Accounting Expert Answers & Study Resources : Page 359

11) Which of the following is an example of hardware? A) monitor B) Microsoft Office C) ERP D) QuickBooks 12) Which of the following is an entry-level accounting software package? A) Microsoft Word B) QuickBooks C) Minitab D) router 13) An enterprise resource planning (ERP) system is a: A) hardware system that controls the access of employees to different levels of.

21) Which of the following is a requirement of the Sarbanes-Oxley Act? A) An 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) The accounting firm that audits a public client must also provide consulting services for.

11) Adams Consultancy 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.

11) External auditors evaluate company controls to ensure the financial statements are presented fairly in accordance with Generally Accepted Accounting Principles. 12) The Sarbanes-Oxley Act was passed by the Public Company Accounting Oversight Board. 13) Burglar alarms, fire alarms, and security cameras improve internal control. 14) Separating the custody of assets from accounting.

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,.

11) A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as: A) Real Time Gross Settlement. B) Electronic Data Interchange. C) Electronic Fund Transfer. D) Evaluated Receipts Settlement. 12) Which of the following statements describes a.

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.

  Learning Objective 8-1 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.

36) Which of the following will be recorded in the Other Accounts CR column of the cash receipts journal? A) cash sales B) receipt of interest revenue C) receipt of accounts receivable D) sales discounts 37) A CR.5 posting reference in a subsidiary ledger indicates that: A) the posting is transferred from the cash receipts journal,.

21) An accounting information system is said to be relevant if it: A) works smoothly with the business's employees and organizational structure. B) safeguards a business's assets and reduces the likelihood of fraud and errors. C) provides information that will improve decision making and reduce uncertainty. D) can accommodate changes in the business over.

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 physical count of inventory to determine the quantity of.

Learning Objective 8-4 1) Cash in the bank is more liquid than a petty cash fund. 2) Petty cash is a fund containing a small amount of cash that is used to pay for minor expenditures. 3) The journal entry to replenish a petty cash fund includes a debit to the Petty Cash.

21) Which of the following is true of posting entries from a purchases journal to the general ledger? A) The posting references are not mentioned in the subsidiary ledger. B) The Accounts Payable balance in the general ledger should be less than the sum of the individual vendor balances in the subsidiary.

31) Which of the following describes the internal control component "monitoring of controls?" A) Internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the accounting records are accurate. B) Monitoring of controls is the "tone at the top" of the business. C) Monitoring of controls.

53) The following information is needed to reconcile the cash balance for Fire Steel Inc. •A deposit of $5,800 is in transit. •Outstanding checks total $1,500. •The book balance is $6,800 at February 28, 2013. •The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent. •The bank balance at February.

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 inventory on the.

26) Multi Corporation sold merchandise for $4,450 to Susan on credit. The cost of goods sold was $1,185. Assuming that the firm is following a perpetual inventory system, it will record $4,450 in the: A) general journal. B) Accounts Receivable DR, Sales Revenue CR column of the sales journal. C) Merchandise Inventory DR.

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.

55) Refer to the following bank reconciliation:               Bank                           Book                 Balance, June 30, 2014$11,240.00Balance, June 30, 2014$10,200.00 Add:Add: Deposit in transit3,110.00Note collected by bank2,100.00 Interest revenue55.00 Less:Less: Outstanding checks #5061,200.00NSF check85.00 Outstanding checks #510900.00Bank service charge20.00 __________________ Adjusted balance, June 30, 2014$12,250.00Adjusted balance, June 30, 2014$12,250.00 Journalize the adjusting entry for the first reconciling item: note collected by bank. 56) Refer to the following.

Learning Objective 8-3 1) Before 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. 2) A receiving report should be matched with the.

11) One of the advantages of a computerized accounting information system, as compared to a manual one, is that it does not cost to ensure that the firm's data and information are secure. 12) In an accounting information system, outputs are the reports used for decision making, including the financial statements. 13).

31) A check for which a maker's bank account has inadequate money to pay the check is known as: A) a nonsufficient funds check. B) an outstanding check. C) a restrictive check. D) a canceled check. 32) The following information is available for Jack's Unlimited Company for the current month. Book balance end of the month $6,875 Outstanding.

57) Refer to the following bank reconciliation:             Bank                              Book               Balance, June 30, 2014$11,240.00Balance, June 30, 2014$10,200.00 Add:Add: Deposit in transit3,110.00Note collected by bank2,100.00 Interest revenue55.00 Less:Less: Outstanding checks #5061,200.00NSF check85.00 Outstanding checks #510900.00Bank service charge20.00 __________________ Adjusted balance, June 30, 2014$12,250.00Adjusted balance, June 30, 2014$12,250.00 Journalize the adjusting entry for the third reconciling item: NSF check. 58) Refer to the following bank.

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.

32) Henderson Sales purchased $6,000 of inventory on account. Provide the journal entry. (Assume a perpetual inventory system) 33) Clark Sales sold 450 units of product to a customer on account. The company uses the perpetual inventory system. The selling price was $28 per unit, and the cost, according to the.

21) When a check is issued, the party who is paying the cash is referred to as the: A) payee. B) maker. C) bank signatory. D) depositor. 22) Which of the following is a benefit of online banking to a business? A) The business can reconcile to the bank's balance at any time. B) The bank reconciliation.

11) A 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. 12) A company discovers that its cost of goods sold is understated by an insignificant amount. They do not need to correct.

21) Which of the following transactions is recorded in the "Receive Payments" function of QuickBooks? A) Paying electricity bill B) Sold merchandise inventory on account to a customer C) Sold a product to a customer for cash D) Coupon payments to the bondholders 22) Which of the following transactions is recorded in the "Enter Bills".

6) Generally, all transactions are recorded in a special journal as well as the general journal. 7) Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger. 8) After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in.

Learning Objective 8-2 1) A point-of-sale terminal provides control over cash receipts over the counter. 2) As a part of the internal control over cash receipts by mail, the mailroom sends both the customer checks and the remittance advices to the accounting department. 3) Regarding controls over cash receipts by mail, the bank.

Learning Objective 7-4 1) Hardware is electronic equipment that includes computers, monitors, printers, and the network that connects them. 2) Enterprise resource planning (ERP) systems are software systems that can integrate all of a company's functions, departments, and data into a single system. 3) One of the main disadvantages of a typical ERP.

Learning Objective 8-6 1) When calculating the cash ratio, the numerator includes cash equivalents. 2) A cash equivalent is a highly liquid investment that can be converted into cash in three years or less. 3) Having a cash ratio below 1 is a good thing. 4) Cash is a highly liquid asset, but cash.

  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.

11) If a bank reconciliation includes interest revenue, a journal entry is required which credits Cash and debits Interest Revenue. 12) In a bank reconciliation, a book error will be shown on the bank side of the reconciliation. 13) In a bank reconciliation, outstanding checks will be shown on the bank side.

11) The purchases journal is a special journal used to record: A) cash receipts, interest rate payments, and purchases. B) credit sales of assets that occur infrequently such as buildings, property, and equipment. C) credit sales. D) merchandise inventory, office supplies, and other assets purchased on account. 12) Which of the following is a column.

11) A petty cash fund was established with a $350 balance. It currently has cash of $41 and petty cash tickets totaling $309. Which of the following would be included in the entry to replenish the fund? A) a credit to Petty Cash for $309 B) a debit to Petty Cash for.

11) Better Buy has six CD players in inventory on December 31. The players were purchased in November for $150. The price lists from Better Buy's supplier indicate that the same CD player would now cost the company $155. What would be the amount reported as Ending Merchandise Inventory on.

16) A subsidiary ledger is: A) an accounting journal designed to record a specific type of transaction. B) a created list of the accounts used by a business entity to define each class of items for which cash is spent or received. C) a complete record of business transactions recorded in a ledger.

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.

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.

41) In the following situation, which internal control procedure needs strengthening? At Syria Services, the accounting clerk fills out unnumbered purchase order forms for purchases of supplies. An operations engineer completes the form with a detailed description of the supplies being ordered, and the operations manager approves the purchase and passes.

41) The bank statement reveals an EFT received from a customer that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation? A) an addition on the bank side B) a deduction on the bank side C) a deduction on the book side D) an addition.

31) Which of the following is an example of a storage device in an accounting information system? A) monitor B) network C) printer D) server 32) Which of the following is an input device in an accounting information system? A) keyboard B) internet protocol C) printer D) router 33) Which of the following is an output device in an accounting.

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).

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.

  Learning Objective 7-1 1) An accounting information system (AIS) collects, records, stores, and processes accounting data to produce information that is useful for decision makers. 2) The collection of time records is an Accounting Information System activity that is classified as a business transaction that involves the sale of merchandise inventory. 3) An.

Learning Objective 8-5 1) A demand deposit at a bank is the most liquid of all company assets. 2) The cash balance in a company's general ledger and the bank's balance on the bank statement will always be the same. 3) All items on the book side of the bank reconciliation require journal.

Learning Objective 6-3 1) In a period of rising costs, the first-in, first-out (FIFO) method results in lower cost of goods sold and higher gross profit than the last-in, first-out (LIFO) method. 2) In a period of rising costs, the last-in, first-out (LIFO) method results in lower cost of goods sold and.

Learning Objective 7-3 1) Cash purchases are recorded in the purchases journal. 2) The purchases journal is a special journal used to record all purchases of merchandise inventory, office supplies, and other assets on account. 3) When recording in a purchases journal with a periodic inventory system, the Merchandise Inventory DR column would.

21) Harris Company had the following balances and transactions during 2015: Beginning Merchandise Inventory 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 31, 2015 if the perpetual.