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Study Resources (Accounting)

14) A merchandiser uses a perpetual inventory system. The third step in the process of closing the accounts of a merchandiser is to: A) make the revenue accounts equal to zero via the Income Summary account. B) make the Income Summary account equal to zero via the Owner's Name, Withdrawals account. C) make.
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8) Which of the following accounts will be included in a post-closing trial balance? A) Service Revenue B) Interest Payable C) Interest Expense D) Utilities Expense 9) Which of the following accounts will be included in a post-closing trial balance? A) Service Revenue B) Rent Expense C) Interest Expense D) Unearned Service Revenue 10) Which of the following accounts will.
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5) Inventory turnover measures: A) the days' sales in inventory ratio. B) how rapidly merchandise inventory is purchased. C) how rapidly merchandise inventory is sold. D) the time period for inventory become obsolete (worthless). 6) A lower days' sales in inventory for Company X when compared to other companies, indicates that Company X: A) is able.
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15) Freight out is an addition to the Merchandise Inventory account if the seller uses the perpetual inventory system. 16) On January 21st, 2014, Bessant merchandisers, received merchandise from Mullies Inc. On that date, it found a few of these goods to be damaged. On January 22, it returned the damaged.
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12) In which of the financial statements do Merchandise Inventory and Cost of goods sold appear? A) on the balance sheet and statement of owner's equity, respectively B) on the statement of owner's equity and income statement, respectively C) on the balance sheet and income statement, respectively D) on the income statement and statement.
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17) Up-to-date Merchandisers has the following transactions for the month of July. Sales revenue $460,000 Cost of goods sold 300,000 Operating expenses 85,000 Sales discounts 20,000 Sales returns and allowances 15,000 Interest revenue 5,000 Calculate Gross Profit. A) $90,000 B) $125,000 C) $140,000 D) $160,000 18) On November 1, 2015, Wrenns Martch sold merchandise with a cost of $5,000 for $10,000, FOB destination, with payment terms of 3/10,.
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  Learning Objective 5-1 1) A wholesaler is a merchandiser who buys merchandise from a manufacturer and sells the same to a retailer. 2) Hitech Inc., a small, local grocer, without optical scanning cash registers and computer systems, wants to introduce an inventory system to track its inventory. The perpetual inventory system is.
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6) Which of the following statements is true of the worksheet? A) The worksheet is a ledger. B) The worksheet is a document used to summarize data to prepare the financial statements. C) The worksheet is a financial statement issued to the public to communicate the financial results of the company. D) The worksheet.
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33) Which of the following accounts will be closed by debiting the Income Summary account? A) Depreciation Expense B) Accounts Payable C) Service Revenue D) Accumulated Depreciation 34) Which of the following accounts will be closed by crediting the Income Summary account? A) Service Revenue B) Depreciation Expense C) Accounts Payable D) Accumulated Depreciation 35) Which of the following accounts.
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13) The Accounts Payable account is a temporary account. 14) The Salaries Payable account is a permanent account. 15) The Owner's Name, Capital account is a temporary account. 16) The Accumulated Depreciation account is a permanent account. 17) The Service Revenue account is a temporary account. 18) The Depreciation Expense account is a temporary account. 19).
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27) The Sales Discounts account is a contra account to the: A) Purchases account. B) Sales Revenue account. C) Merchandise Inventory account. D) Sales Returns and Allowance account. 28) Gross profit is calculated as: A) sales revenue less sales discounts and allowances. B) sales revenue less operating expenses. C) net sales revenue less sales discounts. D) net sales revenue.
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  Learning Objective 6-1 1) The consistency principle states that a business should use the same accounting methods from period to period. 2) The lower-of-cost-or-market rule demonstrates accounting conservatism in action. 3) A company reports in its financial statements that it uses the FIFO method of inventory costing. This is an example of the.
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7) The total cost spent on inventory that was available to be sold during a period is called cost of goods sold. 8) Which of the following inventory costing methods is based on the actual cost of each particular unit of inventory? A) Specific identification B) Weighted-average C) Last-in, first-out D) First-in, first-out 9) Which of.
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45) Reid Art Supply Company uses a perpetual inventory system. The company had the following transactions during August, 2015: Aug. 5:Purchased $2,900 of merchandise on account. Freight and credit terms were FOB shipping point, 3/15, n/60. Aug. 9:Paid transportation costs of $440 for the Aug. 5 purchase. Aug. 10:Returned $600 of defective merchandise.
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  Learning Objective 4-1 1) In the balance sheet, assets are classified as either current or long-term depending on their liquidity. 2) Prepaid Rent is always classified as a long-term asset. 3) The operating cycle is the time span required for a business to repay its long-term liabilities. 4) A balance sheet prepared in the.
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5) The ending merchandise inventory for the current year is overstated by $20,000. What effect will this error have on the following year's Net Income? A) Net income will be overstated by $40,000. B) Net income will be overstated by $20,000. C) Net income will be understated by $20,000. D) Net income will be.
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21) The disclosure principle states that a company should disclose all major accounting methods and procedures in the: A) balance sheet. B) income statement. C) footnotes to the financial statements. D) adjusted trial balance. 22) The materiality concept states that a company must: A) report only such information that enhances the financial position of the company. B).
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16) The Interest Expense in the worksheet's unadjusted trial balance column is $3,000. Interest Expense in the income statement column is $7,000. Which of the following entries would have caused this difference? A) A $7,000 credit to Interest Expense in the worksheet's adjustments column B) A $7,000 credit to Interest Payable in.
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19) When inventory costs are declining, which of the following inventory costing methods will result in the highest cost of goods sold? A) First-in, first-out B) Last-in, first-out C) Weighted-average D) Specific identification 20) During a period of declining inventory costs, which of the following costing methods should be used by a company that intends.
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Learning Objective 4-5 1) The steps of the accounting cycle are followed throughout the accounting period. 2) The operating cycle is the process by which companies produce their financial statements for a specific period. 3) In an accounting cycle, an analysis of transactions is performed at the end of each accounting period. 4) The.
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18) Williams Company had the following balances and transactions during 2014. Beginning Inventory 10 units at $70 June 10 Purchased 20 units at $80 December 30 Sold 15 units December 31 Replacement cost $90 Williams maintains its records of inventory on a perpetual basis using the FIFO method. Calculate the amount of ending Merchandise Inventory at December 31, 2014.
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8) The accountant of Skyscrapers Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense. Which of the following statements is true? A) The total liabilities will be overstated. B) The equity will be understated. C) The total assets will be overstated. D) The total assets will be understated. 9) The.
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8) The following extract was taken from the worksheet of Dutch Inc. for the year 2014. From the above information, determine the amount of the Rent Expense adjustment. A) $1,200 B) $800 C) $2,000 D) $1,500 9) The partial worksheet of Ruth Furniture follows Calculate and enter the amounts for the Adjusted Trial Balance columns. Learning Objective 3-7 1).
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11) Which of the following accounts are included in an income statement? A) Land, Salaries Payable B) Owner's Name, Capital, Owner's Contribution C) Furniture, Cash D) Service Revenue, Utilities Expense 12) Property, plant and equipment are categorized as: A) current assets. B) fixed assets. C) long-term investments. D) short-term investments. 13) Patents, copyrights, and trademarks are examples of: A) short-term investments. B).
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8) Which of the following values is considered the market value when valuing inventory at lower-of-cost-or-market? A) Sales price less the company's normal mark-up percentage B) Current replacement cost C) Cost plus the company's normal mark-up percentage D) Historic cost 9) Under GAAP, which of the following amounts would be reported as Merchandise Inventory on.
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11) An entity that buys goods and sells them to customers at a markup is a: A) merchandiser. B) service provider. C) manufacturer. D) producer. 12) Gross profit is calculated as the difference between net sales revenue and: A) purchases. B) cost of goods sold. C) cost of merchandise inventory. D) selling and administrative expenses. 13) The Gajet Store Inc..
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9) Which of the following inventory costing methods yields the highest cost of goods sold during a period of rising inventory costs? A) Specific identification B) Weighted-average C) Last-in, first-out D) First-in, first-out 10) Which of the following inventory costing methods yields the lowest cost of goods sold during a period of rising inventory costs? A).
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18) The accountant for Noble Jewelry Repair Services forgot to make an adjusting entry for Depreciation Expense for the current year. Which of the following is an effect of this error? A) Revenues are understated. B) Total assets are understated. C) Net income is overstated. D) Total liabilities are understated. 19) The accountant for Noble.
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3) Under the last-in, first-out method, the amount of cost of goods sold calculated using the perpetual inventory system will differ from the amount calculated using the periodic inventory system. 4) Samson Company had the following balances and transactions during 2014: Beginning Merchandise Inventory 10 units at $95 March 10 Sold 8 units June 10 Purchased 20.
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21) Under which of the following categories would Accounts Payable appear? A) Long-term assets B) Current assets C) Long-term liabilities D) Current liabilities 22) Which of the following is a plant asset? A) Equipment B) Patents C) Trademark D) Accounts Receivable 23) The Notes Payable that are due within two years are classified as: A) current liabilities. B) current assets. C) long-term liabilities. D).
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22) An adjusted trial balance of Woods Company for the year 2015 is given below. Prepare a single-step income statement for the company. Cash $15,000 Accounts Receivable 42,000 Merchandise Inventory 60,000 Supplies 15,000 Land 300,000 Accounts Payable $3,000 Notes Payable 25,000 Smith, Capital 326,000 Smith, Withdrawals 3,000 Sales Revenues 480,000 Sales Returns and Allowances 6,000 Sales Discounts 9,000 Cost of Goods Sold 240,000 Salaries Expense 15,000 Utility Expense 69,000 Rent Expense 54,000 Interest Expense 6,000 Totals $834,000 $834,000 Learning Objective 5-6 1) The gross profit percentage measures the profitability.
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31) The balances of select accounts of Sandra Company as at December 31, 2015 are given below: Notes Payable—short term $1,200 Salaries Payable 4,000 Notes Payable—long term 25,000 Accounts Payable 3,200 Unearned Revenue 2,000 Interest Payable 2,500 The unearned revenue is the amount of cash received for services to be rendered in January, 2016. What are the total current liabilities shown on the.
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12) The following contains information from the records of the Wellborn Engineers and Architects. Current Assets $74,000 Current Liabilities 44,000 Long-term Assets 95,000 Long-term Liabilities 60,000 Total Revenues 50,000 Total Expenses 30,000 Calculate the current ratio. A) 1.58 B) 2.32 C) 0.59 D) 1.68 13) The following contains information from the records of the Wellborn Engineers and Architects. Current Assets $74,000 Current Liabilities 44,000 Long-term Assets 95,000 Long-term Liabilities 60,000 Total Revenues 50,000 Total Expenses 30,000 Which of the following statements.
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4) Deborah Consultants had the following balances before passing adjusting entries in the books on December 31, 2015. Cash$6,000Deborah, Withdrawals$3,000 Accounts Receivable2,000Service Revenue10,600 Office Supplies1,800Salaries Expense4,000 Equipment15,000Rent Expense800 Accumulated Depreciation— Depreciation Expense— Equipment9,000Equipment1,500 Deborah, Capital15,000Supplies Expense500 Prepare the adjusted trial balance after considering these adjustments: a. Office Supplies used, $800. Assume the office supplies were initially recorded as an.
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51) The following is the adjusted trial balance as of December 31, 2014 of Tuttle Photography: AccountDebitCredit Cash$1,700 Accounts Receivable8,500 Supplies100 Equipment7,500 Accumulated Depreciation—Equipment$2,000 Accounts Payable1,200 Salaries Payable800 Unearned Revenue600 Tuttle, Capital3,400 Tuttle, Withdrawals2,300 Service Revenue40,000 Salaries Expense24,000 Supplies Expense2,300 Depreciation Expense—Equipment1,600      Total$48,000$48,000 Provide the closing entry for Service Revenue. 52) The following is the adjusted trial balance as of December 31, 2014 of Tuttle Photography: AccountDebitCredit Cash$1,700 Accounts Receivable8,500 Supplies100 Equipment7,500 Accumulated Depreciation—Equipment$2,000 Accounts.
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27) A company that uses the perpetual inventory system sold goods to a customer on account for $2,000. The cost of the goods sold was $1,000. Which of the following journal entries correctly records this transaction? A) Cost of Goods Sold 2,000                Sales Revenue 2,000 B) Merchandise Inventory 2,000                Cost of Goods Sold 2,000 C) Accounts Receivable 2,000               .
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2) The net income calculated using both the single and multi-step formats of income statement is always the same. 3) Operating income is gross profit minus operating expenses. 4) A single-step income statement shows subtotals for gross profit and operating income. 5) In a multi-step income statement, interest revenue and interest expense are.
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