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Study Resources (Accounting)

7.2-4Under the Sarbanes-Oxley Act, violators may be sentenced to prison for securities fraud.  7.2-5Which of the following is a requirement of the Sarbanes-Oxley Act?  A) The outside auditor must issue an internal control report for each public company. B) The Public Company Oversight Board must conduct audits of public companies. C) Accounting.
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9.2-44Charterhouse Services purchased a van on January 1, 2012, for $56,000.  It has an estimated life of 5 years, and an estimated salvage value of $6,000.  Dawson uses straight-line depreciation.  At the end of 2014, Charterhouse revised the estimated life of the asset from 5 years to 8 years.  How much.
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8.2-18The following information is from the 2013 records of Armadillo Camera Shop: Accounts receivable, December 31, 2013 $20,000 (debit) Allowance for uncollectible accounts, December 31, 2013 prior to adjustment 600 (debit) Net credit sales for 2013 95,000 Accounts written off as uncollectible during 2013 7,000 Cash sales during 2013 27,000 Uncollectible accounts expense is estimated by the aging-of-accounts-receivable method.  Management.
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7.6-3On a bank reconciliation, deposits in transit are subtracted on the book side of the reconciliation.  7.6-4If the bank reconciliation includes a bank service charge, a journal entry is required which debits Cash and credits Miscellaneous expense. 7.6-5If the bank reconciliation includes a deposit in transit, a journal entry is required.
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8.2-28At the beginning of 2014, Mark’s sales had the following ledger balances: Accounts receivable Allow for uncollectible accounts Uncollectible accounts expense 24,000 1,000 During the year there were $450,000 of credit sales, $460,000 of collections, and $3,700 of write-offs.  At                             the end of the year, Mark’s adjusted for uncollectible account expense using.
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8.5-1Interest revenue must be reported for a note receivable that is outstanding at the end of the accounting                                           period.  8.5-2The maturity value of a note is the sum of the principal plus interest due at maturity.  8.5-3A note is dishonored when the maker of the note fails.
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9.2-4Asset impairments occur when the asset’s value has a significant decline, outside of normal depreciation. 9.2-5Tangible assets must be tested for impairment at least once a year. 9.2-6An asset impairment will be reflected by an increase in the book value of an asset, as shown on the                                           balance sheet. 9.2-7When.
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8.5-31On October 1, 2012, Allen Jewelry Company accepted a 4- month, 10% note for $2,400 in settlement of                                           an overdue account receivable.  Interest revenue was accrued through December 31, 2012.  Allen receives                             the maturity value of the note (the original principle plus all of the.
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9.2-14Which of the following depreciation methods allocates an equal amount of depreciation to each year?  A) Units-of-production  B) Straight-line  C) Declining-balance  D) Double-declining-balance 9.2-15Which of the following depreciation methods allocates a fixed amount of depreciation to miles driven,                                           hours used, or some other measure of the asset’s.
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7.6-53Please refer to the following bank reconciliation: BANK BOOK Balance, June 30, 2013 $10,241.43   Balance, June 30, 2013 $9,745.06 ADD:   ADD: Deposit in transit 5,113.40   Note collected by bank 1,900.00   Interest revenue 75.00 LESS: Outstanding Check # 506 (1,948.52)   LESS: Outstanding Check # 510 (1,800.25)   NSF check (79.00)   Bank service charge (35.00) Adjusted balance, June 30, 2013 $11,606.06   Adjusted balance, June 30, 2013 $11,606.06.
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9.4-1Depletion expense is the portion of a natural resource's cost used up in a particular period.  9.4-2Accumulated depletion is a contra asset account.  9.4-3Depletion is the word we use instead of depreciation to attach to recovering the cost of natural resources. 9.4-5Which of the following is the expense resulting from a.
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7.3-7Which of the following statements about internal control is FALSE? A)    Internal auditors insure that employees follow company policies. B)     The treasurer is the officer ultimately responsible for writing of checks. C)     External auditors are employees of the company. D)    The control environment is known as the “tone at the top.” , Risk Analysis 7.3-8Internal and.
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7.3-17Which of the following describes the internal control procedure assignment of responsibilities?  A) To validate their accounting records, a company should have an audit by an external accountant.  B) The company should separate the custody of assets from accounting.  C) The external auditors will monitor internal controls.  D) Have clearly.
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9.2-54Pallmall Company has a truck which was purchased in prior years for $60,000.  At the end of 2013, there                                           is $30,000 of accumulated depreciation.  The value of the truck has been impaired, and its remaining                                           value is now estimated at $18,000.  Please provide the.
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8.3-21Zorro Company has significant amounts of accounts receivable, and experiences uncollectible accounts                                           from time to time.  Zorro uses the direct write-off method.  When Zorro Company writes off an                                                         uncollectible receivable, what is the effect of that single transaction? A)  It will reduce net income. B) .
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7.9-4The journal entry to open a new petty cash fund includes a debit to the petty cash account and a credit to                                           cash in bank.    7.9-5A key to strong control over petty cash is to ensure that several persons serve as custodian at one time. 7.9-6An.
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9.4-11A mine is purchased for $4,000,000.  There will be a salvage value of $300,000 when the land is restored                                           after mining is completed.  The mine has an estimated 250,000 tons of coal.  What is the depletable cost                                           per ton of coal? A)  $13.33 B)  $16.00 C)  $14.80 D) .
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9.3-20Which of the following items is included in the journal entry if a company sells equipment at a price                                           greater than its book value?  A) A credit to Gain on sale of equipment  B) A debit to Loss on sale of equipment  C) A credit to Accumulated.
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9.3-40Job Sales traded a truck they had owned for some time, in an even like-kind exchange for another truck.                                           The original truck had been purchased by Job for $36,000, and had accumulated depreciation of $30,000                                           at the time it was exchanged.  The truck Job.
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9.3-30Corey Sales sold its old office furniture for $400. The original cost was $8,000, and at the time of sale, it                                           had accumulated depreciation of $7,000.  What was the effect of the transaction? A)  Gain of $600 B)  Gain of $400 C)  Loss of $1,600 D)  Loss of $600 9.3-31Corey Sales sold.
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8.2-46On January 1, Wolfie’s Supply sold $222 worth of goods to customer Abe Smith on account.  Please                                           record the journal entry for the sales revenue. 8.2-47On January 1, Wolfie’s Supply sold $222 worth of goods to customer Abe Smith on account.  On                                           January 12, Wolfie’s.
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8.5-21On September 1, 2013, Adirondac Marine Supplies made a loan to one of its customers.  The customer                                           signed a 6- month note for $1,500 at 10%.  How much interest revenue did Adirondac earn over the life of                             the note? A)  $150 B)  $  75 C)  $  25 D)  $ .
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9.2-24On January 1, 2013, Zane Manufacturing Company purchased a machine for $40,000.  The company                                           expects to use the machine a total of 24,000 hours over the next 6 years.  The estimated sales price of the                                           machine at the end of 6 years is $4,000. .
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7.6-33In reconciling a bank statement, the bank balance is $1,800 and the checkbook balance is $1,205.  Which                                           of the following is the MOST probable reason why the bank balance is larger than the book balance? A)  There are outstanding checks. B)  The bank has deducted certain amounts for bank.
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7.9-14A petty cash fund was established with a $400 balance. It currently has cash of $10 and petty cash tickets                                           as shown below. Travel expense $120 Office supplies $200 Equipment rental expense $70 The journal entry to replenish the account would be which of the following: A)    Debit various expenses $390, credit.
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9.1-11Which of the following asset categories would include fencing?  A) Machinery and equipment  B) Land improvements  C) Buildings  D) Land  9.1-12Which of the following asset categories would include the cost of clearing land and removing unwanted                                           buildings? A) Land  B) Buildings  C) Land improvements  D) Machinery and.
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7.3-27In the following situation, which internal control procedure needs strengthening? Hofstra Services hired a new accounting manager.  He signed a contract for a new accounting information               system, but his position did not specify whether he was authorized to do so or not. A)    Assignment of responsibilities B)     Competent, reliable, and ethical personnel C)    .
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7.8-1Before signing a check, the controller or the treasurer should examine the purchase order, the invoice, and                             the receiving report to determine that the company received the goods and that the company is paying                                           only for the goods received.  7.8-2A receiving report should be matched.
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9.2-34An asset costs $80,000 and has a salvage value of $7,000.  It has a four-year life.  Using double-                                          declining-balance depreciation, Year 2 depreciation would be: A)  $15,000.00. B)  $15,437.50. C)  $20,000.00. D)  $18,250.00. 9.2-35A factory has a machine costing $76,000.  It has a 5-year life and an estimated capacity of 160,000 parts.               .
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7.8-11Which of the following statements describes a voucher? A)    It is an order to purchase goods from a supplier. B)     It is a statement from the supplier showing the goods purchased and the amount due. C)     It is a report showing that the goods have been received in good condition, as ordered. D)    It.
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8.6-14A company has Net sales of $1,700,000, Beginning net receivables of $240,000 and Ending net receivables of $180,000.  What is Days' sales in accounts receivable? (Please round to the nearest whole dollar.) A) 50 days  B) 48 days  C) 45 days  D) 41 days Calculation:  [$1,700,000/($240,000 + $180,000)/2] = approximately 8;.
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9.1-21Roberts Construction Company paid $40,000 for equipment with a market value of $45,000.  At which of                             the following amounts should the equipment be recorded?  A) $45,000  B) $40,000  C) $42,500  D) $ 5,000  9.1-22A company purchased a used machine for $80,000.  The machine required installation costs of $8,000.
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8.2-8Which of the following entries would be used to account for uncollectible receivables using the allowance                             method?  A) Allowance for uncollectible accounts is debited and Uncollectible accounts expense is credited.  B) Uncollectible accounts expense is debited and Allowance for uncollectible accounts is credited.  C) Uncollectible accounts expense is.
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8.6-4Days' sales in receivables is the ratio of average net accounts receivable to one day's sales.  8.6-5An acid test ratio of at least 1.0 is considered safe. 8.6-7The acid-test ratio is also known as the quick ratio. 8.6-8The ratio that indicates whether a company could pay all its current liabilities if they.
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9.3-36Job Sales sold a truck for $2,000 cash.  It was originally purchased for $36,000, and had accumulated                                           depreciation of $30,000 at the time of sale.  Please provide the journal entry for the sale of the truck. 9.3-37Job Sales sold a truck for $9,000 cash.  It was originally purchased.
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8.3-11Under the direct write-off method, a customer who doesn’t pay their bills is written off with what journal                                           entry? A)  Debit Accounts receivable and credit Uncollectible account expense B)  Debit Uncollectible account expense and credit Cash C)  Debit Uncollectible account expense and credit Accounts receivable D)  Debit Lost revenue and credit.
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7.6-23Which of the following items found on a bank reconciliation does NOT require an adjusting entry?  A) Interest earned  B) A bank service charge  C) A note collected by the bank  D) Deposits in transit  7.6-24Which of the following is TRUE about a bank reconciliation?  A) A bank reconciliation should.
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9.5-8On January 1, 2012, Portwell Company purchased a patent for $200,000.  They estimate a useful life of 4                                           years.  At the end of 2012, the Patent account will have a debit balance of $200,000, and there will be a                                           credit balance in the Accumulated.
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8.3-1The direct write-off method conforms to the matching principle better than the allowance method.  8.3-2A company uses the direct write-off method to account for uncollectible receivables.  Uncollectible                                           account expense will be estimated as a percentage of sales. 8.3-3The direct write-off method is used primarily by large, publicly owned.
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8.2-38At January 1, Davidson Services has the following balances: Allowance for Accounts receivable uncollectible accounts Uncollectible Accounts expense 9,000 800 0 During the year, Davidson has $104,000 of credit sales, collections of $100,000, and write-offs of $1,400. Davidson records Uncollectible accounts expense at the end of the year using the percent-of-sales method, and applies a rate of.
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8.1-11GAAP prefers companies to use the: A)  direct write-off method to evaluate bad debts. B)  allowance method to evaluate bad debts. C)  amortization method to evaluate bad debts. D)  360-day method to evaluate bad debts. 8.1-12Which of the following is NOT a key issue in controlling and managing receivables?  A) Separate cash-handling, credit, and accounting.
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8.1-1The two major types of receivables are accounts receivable and notes receivable.  8.1-2The creditor is the entity that signs a note.  8.1-3The two major types of receivables are interest receivable and taxes receivable.  8.1-4Notes receivable are usually longer in term than accounts receivable.  8.1-5Which of the following is a benefit.
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9.5-18Which of the following is the proper accounting treatment for research and development costs?  A) Research and development costs must be capitalized and amortized over 70 years or less.  B) Research and development costs must be capitalized and amortized over 20 years or less.  C) Research and development costs must.
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7.4-10Which of the following describes collusion? A)    When bogus websites acquire passwords and account numbers fraudulently B)     When two or more people cooperate together to defraud a company C)     When one employee steals from a company D)    When a company defrauds its suppliers by making false claims 7.5-1Cash is the most liquid of all company.
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7.6-43The following information is needed to reconcile the cash balance for Woods Paper Products. A deposit of $5,794.62 is in transit. Outstanding checks total $1,533.25. The book balance is $5,695.62. The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent. The bank balance at February 28,.
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8.6-24The days’ sales in receivables measures: A) how well a company can pay its current liabilities with its current assets. B)  how many days it takes, on average, to collect receivables. C)  how many days it takes, on average, to sell the inventory. D)  the number of times per year a company sells goods.
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