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48) The following is the adjusted trial balance as of December 31, 2015 of Martin Watch Inc.: Accounts Debit Credit Cash $ 18,000 Accounts Receivable 30,000 Prepaid Insurance 9,000 Office Supplies 3,200 Building 165,000 Accumulated Depreciation—Building $ 12,000 Equipment 88,000 Accumulated Depreciation—Equipment 8,500 Land 45,000 Accounts Payable 12,000 Salaries Payable 2,000 Unearned service revenue 25,000 Mortgage Payable 100,000 Common Stock 21,290 Dividends 25,840 Service Revenue 325,000 Salaries Expense 63,000 Depreciation Expense—Building and Equipment 6,250 Supplies Expense 15,000 Insurance Expense 14,500 Utilities Expense 23,000 _______ Total $505,790 $505,790 Provide the closing entry for expenses. 49) The following is the adjusted trial balance.
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11) The current ratio measures a company's ________. A) overall ability to pay liabilities B) ability to pay current liabilities with current assets C) proportion of assets that are financed by debt D) rate of cash flow 12) The following contains information from the records of the Wellborn Engineers and Architects. Wellborn Engineers and Architects Selected Financial.
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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) G-mart, a small-scale grocer, wants to introduce an inventory system to track its inventory. G-mart does not currently use optical scanning registers and computer systems. The perpetual inventory system.
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74) Luminous Electrical Inc. performed services costing $8,000 on January 24 and invoiced the customer. It received the $8,000 on January 31. Provide the journal entry on January 24 when services were rendered. (Ignore explanation.) 75) Luminous Electrical Inc. performed services costing $8,000 on January 24 and invoiced the customer. Luminous.
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Learning Objective 4-6 1) The current ratio is calculated using the values from the income statement. 2) The current ratio shows the profitability of a firm. 3) The smaller the current ratio, the higher is the ability of a firm to repay its current debts. 4) A current ratio that has increased from the.
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21) Refer to the following trial balance. Debit Credit 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 Common Stock 300,000 Retained Earnings 26,000 Dividends 3,000 Sales Revenues 480,000 Sales Returns and Allowances 6,000 Sales Discounts 9,000 Cost of Goods Sold 240,000 Salary Expense 15,000 Utility Expense 69,000 Rent Expense 54,000 Interest Expense 6,000 _______ Totals $834,000 $834,000 Prepare a multi-step income statement: 22) An adjusted trial balance of Woods Company for the year 2015 is given below. Prepare a single-step income statement for the.
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11) An income statement includes ________. A) Land and Salaries Payable B) Common Stock, Retained Earnings, and Dividends C) Furniture and Cash D) Service Revenue and 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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Learning Objective 5-6 1) The gross profit percentage measures the profitability of each sales dollar above the cost of goods sold. 2) A small increase in the gross profit percentage may indicate an important rise in income. 3) Which of the following is the correct formula for calculating gross profit percentage? A) Net profit.
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21) Michelin Jewelers uses the perpetual inventory system. On April 2, Michelin sold merchandise with a cost of $5,500 for $9,000 to a customer on account with terms of 3/15, n/30. The journal entry to record the cost of goods sold would be ________. A) Cost of Goods Sold 5,500        Accounts Receivable 5,500 B).
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3) Duncan Services Inc. records prepaid expenses as expenses when incurred, and unearned revenues as revenues when the payment is received in advance. At the end of the year, Duncan Services Inc. makes the necessary adjustments based on accrual basis accounting. On July 1, it paid rent for an office.
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Learning Objective 4-3 1) The adjusting process zeroes out all revenue accounts and all expense accounts. 2) The closing process helps in measuring each period's net income separately from all other periods. 3) Permanent accounts are not closed at the end of the accounting period. 4) As a part of the closing process, revenues.
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Learning Objective 4-7 1) Generally Accepted Accounting Principles (GAAP) require every organization to prepare reversing entries. 2) Reversing entries ease the burden of accounting for transactions in a later period. 3) Reversing entries are dated on the first day of the new accounting period. 4) A reversing entry is ________. A) a journal entry used.
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Learning Objective 5-4 1) The loss of inventory that occurs because of theft, damage, and errors is referred to as inventory shrinkage. 2) When a company uses the perpetual inventory system, there is no need to conduct a physical count of inventory. 3) The entry to close Sales Discounts will include a debit.
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Learning Objective 6-2 1) Ending inventory is calculated by multiplying the number of units on hand with the unit cost. 2) Ending inventory equals the cost of goods available for sale less beginning inventory. 3) Under the last-in, first-out (LIFO) method, the cost of goods sold is based on the oldest purchases. 4) When.
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9) The partial worksheet of Ruth Furniture is as follows: Ruth Furniture Worksheet December 31, 2014 Unadjusted Trial Adjusted Trial BalanceAdjustmentsBalance Account NamesDebit Credit  Debit Credit  Debit Credit Cash$6,500 Accounts Receivable2,000$3,000 Office Supplies1,800$500 Equipment15,000 Accumulated Depreciation—Equipment$8,7001,200 Common Stock15,000 Dividends3,000 Service Revenue10,6003,000 Salaries Expense4,000 Rent Expense2,000 Depreciation Expense— Equipment1,200 Supplies Expense____________500_____ Total$34,300$34,300$4,700$4,700 Calculate and enter the amounts for the Adjusted Trial Balance columns. Learning Objective 3-7 1) Avalon Event Planning Services Inc. records prepaid expenses and unearned revenues using.
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Learning Objective 4-2 1) The last two columns generally found on the right side of the worksheet are the income statement columns. 2) Net income is entered as the balancing amount on the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet. 3).
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11) Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet? A) Rent Revenue B) Insurance Expense C) Salaries Payable D) Equipment 12) Where does Net Income appear on a worksheet? A) Net income appears only in the income statement debit column. B) Net income appears in the balance sheet.
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11) Under the perpetual inventory system, purchase returns or allowances are debited to the Merchandise Inventory account by the purchaser. 12) Under the perpetual inventory system, when a purchaser makes payment within the discount period, the amount of discount will be credited to the Merchandise Inventory account. 13) Under the terms FOB.
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Learning Objective 3-6 1) A worksheet is an external document that forms a part of the financial statements. 2) The worksheet is NOT a journal, a ledger, or a financial statement. 3) GAAP requires a public company to prepare a worksheet for financial reporting purposes. 4) An internal document that helps summarize data for.
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51) The Accumulated Depreciation account is ________. A) a record of the sum of all the depreciation expense recorded B) the price quoted to the buyer of a used asset C) an expense account D) the expense account used to expense the cost of an asset 52) On January 1, 2015, the Accounts Receivable of.
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21) The Dividends account is a permanent account. 22) The Common Stock account is a permanent account. 23) The beginning balance in the Common Stock account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. During the year, the company declared and paid dividends for $4,000. The.
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45) Reid Art Supply Company uses a perpetual inventory system. The company had the following transactions during August, 2015: August 5: Purchased $2,900 of merchandise on account. Freight and credit terms were FOB shipping point, 3/15, n/60. August 9: Paid transportation costs of $440 for the Aug. 5 purchase. August 10: Returned $600.
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61) Saturn Inc. signed a one-year $48,000 note payable at 8% interest on May 1, 2014. If Saturn Inc. only adjusts its accounts once a year at year-end, how much interest expense was accrued on December 31, 2014? A) $1,280 B) $3,840 C) $2,560 D) $3,200 62) Accumulated Depreciation is a(n) ________ account and carries.
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11) The Office Supplies account is a temporary account. 12) The Office Supplies Expense account is a temporary account. 13) The Accounts Payable account is a temporary account. 14) The Salaries Payable account is a permanent account. 15) The Common Stock account is a temporary account. 16) The Accumulated Depreciation account is a permanent account. 17).
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41) Which of the following is a contra account? A) Depreciation Expense B) Accumulated Depreciation C) Unearned Revenue D) Earned Revenue 42) Accrued revenue is revenue that ________. A) has been collected and earned B) the business has collected in cash, but not yet earned C) the business has earned, but not yet collected in cash D) will be.
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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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42) A company purchased inventory for $2,200 on account, and recorded the following journal entry: Merchandise Inventory 2,200        Accounts payable 2,200 The vendor's invoice showed terms of 3/10, n/30. Give the journal entry for the payment of the invoice seventeen days after the invoice date. Answer:  43) A company purchased inventory for $100,000 on account,.
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21) Which of the following accounts would appear in the income statement debit column? A) Unearned service revenue B) Service Revenue C) Depreciation Expense D) Prepaid Insurance 22) The following is the adjusted trial balance from the worksheet for Tuttle Photography. Tuttle Photography Worksheet For the Year Ended December 31, 2015 AccountsDebitCredit Cash$ 15,000 Accounts Receivable30,000 Prepaid Insurance7,500 Office Supplies3,200 Building160,000 Accumulated Depreciation—Building$ 12,000 Equipment75,000 Accumulated Depreciation—Equipment8,500 Land40,000 Accounts.
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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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Learning Objective 4-1 1) In a 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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11) On a multi-step income statement, the operating expenses are subtracted from ________ to arrive at operating income. A) net sales B) cost of goods sold C) net profit D) gross profit 12) Merchandise Inventory and Cost of Goods Sold appear ________. A) on the balance sheet and statement of retained earnings, respectively B) on the statement.
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31) Which of the following account's balance is carried forward to the next accounting period? A) Accumulated Depreciation B) Depreciation Expense C) Dividends D) Sales Revenue 32) Which of the following is a permanent account? A) Wages Expense B) Salary Payable C) Service Revenue D) Utilities Expense 33) Which of the following accounts will be closed by debiting the Income.
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Learning Objective 4-4 1) GAAP requires publicly traded companies to prepare a post-closing trial balance and publish it in their annual report. 2) The post-closing trial balance shows the updated Retained Earnings balance. 3) The post-closing trial balance shows the net income for the period just ended. 4) Only permanent accounts appear on the.
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11) Which of the following accounts will be included in a post-closing trial balance? A) Dividends B) Salaries Expense C) Common Stock D) Office Supplies Expense 12) The adjusted trial balance of Michael's Shutterbug Photography at December 31, 2015 is as follows: AccountsDebitCredit Cash$ 15,000 Accounts Receivable30,000 Prepaid Insurance7,500 Supplies3,200 Building160,000 Accumulated Depreciation—Building$ 12,000 Equipment75,000 Accumulated Depreciation—Equipment8,500 Land40,000 Accounts Payable12,000 Salaries Payable2,000 Unearned Service Revenue25,000 Mortgage Payable100,000 Common Stock21,290 Dividends23,000 Service Revenue289,000 Salaries.
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Learning Objective 5-7 1) Under the periodic inventory system, purchases, purchase discounts, and purchase returns and allowances are recorded in the Merchandise Inventory account as and when they occur. 2) If a merchandiser uses the periodic inventory system, it is necessary to conduct a physical count of inventory to determine the quantity.
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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) Notes Payable due within two years are classified as ________. A) current liabilities B) current assets C) long-term liabilities D) long-term assets 24).
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3) Deborah Consultants had the following accounts and account balances after adjusting entries. Assume all accounts have normal balances. Calculate the amount of service revenue and prepare the adjusted trial balance for Deborah Consultants as of December 31, 2015. Cash$6,000Dividends$3,000 Accounts Receivable2,000Service Revenue? Office Supplies1,800Salaries Expense4,000 Equipment15,000Rent Expense800 Accumulated Depreciation—Depreciation Expense— Equipment9,000Equipment1,500 Common Stock15,000Supplies Expense500 4) Deborah Consultants.
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Learning Objective 5-3 1) An amount that a merchandiser earns by selling its inventory is known as Sales Revenue or Sales. 2) When a customer returns goods to the seller, the seller records it as purchase returns. 3) When a merchandiser records sales returns, the Accounts Receivable account is credited. The seller uses.
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11) An adjusted trial balance is given below. Debit Credit Cash $12,600 Accounts Receivable 2,400 Prepaid Rent 800 Merchandise Inventory 28,000 Accounts Payable $4,200 Salaries Payable 1,000 Notes Payable 800 Common Stock 10,000 Retained Earnings 3,800 Dividends 1,000 Sales Revenue 96,000 Sales Returns and Allowances 1,600 Sales Discounts 400 Cost of Goods Sold 25,000 Salaries Expense 21,000 Rent Expense 14,000 Selling Expense 8,500 Supplies Expense 500 ________ Total $115,800 $115,800 What will be the final balance in the corporation's Retained Earnings account after recording the closing entries? A) $27,800 B) $2,700 C) $14,000 D) $26,800 12) The sales.
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Learning Objective 5-5 1) Cost of Goods Sold appears on a multi-step income statement but not on a single-step income statement. 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.
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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) Best Value.
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