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Study Resources (Accounting)

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 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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17) The trial balance of a merchandiser is as follows. A physical count of inventory at the end of the accounting year reveals $28,000 of inventory on hand. (Assume a perpetual inventory system) Debit Credit Cash $12,600 Accounts Receivable 2,400 Prepaid Rent 800 Merchandise Inventory 30,000 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 23,000 Salaries Expense 21,000 Rent.
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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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19) An adjusted trial balance of a merchandiser is given below. Debit Credit Cash $12,600 Accounts Receivable 2,400 Prepaid Rent 800 Merchandise Inventory 30,000 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 23,000 Salaries Expense 21,000 Rent Expense 14,000 Selling Expense 8,500 Supplies Expense 500 ________ Total $115,800 $115,800 Give journal entry to close the expense accounts and contra revenue accounts with a debit balance. 20) An adjusted trial balance.
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Learning Objective 7-1 1) Internal control is an organizational plan that ensures that the financial statements are prepared and submitted in time. 2) Sarbanes-Oxley Act requires all the private companies in the U.S. to maintain an internal control system. 3) The Public Company Accounting Oversight Board oversees the work of auditors of public.
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11) Which of the following inventory costing methods yields the highest net income during a period of rising inventory costs? A) specific identification B) weighted-average C) last-in, first-out D) first-in, first-out 12) Which of the following inventory costing methods yields the lowest net income during a period of rising inventory costs? A) specific identification B) weighted-average C) last-in,.
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11) Adams Inc. has the following account balances at the end of the current accounting period. Beginning inventory $ 75,000 Net purchases 415,000 Net sales revenue 500,000 The normal gross profit percent is 40%. What is the estimated ending inventory as determined by the gross profit method? A) $190,000 B) $415,000 C) $196,000 D) $490,000 12) The following data is available: Net sales $13,000 Normal.
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21) Harris Inc. had the following balances and transactions during 2015:   Beginning Merchandise Inventory as of January 1, 2015 100 units at $80 March 10 Sold 50 units June 10 Purchased 200 units at $82 October 30 Sold 150 units What would the Cost of Goods Sold be as reported on the income statement for the year ending December.
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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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15) Swan Song's adjusted trial balance as of December 31, 2014 is given below: Debit Credit Cash $ 12,000 Accounts Receivable 9,000 Prepaid Rent 6,000 Prepaid Insurance 2,300 Office Supplies 3,200 Building 52,200 Accumulated Depreciation—Building $11,500 Equipment 35,000 Accumulated Depreciation—Equipment 7,000 Land 40,000 Accounts Payable 6,550 Salaries Payable 4,000 Interest Payable 2,240 Mortgage Payable (long term) 51,200 Common Stock 10,000 Dividends 20,590 Service Revenue 190,000 Salaries Expense 43,000 Insurance Expense 5,000 Rent Expense 12,000 Utilities Expense 15,000 Advertising Expense 9,000 Depreciation Expense—Building 10,000 Depreciation Expense—Equipment 7,000 Office Supplies Expense 1,200 ________ Total $282,490 $282,490 Compute the current ratio. A) 2.07 B) 1.83 C) 1.64 D) 2.54 .
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52) The following is the adjusted trial balance as of December 31, 2014 of Tuttle Photography: Account Debit Credit Cash $1,700 Accounts Receivable 8,500 Supplies 100 Equipment 7,500 Accumulated Depreciation—Equipment $2,000 Accounts Payable 1,200 Salaries Payable 800 Unearned Revenue 600 Common Stock 3,400 Dividends 2,300 Service Revenue 40,000 Salaries Expense 24,000 Supplies Expense 2,300 Depreciation Expense—Equipment 1,600 ______ Total $48,000 $48,000 Provide the closing entry for expenses. .
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12) The adjusted trial balance of Michael's Shutterbug Photography at December 31, 2015 is as follows: AccountsDebitCredit Cash$ 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 Expense61,000 Depreciation Expense—Building and Equipment6,150 Supplies Expense14,040 Insurance Expense14,000 Utilities Expense20,900_______ Total$469,790$469,790 Using the information above, prepare a post-closing trial balance for Shutterbug Photography (dated December 31,.
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Learning Objective 6-8 1) The estimated ending merchandise inventory can be computed by subtracting cost of goods sold from the cost of goods available for sale. 2) Gross profit is calculated by dividing sales revenue by cost of goods sold. 3) The gross profit method is a way to estimate ending inventory on.
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47) 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 Service Revenue. .
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11) Under which of the following inventory costing methods is the ending inventory valued on the cost of the most recent purchases? A) specific identification B) weighted-average C) last-in, first-out D) first-in, first-out 12) Which of the following methods of inventory valuation requires the calculation of a new average cost after each purchase? A) specific identification B).
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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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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 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 .
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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. .
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Learning Objective 6-7 1) Using the first-in, first-out (FIFO) method of inventory valuation will always produce the same results whether a company uses perpetual or periodic inventory. 2) Using the last-in, first-out (LIFO) method of inventory valuation will always produce the same results whether a company uses perpetual or periodic inventory. 3) Under.
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16) Calculate the current ratio using the following information: Cash$5,000 Accounts Receivable1,400 Prepaid Rent900 Land20,000 Equipment4,000 Accumulated Depreciation800 Accounts Payable3,000 Salaries Payable800 Notes Payable—long term9,000 A) 1.92 B) 2.43 C) 1.55 D) 1.68 .
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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 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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41) WAXS-D, merchandisers of musical instruments, has provided the following details: Mar.5 Inventory purchased $800,000 Mar.8 Freight in 40,000 Mar.13 Purchase returns 60,000 Mar.14 Allowances by vendor 15,000 Mar.20 Payment made to vendor for purchases on March 5 ? Credit terms are: 3/20, n/45, FOB shipping. Calculate the net cost of inventory purchased assuming that there are no other inventory related transactions during the month. A) $785,000 B).
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50) The following is the adjusted trial balance as of December 31, 2015 of Current Times 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 Dividends. .
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49) The following is the adjusted trial balance as of December 31, 2015 of Current Times 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 the Income Summary account. .
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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 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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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: .
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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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51) The following is the adjusted trial balance as of December 31, 2014 of Tuttle Photography: Account Debit Credit Cash $1,700 Accounts Receivable 8,500 Supplies 100 Equipment 7,500 Accumulated Depreciation—Equipment $2,000 Accounts Payable 1,200 Salaries Payable 800 Unearned Revenue 600 Common Stock 3,400 Dividends 2,300 Service Revenue 40,000 Salaries Expense 24,000 Supplies Expense 2,300 Depreciation Expense—Equipment 1,600 ______ Total $48,000 $48,000 Provide the closing entry for Service Revenue. .
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31) A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $7,000 and paid $750 for the freight-in. The company sold the whole lot to a supermarket chain for $13,000 on account. The company uses the specific-identification method of inventory costing. Which of the following.
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Learning Objective 6-5 1) An overstatement of ending merchandise inventory in the current period results in an understatement of net income in the current period. 2) An overstatement of ending merchandise inventory in the current period results in an overstatement of net income in the current period. 3) An overstatement of ending merchandise.
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Learning Objective 6-4 1) If the historical cost of inventory is less than its current replacement cost, the business must write down the inventory cost. 2) If the current replacement cost of inventory is less than its historical cost, the business must adjust the inventory value. 3) For inventories, market value generally means.
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46) Refer to the following adjusted trial balance. Accounts Debit Credit Cash $1,700 Accounts Receivable 8,500 Office Supplies 100 Equipment 15,500 Accumulated Depreciation—Equipment $2,000 Accounts Payable 1,200 Salaries Payable 800 Unearned Revenue 600 Common Stock 3,400 Dividends 3,000 Service Revenue 50,000 Salaries Expense 25,000 Supplies Expense 2,400 Depreciation Expense—Equipment 1,800 ______ Total $58,000 $58,000 What will be the final ending balance in the Retained Earnings account after posting the closing entries? A) $17,800 B) $20,800 C) $24,200 D) $23,800 .
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Learning Objective 6-6 1) Inventory turnover measures the number of times a company sells its average level of merchandise inventory during a period. 2) The days' sales in inventory ratio is calculated by dividing cost of goods sold by the average merchandise inventory. 3) A high rate of inventory turnover indicates difficulty in.
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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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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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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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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 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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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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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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