Accounting Expert Answers & Study Resources : Page 157

13.4   Learning Objective 13-4 1) No entry was recorded to reinstate a bad debt when making a collection. The allowance method is being used. This error would cause: A) total assets to be overstated. B) total liabilities to be understated. C) net income to be understated. D) None of these are correct. 2) The journal entry.

41) The adjustment for accrued wages was not done; this would cause: A) liabilities to be overstated. B) liabilities to be understated. C) expenses to be overstated. D) net income to be understated. 42) When counting supplies, several boxes were missed. This would cause: A) Supplies to be overstated. B) Supplies Expense to be understated. C) Net Income.

21) Adjusting journal entries still need to be made after the worksheet; otherwise the account balances will not be correct. 22) The adjusting entry to record rental income that is earned would be a debit to Rental Income and a credit to Unearned Rent. 23) The entry to record the adjustment for.

12.1   Learning Objective 12-1 1) The income statement is prepared from the: A) Post-Closing Trial Balance. B) worksheet. C) general journal. D) statement of owner's equity. 2) To determine how much merchandise was returned from a company's customers, the company should review the: A) Purchases Returns and Allowances Account. B) Purchases Discount Account. C) Sales Returns and Allowances Account. D).

10.6   Learning Objective 10-6 1) Using the perpetual inventory system, the purchase of merchandise on account would include a: A) debit to Merchandise Inventory and a credit to Accounts Payable. B) debit to Accounts Payable and a credit to Merchandise Inventory. C) debit to Accounts Receivable and a credit to Sales. D) debit to Sales.

61) When the adjustment is made for depreciation, both the Depreciation Expense account and Accumulated Depreciation account are increased. 62) The amount of supplies used causes a decrease in Supplies and an increase in expense. 63) Unearned Revenue is a liability account used to record rent fees received in advance. 64) The amount.

11) The entry to close the Income Summary to Capital was omitted, there was a net income. This error would cause: A) the Capital account to be understated. B) net income to be overstated. C) net income to be understated. D) the Capital account to be overstated. 12) The entry to close the Withdrawals account.

41) Column 1 Column 2 Column 3 Column 4 Sales Returns and Allowances 42) Column 1 Column 2 Column 3 Column 4 Sales Discounts 43) Column 1 Column 2 Column 3 Column 4 Depreciation Expense 44) Prepare the closing entries from the following information on the PC Pros Company worksheet income statement columns. Income Statement DebitCredit Sales20 Sales Ret. and Allow.1 Income Summary56 Purchases14 Pur. Ret. and Allow.2 Insurance Expense3 Office Salaries Expense1 45) Prepare.

41) When the terms are F.O.B. shipping point, the buyer is responsible for the cost of shipping from the seller's shipping point to the purchaser's location but the title does not pass until it is delivered. 42) Purchases Discounts are not taken on freight costs. 43) The Purchases Returns and Allowances account.

21) Prepare the necessary general journal entry for June 25. ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ 22) Prepare the necessary general journal entry for June 28. ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ 23) Prepare the necessary general journal entry for June 30. ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for.

13.1   Learning Objective 13-1 1) Which of the following situations would more likely not result in bad debts? A) The company extends credit easily. B) The company has a strict credit policy. C) The company has a cash only policy. D) None of these answers are correct. 2) What type of account is an Allowance for.

31) Column 1 Column 2 Column 3 Purchases 32) Column 1 Column 2 Column 3 Purchase discounts 33) Column 1 Column 2 Column 3 Purchase returns and allowances 34) Column 1 Column 2 Column 3 Sales 35) Column 1 Column 2 Column 3 Sales returns and allowances .

16) When a year-end adjustment is made for estimated bad debts: A) net income is increased. B) liabilities increase. C) net assets increase. D) net assets decrease. 17) Sylvia's, Inc., decreases Allowance for Doubtful Accounts $700 at year-end. As a result: A) net assets decrease. B) net income is unchanged. C) net assets increase. D) net realizable value assets.

61) Discuss the purpose of a classified balance sheet. Include a description of the major balance sheet classifications including: current assets, plant and equipment, current liabilities, and long-term liabilities. 62) Determine the ending Capital amount of a business having: Beginning Capital amount of $30,000 Withdrawals of $ 1,500 Net sales of $150,000 Net purchases of.

11) 1 Fit City estimates it will collect $2,300 of the $2,425 owed by customers. The difference of $125 represents the: A) Gross Accounts Receivable. B) Allowance for Doubtful Accounts. C) Net Realizable Value. D) Value of the Current Unpaid Receivables. 12) After the accounts are adjusted and closed at the end of the year,.

13.2   Learning Objective 13-2 1) Gross Accounts Receivable is $10,000. Allowance for Doubtful Accounts has a credit balance of $200. Net sales for the year are $150,000. In the past, 2% of sales had proved uncollectible. What would be the adjusted balance of the Allowance account under the income statement approach? A).

11) The first entry to adjust Merchandise Inventory includes: A) a debit to Merchandise Inventory. B) a credit to Merchandise Inventory. C) a credit to Income Summary. D) None of these are correct. 12) The second entry to adjust Merchandise Inventory includes: A) a debit to Merchandise Inventory. B) a credit to Merchandise Inventory. C) a debit to.

12.3   Learning Objective 12-3 1) The post-closing trial balance contains: A) assets and liabilities. B) all accounts with balances. C) only permanent accounts. D) All of these answers are correct. 2) The post-closing trial balance is prepared from: A) the income statement columns on the worksheet. B) the balance sheet columns on the worksheet. C) the trial balance columns.

11) Indicate whether the following accounts are used in the periodic inventory method, perpetual inventory method, or both by placing an X on the respective line(s). Periodic       Perpetual a) Purchases_________________ b) Purchase Discount_________________ c) Sales_________________ d) Sales Discounts_________________ e) Cost of Goods Sold_________________ f) Merchandise Inventory_________________ g) Accounts Receivable_________________ h) Accounts Payable_________________ 12) Compare and contrast the controlling account Accounts Payable.

21) Use the following information to complete the partial worksheet for Rebecca's Company. Record the appropriate adjusting entries using the data below and extend the balances over to the adjusted trial balance columns. Merchandise inventory—ending$20 Store supplies on hand4 Depreciation on store equipment1 Accrued salaries2 22) Use the following information to complete the partial worksheet.

31) The adjustment for accrued salaries would be to: A) debit Salaries Expense; credit Cash. B) debit Salaries Payable; credit Salaries Expense. C) debit Salaries Expense; credit Salaries Payable. D) debit Salaries Payable; credit Cash. 32) The adjustment for unearned rent is recorded when: A) cash is received. B) rent is earned. C) revenue is received. D) closing entries.

21) A company uses the allowance method and has determined a customer's bill for $2,000 must be written off. The journal entry to record the write off is: A) Allowance for Doubtful Accounts $2,000 Bad Debt Expense $2,000 B) Allowance for Doubtful Accounts $2,000 Accounts Receivable $2,000 C) Accounts Receivable $2,000 Allowance for Doubtful Accounts $2,000 D) Bad Debt Expense $2,000 Allowance for Doubtful Accounts $2,000 22).

31) Column 1 Column 2 Column 3 Column 4 Merchandise Inventory 32) Column 1 Column 2 Column 3 Column 4 Prepaid Insurance 33) Column 1 Column 2 Column 3 Column 4 Equipment 34) Column 1 Column 2 Column 3 Column 4 Accumulated Depr. Equip. 35) Column 1 Column 2 Column 3 Column 4 Wages Payable 36) Column 1 Column 2 Column 3 Column 4 Wages Expense 37) Column 1 Column 2 Column 3 Column 4 Purchases 38) Column 1 Column 2 Column 3 Column 4 Purchases Discounts 39) Column 1 Column.

26) Sales Column 1 Column 2 Column 3 27) Column 1 Column 2 Column 3 Merchandise Inventory 28) Column 1 Column 2 Column 3 Purchases Discounts 29) Column 1 Column 2 Column 3 Store Rent Expense 30) Column 1 Column 2 Column 3 Purchases Returns and Allowances 31) Column 1 Column 2 Column 3 Owner's Capital .

11) Which inventory appears in the balance sheet column of the worksheet? A) Ending inventory B) Beginning inventory C) Combination of beginning and ending inventories D) Inventory does not appear on the balance sheet. 12) The adjusted trial balance on the worksheet: A) contains balances from the permanent accounts. B) contains balances from the temporary accounts. C) contains.

71) The beginning and ending inventories are combined to determine the balance sheet inventory amount. 72) The Freight-in account is a Cost of Goods Sold account. 73) Mortgage Payable is an expense account. 74) Mortgage Payable is found on the income statement. 75) Sales Discount is used when calculating Net Purchases. 76) Indicate the normal.

31) Plant and Equipment is usually listed: A) in alphabetical order. B) in order of liquidity. C) by how long they will last. D) dollar value. 32) The ending merchandise inventory was overstated. This error would cause: A) net income to be understated. B) assets to be understated. C) net income to be overstated. D) expense to be overstated. 33).

10.2   Learning Objective 10-2 1) On February 12, Clare purchased $400 of merchandise on account from Larsen's Accessories, terms 2/10, n/30. The goods were shipped F.O.B. destination. The freight charge was $40. The amount to be recorded in the Accounts Payable Subsidiary ledger is: A) $392. B) $408. C) $400. D) $440. 2) An entry to.

The Bixby Co. had the following transactions involving the purchase of merchandise. Prepare the necessary general journal entries. Any applicable freight costs are prepaid by the seller. The perpetual inventory method is in use. June 16Purchased merchandise having a price of $6,000 from the Shelby Manufacturing Co. on account with              .

12.2   Learning Objective 12-2 1) How is Income Summary closed if the company had a net loss? A) Credit Income Summary; debit Capital B) Debit Income Summary; credit Capital C) Debit Capital; credit Withdrawals D) Debit Withdrawals; credit Capital 2) How is Income Summary closed if the company had a net income? A) Debit Capital; credit Income.

10.4   Learning Objective 10-4 1) Jackson purchased $500 of goods and received credit terms of 2/10, n/30. How much did he pay if payment was made during the discount period? A) $450 B) $510 C) $500 D) $490 2) The entry to record a payment on a $600 account within the 2% discount period would include.

10) Returned merchandise paid for within the discount period for a Cash refund. This will be recorded with: A) a credit to a liability. B) a credit to an asset. C) a debit to a liability. D) a debit to an asset. 11) Heidi's Accessories bought 50 necklaces for $10 each on account. The invoice.

11.1   Learning Objective 11-1 1) What inventory method is used when the inventory balance is updated only at the end of the accounting period? A) Periodic B) Perpetual C) Net Income D) Cost of Goods Sold 2) A characteristic of a perpetual inventory method is: A) it keeps continual track of inventory. B) it records units on hand.

32) Prepare the adjusting journal entry of Bad Debts Expense from the following information using the income statement approach. Net Sales for the year$475,000 Balance in the allowance account900 credit Estimated percentage of sales uncollectible2% Estimated uncollectible accounts-aging$2,500 33) Prepare the adjusting journal entry for Bad Debts Expense from the following information using the balance.

10.7   Appendix 1) If the company uses special journals, all payments should be recorded on a: A) cash receipts journal. B) cash payments journal. C) purchases journal. D) sales journal. 2) Special journals are used to: A) minimize the amount of entries monthly to the general ledger. B) easily summarize like-kind transactions. C) reduce the number of entrie .

13.3   Learning Objective 13-3 1) If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible? A) Bad Debts Expense B) Accounts Receivable C) Accounts Payable D) Bad Debts Recovered 2) If the allowance method of accounting for uncollectible receivables is used,.

81) Why is beginning and ending inventory kept as two separate figures in the cost of goods sold section? 82) Prepare the general journal entry to record the adjustment for inventory: Beginning inventory$8,000 Ending inventory7,000 83) Camping is Fun purchased merchandise costing $2,000. Calculate the cost of goods sold under the following different situations: a).

36) Column 1 Column 2 Column 3 Sales discounts 37) Column 1 Column 2 Column 3 Depreciation expense 38) Column 1 Column 2 Column 3 .

51) The average time it takes to buy and sell merchandise and collect Accounts Receivable is the normal operating cycle for a business. 52) The Statement of Owner's Equity is the same for a service business as for a merchandise business. 53) When calculating Cost of Goods Sold on the Income Statement,.

37) Determine the amount of the adjustment for bad debts given: Bad debts are estimated to be 8% of sales Accounts receivable balance$ 370,000 Allowance for bad debts balance (debit)$900 Net Sales$200,000 $ ________ 38) Determine the amount of the adjustment for bad debts given: Bad debts are estimated to be 4% of sales Accounts receivable balance$ 600,000 Allowance.

21) Administrative Expenses include: A) Insurance Expense. B) Delivery Expense. C) Advertising Expense. D) None of the above are correct. 22) Other Income is used to: A) record payments from sales customers. B) record any revenue from activities other than sales. C) record all revenue. D) record owner investments. 23) Other Expense is used to record: A) selling expenses. B) administrative expenses. C).

41) In what category in a classified balance sheet is Mortgage Payable found? A) Plant and Equipment B) Current Liabilities C) Long-term Liabilities D) Both B and C are correct. 42) The left and right columns on the financial statements are used for debits and credits. 43) The amount for Cost of Goods Sold is found.

11.2   Learning Objective 11-2 1) When completing a worksheet: A) the ending inventory amount appears in the income statement debit column. B) the beginning inventory amount appears in the adjustment credit column. C) the ending inventory amount appears in the unadjusted trial balance debit column of the worksheet. D) the beginning inventory amount appears in.

Prepare the general journal entries to record the following transaction. All purchases are on account and subject to terms of 2/10, n/30. The perpetual inventory method is in use. May 5Purchased merchandise from the Anderson Inc. with a price of $15,000. May 9Returned $1,500 worth of merchandise to Anderson Inc. May 14Paid the.

26) Column 1 Column 2 Column 3 Prepaid subscription 27) Column 1 Column 2 Column 3 Unearned Rent Revenue 28) Column 1 Column 2 Column 3 Accumulated depreciation equip. 29) Column 1 Column 2 Column 3 Salaries payable 30) Column 1 Column 2 Column 3 Salaries expense .

12) If a recovery of a written-off account is made in the same year using the allowance method, the Bad Debts Recovered account would be used. 13) Carolina Sports uses the allowance method of accounting for uncollectible accounts. Record journal entries for the transactions listed below: March 1 Received $800 from Joe.

11) Freight-in is: A) a Cost of Selling Goods. B) a Cost of Purchasing Goods. C) recorded as an Operating Expense. D) recorded as an asset. 12) The calculation of Net Purchases does not include: A) Purchases Returns and Allowances. B) Purchases Discounts. C) Purchases. D) Freight-in. 13) Which of the following is not an operating expense? A) Payroll Tax Expense B).

10.5   Learning Objective 10-5 1) A list of creditors with balances owed is called: A) a schedule of accounts receivable. B) a schedule of accounts payable. C) a list of suppliers. D) a trade list. 2) Which account is the controlling account for the amounts owed to individual creditors? A) Accounts Payable in the general ledger B) Accounts.

21) Unearned Rent results because: A) no fee has been paid, but the service is complete. B) the fee is earned but not collected. C) the fee has been collected before the service has been provided. D) the fee has been paid, and the service is complete. 22) As the Unearned Rent is earned: A) the.

51) Gross profit less operating expenses equals: A) Cost of Goods Sold. B) net sales. C) net purchases. D) net income. 52) Interest Expense is: A) a cost of borrowing money. B) included in the "Other Expenses" on the income statement. C) has a normal debit balance. D) All of the above are correct. 53) Mortgage Payable: A) has a debit.