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5.6-2A small increase in the gross profit percentage could indicate: A)    a decrease in operating expenses. B)     a significant rise in net income. C)     lower inventory turnover. D)    a decrease in net income. 5.6-3Which of the following is the result of gross profit divided by net sales? A)                 Current ratio B)                 Gross profit percentage C)                 Debt ratio D)                 Rate.
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6.5-6Better Buy has six CD players in inventory on December 31.  The players were purchased in November                                           for $170.  Price lists from Better Buy's supplier indicate that the same CD player would now cost the                                           company $175.  The current sales price for each of.
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5.5-11Which of the following is subtracted from Sales revenue to arrive at Net sales revenue? A)                 Cost of goods available for sale B)                 Cost of goods sold C)                 Sales discounts and Sales returns and allowances D)                 Operating expenses 5.5-12In a multi-step income statement, Operating expenses are subtracted from Gross profit to compute: A)  Net loss. B)  Other.
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4.6-5The following is the balance sheet for Green Landscaping. Greene Landscaping Greene Landscaping Balance Sheet December 31, 2012 Assets Liabilities Cash $15,000 Accounts payable   $ 22,000 Accounts receivable 30,000 Salaries payable 12,000 Supplies 4,000 Unearned service         revenue        25,000 Prepaid insurance 8,000 Total liabilities 59,000 Equipment $85,000 Less: Accumulated      depreciation 10,000 75,000 Owner’s Equity Green, capital 73,000 Total liabilities and       owner’s equity $132,000 Total assets $132,000 Total liabilities and owner’s       equity $132,000 Which of the following is the debt ratio?  (Round to two decimal places.) A)   .39 .
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4.3-29Which is NOT an example of a temporary account? A)  Wages expense B)  Accumulated depreciation C)  Service revenue D)  Utilities expense 4.3-30Which 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  4.3-31Which of the following accounts will be closed.
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5.7-14Avery Supplies uses a periodic inventory system. Avery purchased $10,000 of inventory on account. The terms were 3/10, n/30. The purchase was made on February 1. Avery paid the shipper $250 cash for freight in. How should Avery properly record the freight in? A) Freight in 250     Cash 250 B) Accounts payable 250     Purchases 250.
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4.4-9The following is the adjusted trial balance for Tuttle Photography. AccountsDebitCredit Cash$15,000 Accounts receivable30,000 Prepaid insurance7,500 Office supplies3,200 Land40,000 Building160,000 Accumulated depreciation$12,000 Equipment75,000 Accumulated depreciation8,500 Accounts payable12,000 Salaries payable2,000 Unearned service revenue25,000 Mortgage payable100,000 R. Tuttle, capital21,290 R. Tuttle, drawing23,000 Service revenue289,000 Salaries expense61,000 Depreciation expense6,150 Supplies expense14,040 Insurance expense14,000 Utilities expense20,900 $469,790$469,790 Using the information above, prepare a post-closing trial balance for Tuttle                                                                       Photography (dated December 31, 2012.) .
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6.7-7Haley's Florist Shop has the following account balances at the end of the current accounting period. Beginning inventory $53,500 Net purchases 75,500 Net sales revenue 93,700 A normal gross profit percent is 30%.  What is the estimated ending inventory as determined by the gross profit method?  A) $100,890  B) $  28,110  C) $  63,410  D) $ .
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4.4-1The post-closing trial balance is an optional step. 4.4-2The post-closing trial balance shows the updated Capital balance. 4.4-3The post-closing trial balance shows the net income for the period just ended. 4.4-4Only permanent accounts appear on the post-closing trial balance. 4.4-5Only temporary accounts appear on the post-closing trial balance. 4.4-6The post-closing trial balance lists the accounts.
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6.3-50Henderson Sales purchased $500 of inventory on account.  Please provide the journal entry. 6.3-51Henderson Sales sold 400 units of product to a customer on account.   The selling price was $25 per unit,                                           and the cost, according to the company’s inventory records, was $12 per unit.  Please provide the.
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5.4-3If a physical count of inventory indicates that the Inventory account is overstated, an additional adjusting               entry is required. 5.4-4                                  The entry to close Cost of goods sold results in a debit to Income summary. 5.4-5A company uses the perpetual inventory system.  The inventory account balance is $50,000.  An actual              .
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4.6-27Please refer to the following information and compute the debt ratio: DebitCredit Cash$4,500 Accounts receivable1,200 Prepaid rent700 Land20,000 Equipment4,000 Accumulated depreciation $800 Accounts payable 2,900 Salary payable 600 Notes payable–long term 9,000 A)1.83 B)2.37 C)0.40 D)0.42 4.6-28Please refer to the following information and calculate the current ratio: DebitCredit Cash$6,000 Accounts receivable2,000 .
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7.1-1Internal control is the organizational plan and all the related measures adopted by an entity to safeguard                                           assets, encourage employees to follow company policy, promote operational efficiency, and ensure                                           accurate and reliable accounting records.  7.1-2Which of the following is TRUE of internal control?  A).
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5.2-19Which of the following is TRUE about freight in? A)                 Freight in is added to the cost of merchandise inventory. B)                 Freight in is a selling expense. C)                 Freight in is an operating expense. D)                 Freight in is deducted from Accounts payable. 5.2-20A company that uses the perpetual inventory method purchases inventory of $1,000 on.
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6.3-38Berring Sales uses LIFO.  The partially completed inventory record for January appears below. Purchases Cost of Goods Sold Inventory on Hand Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan 1 25 $4.00 $100       5 40 $4.25 $170      14      22 30 $3.80 $114      29 On January 14, the company sold 10 units.   On January 29, the company sold 50 units.   Complete the inventory record and calculate.
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5.2-29A company that uses the perpetual inventory method purchased inventory for $2,000 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid the shipper $100 cash for freight in.   The company paid the vendor 9 days after the sale.  Assuming this was the only.
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5-6.12Which of the following is used to determine the rate of inventory turnover? A)                 Cost of goods sold divided by Gross profit B)                 Cost of goods sold divided by Average inventory C)                 Cost of goods sold times Average inventory D)                 Cost of goods sold times Gross profit 5.6-13Alpha Company had $45,000 in beginning inventory and.
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5.8-1Baltic Supplies provides the worksheet shown below at the end of the year. A count of the physical inventory at year-end shows that there is actually $11,000 of inventory left.                                            Assuming this is the only adjusting entry needed at year-end, please post the inventory adjustment to the.
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6.1-11A company discovers that its Cost of goods sold is understated by an insignificant amount.  They do NOT                             need to correct the error because of the conservatism principle.  6.1-12A company discovers that its Cost of goods sold is understated by an insignificant amount.  They do not                            .
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5.5-1Cost of goods sold appears on both a multi-step income statement and a single-step income statement. 5.5-2Both purchase discounts and sales discounts appear on the income statement of a company that uses the               perpetual inventory method. AICPA Functional Competencies: Reporting 5.5-3Operating income is Gross profit minus Operating expenses. 5.5-4In a multi-step income statement,.
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5.3-6Net sales revenue is equal to Sales revenue less Cost of goods sold. 5.3-7Which of the following is GENERALLY a merchandiser’s major cost? A)  Salary expense B)  Buildings C)  Advertising D)  Cost of goods sold 5.3-8A company sold merchandise for $350 that cost $221.  The entry to record the cost of the merchandise                                          .
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5.4-17A company’s ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows                                           $19,000.  Please provide the adjusting entry needed to record the shrinkage. 5.4-18A trial balance is presented below.  The company uses the perpetual inventory system.  A physical               inventory reveals only $28,000.
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6.2-10Under which of the following inventory costing methods is ending inventory based on the cost of the                                           oldest purchases?  A) Specific-unit-cost  B) Average-cost  C) Last-In, First-Out  D) First-In, First-Out  6.2-11Under which of the following inventory costing methods is ending inventory based on the cost of the              .
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5.3-17On November 1, 2012, Everett Janitorial Supply sold merchandise for $5,000, FOB destination, 2/10,               n/30.  The merchandise cost $3,200.  Everett paid transportation costs of $100.  On November 6, 2012,               merchandise of $1,000 from the November 1 sale was returned.  The returned merchandise had cost $600.                Everett received.
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4.3-44The following is the adjusted trial balance for Tuttle Photography. AccountsDebitCredit Cash$15,000 Accounts receivable30,000 Prepaid insurance7,500 Office supplies3,200 Land40,000 Building160,000 Accumulated depreciation$12,000 Equipment75,000 Accumulated depreciation8,500 Accounts payable12,000 Salaries payable2,000 Unearned service revenue25,000 Mortgage payable100,000 R. Tuttle, capital21,290 R. Tuttle, drawing23,000 Service revenue289,000 Salaries expense61,000 Depreciation expense6,150 Supplies expense14,040 Insurance expense14,000 Utilities expense20,900 $469,790$469,790 Using the information from the worksheet above, prepare the closing entry for Revenues.     4.3-45The following is the adjusted.
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6.3-18Metro Computer Company had the following balances and transactions during 2014. Beginning inventory 100 units at $75 March 10 Sold 50 units June 10 Purchased 200 units at $80 October 30 Sold 150 units What would the Cost of goods sold be as reported on the income statement at December 31, 2014 if the perpetual average-costing.
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6.1-21Which of the following concepts states that a company must perform strictly proper accounting ONLY                                           for significant items?  A) Accounting conservatism  B) Materiality concept  C) Disclosure principle  D) Consistency principle  6.2-1Ending inventory equals the number of units on hand multiplied by the unit cost.  6.2-2Ending inventory equals.
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6.5-16Williams Company had the following balances and transactions during 2013. Beginning inventory 10 units at $70 June 10 Purchased 20 units at $80 December 30 Sold 15 units December 31 Replacement cost $78 What would the company's inventory amount be on the December 31, 2013 balance sheet if the perpetual                                           average-costing method is used?.
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4.7-7Charlton Cleaning Services pays out wages every week on Friday afternoon.   Payroll expense totals                                           $3,500 per week, based on a 5 day week.   The month of June ended on a Thursday.   On Thursday, June                                           30, Charlton made the following accrual adjustment: Wage expense2,800    .
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5.1-11What is the first step in the accounting cycle for a merchandising company? A)    The company sells inventory to customers, creating accounts receivable. B)     The company collects cash. C)     The company buys inventory. D)    The company delivers inventory to customers. 5.1-12Under a perpetual inventory system, which of the following would NOT be required? A)  Record cost.
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4.5-1Assets and liabilities are classified as either current or long-term to show their relative liquidity.  4.5-2Prepaid rent is usually a long-term asset.  4.5-3A debt due to be paid within one year (or operating cycle, if longer) is a current liability.  4.5-4A balance sheet prepared in the account form lists the.
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5.7-4A company uses the periodic inventory method.  Which of the following entries would be made to record               a $1,200 purchase of inventory on account? A)                 The accounting entry would be a $1,200 debit to Purchases and a $1,200 credit to Accounts payable. B)                 The accounting entry would be a $1,200 debit.
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5.4-21An adjusted trial balance is shown below. Debit Credit Cash $12,600 Accounts receivable 2,400 Prepaid rent 800 Inventory 30,000 Accounts payable $4,200 Salary payable 1,000 Notes payable 800 Capital 13,800 Drawing 1,000 Sales revenue 96,000 Sales returns and allowances 1,600 Sales discounts 400 Cost of goods sold 23,000 Salary expense 21,000 Rent expense 14,000 Depreciation expense 8,500 Supplies expense 500 Total $115,800 $115,800 Please provide the third closing entry. 5.4-22An adjusted.
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5.8-3Baltic Supplies provides the worksheet shown below at the end of the year: A count of the physical inventory at year end shows that there is actually $11,000 of inventory left.  In                             addition, there was $800 of accrued salary, and $200 of depreciation.  Please post the adjustments to.
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4.3-48The following is the adjusted trial balance for Tuttle Photography. AccountDebitCredit Cash$1,700 Accounts receivable8,500 Supplies100 Equipment7,500 Accumulated depreciation $2,000 Accounts payable 1,200 Salary payable 800 Unearned revenue 600 Capital 3,400 Drawing2,300 Service revenue 40,000 Salary expense24,000 Supplies expense2,300 Depreciation expense1,600  $48,000 $48,000                        Using.
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4.5-11Under which of the following categories would Accounts payable appear?  A) Current liabilities  B) Current assets  C) Long-term liabilities  D) Long-term assets  4.5-12Which of the following is NOT a long-term asset?  A) Equipment  B) Land  C) Buildings  D) Accounts receivable  4.5-13A two-year note payable would be classified as a: A) current.
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4.6-15Which of the following does the current ratio measure?  A) The company's overall ability to pay liabilities  B) The company's ability to pay current liabilities with current assets  C) The proportion of the company's assets that are financed with debt  D) The company’s rate of cash flow  4.6-16Which of the.
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5.4-13Sales revenues were $20,000, Sales Returns and allowances were $300, Sales discounts were $700,                                           Cost of goods sold were $12,000, and all other expenses totaled $4,500.  The second closing entry would                                           include which of the following line items? A)   Debit to Income summary of $17,500 B)  .
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6.3-7                                  Samson Company had the following balances and transactions during 2013. Beginning inventory 10 units at $70 March 10 Sold 8 units June 10 Purchased 20 units at $80 October 30 Sold 15 units What would the company's Cost of goods sold be on the December 31, 2013 income statement if the                                           perpetual First-In, First-Out costing.
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5.3-28Gross profit is equal to Sales revenue less Sales returns and allowances, and Sales discounts. 5.3-29Which of the following defines Net sales revnue? A)    Sales revenue less Sales returns and allowances, and Sales discounts B)     Sales revenue less Operating expenses C)     Sales revenue less Sales discounts D)    Sales revenue less Cost of goods sold 5.3-30Net sales.
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5.2-39Reid Art Supply Company uses a perpetual inventory system.  The company had the following transactions during August, 2012: Aug. 5Reid Company purchased $2,900 of merchandise on account.  Freight and credit terms were FOB shipping point, 3/15, n/60. Aug. 9Reid Company paid transportation costs of $440 for the Aug. 5 purchase. Aug. 10 Reid.
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5.1-1The periodic inventory system is normally used for relatively inexpensive goods. 5.1-2When a company uses the perpetual inventory method, the inventory account should stay current at                                           all times. 5.1-3The accounting cycle for a merchandising company begins with the purchase of inventory. 5.1-4The periodic inventory system keeps a running record of.
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6.1-1The consistency principle states that business should use the same accounting methods from period to                                           period.  6.1-2The lower-of-cost-or-market rule demonstrates accounting conservatism in action.  6.1-3A company reports that it uses the FIFO method of inventory costing.  This is an example of the                                           disclosure principle. 6.1-4A.
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6.6-5Ending inventory for the current accounting period is understated by $2,700. What effect will this error                                           have on Cost of goods sold and Net income? A) Cost of goods sold Net income Understated Understated B) Cost of goods sold Net income Overstated Overstated C) Cost of goods sold Net income Understated Overstated D) Cost of goods sold Net income Overstated Understated 6.6-6Ending inventory for.
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6.3-28Santa Fe Tile Company had the following inventory purchases and sales during the month of May.  The                                           company uses the periodic inventory method.  Purchases Sales Date Units Unit Cost Total Units Unit Price Total May 1 100 $4 $400         5 200 5 1,000        10 100 $10 $1,000        15 100 6 600        20 150 7 1,050        25 200 11 $2,200        30 160 8 1,280 710 $4,330 300 $3,200 If Santa Fe uses LIFO costing, how much was the Ending inventory balance? A)  $2.980 B)  $3,120 C) .
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5.2-9Freight out is an addition to the Inventory account if the company uses the perpetual inventory method. 5.2-10What is a purchase return? A)    A return of merchandise that is defective or damaged B)     A customer refund from the sale of inventory C)     A price reduction D)    A return of cash to the purchaser 5.2-11A purchase return.
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6.4-11Which of the following inventory costing methods yields the lowest ending inventory when costs are                                           rising during the accounting period?  A) Specific-unit-cost  B) Average-cost  C) Last-In, First-Out  D) First-In, First-Out  6.4-12Which inventory valuation model minimizes income tax when costs are rising? A)  First-In, First-Out B)  Last-In, First-Out C)  Average-cost D) .
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6.8-4When using periodic inventory, the closing process begins with closing out the Beginning inventory to                                           Cost of goods sold.  The second step is to set up the ending inventory by debiting Cost of goods sold                                           and crediting Inventory. 6.8-5Under periodic inventory, the company first calculates.
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4.5-21Below is a list of various balance sheet accounts and their balances. DebitCredit Notes payable–short term $800 Salary payable 3,600 Notes payable–long term 20,000 Accounts payable 2,200 Unearned revenue 1,000 Interest payable 2,200 What are the total long-term liabilities that would be shown on the balance sheet? A) $29,800 B) $ 9,000 C) $ 9,800 D).
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6.4-1In a period of rising costs, FIFO produces lower cost of goods sold and higher gross                                           profit than LIFO.  6.4-2Given the same purchase and sales data, the three major costing methods will result in three different                                           amounts for Cost of goods sold. 6.4-3Given the same.
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