Paid-in capital D) Retained earnings E) Income taxes 3) Gross profit is defined as A).
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11) Implicit transactions are events such as cash receipts and disbursements that trigger nearly all day-to-day routine entries. 12) Some explicit transactions (e.g., the loss of assets due to fire) do not involve actual exchanges of goods and services between parties. 13) Every adjusting entry affects one income statement account and one.
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Learning Objective 6.2 Questions 1) Lazareth Machine Metals sold inventory to Talla Manufacturing for $5,000 cash. Which of the following is the journal entry made by Lazareth Machine Metals? Assume the periodic inventory system is used. A) Cost of Goods Sold 5,000 Sales 5,000 B) Cash 5,000 Inventory 5,000 C) Accounts Receivable 5,000 Sales 5,000 D) Cash 5,000 Sales.
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Learning Objective 6.6 Questions 1) Good accounting controls A) include all methods and procedures that facilitate management's planning and control of operations. B) help maximize efficiency and minimize waste, unintentional errors, and fraud. C) are not concerned with the accuracy of the financial records. D) are not concerned with safeguarding assets. E) All of the above.
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Learning Objective 5.7 Questions 1) Which of the following statements is incorrect, regarding the effect of depreciation expense on a statement of cash flows using the indirect method? A) Depreciation expense is not an outflow of cash. B) Depreciation expense represents an inflow of cash. C) Depreciation expense is added in the operating activities.
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Learning Objective 5.4 Questions 1) Chorba Chocolates had the following account balances on its balance sheets at December 31, 2012 and 2011, respectively: 12/31/12 12/31/11 Fixed Assets $80,000 $67,000 Accumulated Depreciation 44,000 39,000 Depreciation expense for 2012 was $7,000. There were no gains or losses on the 2012 income statement. One fixed asset with an.
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Learning Objective 4.9 Questions 1) Which of the following statements is true with respect to the gross profit percentage? A) The gross profit percentage shows the relationship of net income to sales revenue. B) The gross profit percentage is widely regarded as the ultimate measure of overall accomplishment. C) Retailers have high gross profit.
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11) Which of the following transactions increase cash? 1. Sales of goods and services for cash 2. Receiving cash dividends 3. Collection of accounts receivable 4. Reclassifying long-term debt to short-term debt 5. Accruing interest revenue A) 1 and 2 B) 1 and 3 C) 1, 2, and 3 D) 1, 2, 3, and 4 E) 1, 2, 3, and.
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24) Stepp Entertainment has the following selected balance sheet and income statement information: For the Year Ended Income Statement Accounts December 31, 2012 Income Tax Expense $  15,000 Cost of Goods Sold 164,000 Sales 523,000 Wage Expense 88,000 Balance Sheet AccountsAt December 31, 2012 At December 31, 2011 Accounts Payable $19,000$17,000 Cash 19,000 12,000 Income Taxes Payable 21,000 9,000 Accounts Receivable.
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Learning Objective 5.2 Questions 1) Which of the following statements is false? A) The statement of cash flows reports the cash receipts and cash payments of an entity over a period of time. B) The statement of cash flows is similar to the income statement, as they both determine the net income for.
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Learning Objective 5.5 Questions Exhibit 5-1 Cartell Paper Products Balance Sheet December 31, 2012 and 2011 12/31/12 12/31/11 Current Assets: Cash $ 4,600$ 3,100 Accounts Receivable 9,6007,900 Inventory 17,500 18,600 Supplies 1,200 2,100 Prepaid Insurance 1,400 1,000 Total Current Assets 34,300 32,700 Long-term Assets: Fixed Assets 71,000    58,000 Accumulated Depreciation (30,400)        (26,500) Patent 6,0007,100 Total Long-term Assets 46,600 38,600 Total Assets $ 80,900         $ 71,300 Current Liabilities: Accounts Payable $.
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Learning Objective 5.3 Questions 1) Cleft Company had the following account balances on its balance sheet at December 31, 2012 and 2011, respectively: 12/31/12 12/31/11 Long-term Bonds Payable $39,000 $36,000 Assume no bonds were retired during 2012. What was the positive cash flow associated with the long-term debt for Cleft Company in 2012? A) $10,000 B) $3,000 C).
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Learning Objective 7.1 Questions 1) Given the following data, what is cost of goods sold? Sales revenue $730,000 Beginning inventory 80,000 Ending inventory 95,000 Purchases of inventory160,000 A) $585,000 B) $145,000 C) $570,000 D) $175,000 E) $555,000 2) Given the following data, what is cost of goods sold? Sales revenue $10,000 Beginning inventory 3,000 Ending inventory 7,000 Purchases of inventory 5,000 A) $12,000 B) $ 9,000 C) $.
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Learning Objective 5.1 Questions 1) Which of the following statements show the results of a company over a period of time? 1. Balance sheet 2. Income statement 3. Statement of cash flows 4. Statement of stockholders' equity A) 2 and 4 B) 3 and 4 C) 1 D) 2 E) 2, 3, and 4 2) The statement of cash flows has.
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Learning Objective 4.2 Questions 1) The adjusting entry to recognize periodic depreciation expense has what effect on the basic accounting equation? A) Decrease in assets, decrease in liabilities B) Decrease in assets, increase in liabilities C) Decrease in assets, increase in stockholders' equity D) Decrease in assets, decrease in stockholders' equity E) None of these 2) An.
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11) Not recognizing depreciation expense in a given month will A) understate total assets. B) understate total revenues. C) overstate total liabilities. D) overstate net income. E) have no effect since this is a temporary error. 12) If depreciation expense is not recorded for the current accounting period, total assets will be understated. 13) If the entry.
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11) Prepaid expenses are listed as current assets on the balance sheet. 12) Current assets must be greater than current liabilities. 13) Current assets are cash plus those assets that are expected to be converted to cash or sold or consumed during the next 12 months or within the normal operating cycle.
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11) All of the following activities would be included in a company's operating activities on a statement of cash flows except A) payments to employees. B) payment to a local government for property taxes. C) payment to suppliers. D) payment to the bank to reduce loan balance. E) payment to landlord for rent. 12) All of.
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Learning Objective 6.1 Questions 1) A long term contract to provide services for New York City was awarded to Mason Technology on December 30, 20X1. The 4-year contract is set for $160 million and payment is certain. Services are to be provided evenly over 20X2 through 20X5. Progress measures are dependable,.
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11) Neslund Ornamentals offered a 2% trade discount to Parsons Retail Outlet for all purchases over $200,000. Parsons Retail Outlet purchased $300,000 from Neslund Ornamentals on account. Neslund uses the periodic inventory system. Which of the following is the journal entry made by Neslund Ornamentals to recognize the sale and.
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31) There are no contra accounts on the income statement. 32) Net sales is always equal to total sales revenue less sales returns and allowances. 33) Net sales is equal to total sales revenue plus sales returns and allowances and sales discounts. 34) If a company normally sells merchandise for $5,000, but allows.
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19) The issuance of long-term debt results in a cash outflow as reported in the financing section. 20) The purchase of another company's stock is an example of an investing activity. 21) Cash flows from financing activities include borrowing cash through a lender. 22) Cash flows from operating activities include the receipt of.
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Learning Objective 6.7 Questions 1) The following represent common reconciling items within a bank reconciliation: 1. Bank service charges 2. Deposits in transit 3. Outstanding checks Which of the above items will be an adjustment to the balance per books? A) 1 only B) 2 only C) 3 only D) 1 and 2 E) 2 and 3 2) In a bank.
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Learning Objective 5.8 Questions 1) The balance sheet equation provides the conceptual basis for all financial statements and can be rearranged to incorporate the statement of cash flows as follows: A) Cash + Noncash assets = Liabilities + Stockholders' equity B) Cash - Noncash assets = Liabilities + Stockholders' equity C) Assets = Liabilities.
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22) Prepare a classified balance sheet dated December 31, 2012 given the following account balances of Helder Company. Long-term Note Payable $ 11,000 Accounts Receivable 4,400 Accounts Payable 6,300 Additional Paid-in Capital 12,500 Prepaid Insurance 900 Wages Payable 2,600 Accumulated Depreciation, Equipment 9,100 Capital Stock 3,700 Inventory 8,200 Interest Payable 3,700 Retained Earnings 24,000 Equipment 55,200 Cash 4,200 Balance Sheet December 31, 2012 Cash $ 4,200 Accounts.
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24) A classified balance sheet groups assets and liabilities into two categories. Identify and define those two categories for both assets and liabilities. Why is this categorization made? Finally, two measures of liquidity can be generated using these two categories. What are the two measures of liquidity and how are.
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19) In 2012, Jaycox Custom Bikes had net income of $575,000. Jaycox also recorded $215,000 in depreciation. The company also had the following changes in its balance sheet accounts. Accounts Receivable $26,000 increase Inventories 11,000 decrease Accounts Payable 19,000 decrease Compute the net cash provided by operating activities using the indirect method. 20) Bearington Motors Income.
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Learning Objective 3.7 Questions 1) The SEC requires publicly held companies to file 10-K reports within ________ after the fiscal year ends. A) 30 days B) 60 days C) 90 days D) 120 days E) none of the above 2) Two of the largest developers of ERP systems are ________ and ________. A) Microsoft and Oracle B) Microsoft and.
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Learning Objective 4.1 Questions 1) Which of the following is an example of an accrual? A) Wages incurred but not yet paid. B) Payment of insurance 8 months in advance. C) Purchase of equipment for use in the business. D) Revenue collected in advance from customer. E) All of the above. 2) Which of the following statements.
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Learning Objective 6.3 Questions 1) Martin Optical has found that 2% of credit sales turn into bad debts and it costs the company $2,000 in administration expenses per year to manage the bad debts. Martin Optical obtains $30,000 of credit sales each year that it would not otherwise obtain if it.
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Learning Objective 6.5 Questions 1) Heintz Corporation wishes to borrow $83,000 at 11% interest from the local bank. However, the bank requires a compensating balance of 10%. The effective interest rate that Heintz Corporation will pay on the loan is which of the following? A) 10.1% B) 12.2% C) 13.2% D) 16.4% E) 14.1% 2) Which of.
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11) A policy that requires organizations to use procedures manuals to specify the flow of documents and provide information and instructions to facilitate adequate record-keeping is an example of A) adequate documentation. B) general authorization. C) specific authorization. D) proper procedures. E) an independent check. 12) Which of the following tasks is not commonly performed by.
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Learning Objective 6.4 Questions 1) Consider the following information: Cash sales $ 59,000 Credit sales 510,000 Beginning Cash 18,000 Ending Cash 11,500 Beginning Retained Earnings 32,300 Ending Retained Earnings 41,700 Beginning Accounts Receivable 40,000 Ending Accounts Receivable 50,000 Net Income 64,000 What is the accounts receivable turnover? A) 1.20 B) 2.92 C) 11.33 D) 12.64 E) 13.78 2) Consider the following information: Cash sales $ 59,000 Credit sales 510,000 Beginning.
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