· Web view2009/06/19 · 21. In the accounting cycle, the last step is _____. (Points: 4) preparing the financial statements journalizing and posting the adjusting entries preparing

Note

The correct options are marked with correct

1. Which of the following is not a step in providing accounting information to stakeholders? (Points: 4) design the accounting information system prepare accounting surveys identify stakeholders correct record economic data

2. The assets and liabilities of the company are $155,000 and $60,000 respectfully. Owner’s equity should equal _____. (Points: 4) $215,000 $155,000 $60,000 $95,000 correct

3. If total assets decreased by $47,000 during a period of time and owner's equity increased by $24,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities isDECREASE_______. (Points: 4) $23,000 increase $47,000 decrease $71,000 decrease correct $71,000 increase

4. The Kennedy Company sold land for $60,000 in cash. The land was originally purchased for $40,000, and at the time of the sale, $15,000 was still owed to First National Bank on that purchase. After the sale, The Kennedy Company paid off the loan to First National Bank. What is the effect of the sale and the payoff of the loan on the accounting equation? (Points: 4) assets increase $20,000; liabilities decrease $15,000; owner's equity increases $5,000 correct assets increase $5,000; liabilities decrease $15,000; owner's equity increases $20,000 assets increase $60,000; liabilities decrease $15,000; owner's equity increases $20,000 assets increase $20,000; liabilities decrease $15,000; owner's equity increases $35,000

5. Rivers Computer Makeover Company purchased $15,000 of Computer and Office Equipment. The company paid $3,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in six monthly installments. How will this transaction affect the accounting equation? (Points: 4)

Increase Assets (Computer and Office Equipment $15,000) and decrease Liabilities (Accounts Payable $15,000) Increase Total Assets by a net amount of $12,000 (increase Computer and Office Equipment $15,000 and decrease Cash $3,000) and increase Liabilities (Notes Payable $12,000) correct Increase Total Assets by a net amount of $15,000 (increase Computer and Office Equipment $12,000 and increase Cash $3,000) and decrease Liabilities (Accounts Payable $15,000) Increase Assets (Computer and Office Equipment $12,000) and increase Liabilities (Accounts Payable $12,000)

6. The asset section of the Balance Sheet normally presents assets in ________. (Points: 4) alphabetical order order of largest to smallest dollar amounts in the order what will be converted into cash correctno order

7. Which of the following applications of the rules of debit and credit is true? (Points: 4) decrease Prepaid Insurance with a credit and the normal balance is a credit increase Accounts Payable with a credit and the normal balance is a debit increase Supplies Expense with a debit and the normal balance is a debit correct decrease Cash with a debit and the normal balance is a credit

8. Randomly listed below are the steps in the accounting cycle: (1) prepare the financial statements (2) post the journal entries to the ledger (3) record journal entries (4) prepare a trial balance

What is the proper order of these steps?

(Points: 4) (3), (2), (4), (1) correct (2), (3), (4), (1) (3), (2), (1), (4) (4), (3), (2), (1)

9. Joe Brown invests $10,000 into his new business. How would the journal entry for this transaction be entered in the journal? (Points: 4) Cash 10,000 correct Brown, Capital 10,000 Invested cash in business

Cash &nbs p; 10,000 Brown, Capital 10,000 Invested cash in business

Brown, Capital 10,000 & nbsp; Cash 10,000 Invested cash in business

Brown, Capital 10,000 Cash &nbs p; 10,000 Invested cash in business

10. June 24 Land 15,000 Cash 15,000 Purchased land for business

What effects does this journal entry have on the accounts? (Points: 4) Increase to Cash and increase to Land Increase to Land and decrease to Cash correct Decrease to Cash and decrease to Land Increase to Cash and decrease to Land

11. June 26 Equipment 14,000 Cash 4,000 Notes Payable 10,000 ?????????

Which is the best explanation for this journal entry? (Points: 4) Purchased equipment, paid cash of $4,000, with the remainder to be paid in payments correct

Purchased equipment, paid cash of $4,000, with the remainder to be received in the future Purchased equipment, paid cash for the entire amount Purchased equipment on credit

12. An overpayment error was discovered in computing and paying the wages of a Bartson Repair Shop employee. When Bartson receives cash from the employee for the amount of the overpayment, which of the following entries will Bartson make? (Points: 4) Cash, debit; Wages Expense, credit correct Wages Payable, debit; Wages Expense, credit Wages Expense, debit, Cash, credit Cash, debit; Wages Payable, credit

13. The primary difference between deferred and accrued expenses is that deferred expenses have ________. (Points: 4) been incurred and accrued expenses have not not been incurred and accrued expenses have been incurred been recorded and accrued expenses have not been incurred not been recorded and accrued expenses have been incurred correct

14. The balance in the office supplies account on June 1 was $5,200, supplies purchased during June were $2,500, and the supplies on hand at June 30 were $2,000. The amount to be used for the appropriate adjusting entry is _________. (Points: 4) $4,500 $2,500 $9,700 $5,700 correct

15. A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Thursday is ________. (Points: 4) debit Salaries Payable, $16,000; credit Cash, $16,000 debit Salary Expense, $16,000; credit Drawing, $16,000 debit Salary Expense, $16,000; credit Salaries Payable, $16,000 correct debit Drawing, $16,000; credit Cash, $16,000

16. The supplies account has a balance of $1,000 at the beginning of the year and was debited during the year for $2,800, representing the total of supplies purchased during the year. If $750 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is ________. (Points: 4) $750 $3,550 $3,800 $3,050 correct

17. The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry.

Wages Expense 2,555

Wages Payable

2,555

????????????????

(Points: 4) Record the payment of wages Record wages to be paid this month correct Record wages paid in advance Record wages expense incurred and to be paid next month

18. How will the following adjusting journal entry affect the accounting equation?

Unearned Subscriptions 12,000

Subscriptions earned

12,000

(Points: 4) Increase assets, increase revenues Increase liabilities, increase revenues Decrease liabilities, increase revenues correct Decrease liabilities, decrease revenues

19. The balance in the supplies account, before adjustment at the end of the year is $625. The proper adjusting entry if the amount of supplies on hand at the end of the year is $325 would be ________. (Points: 4) debit Cash $325, credit Supplies $325 debit Supplies Expense $300, credit Supplies $300 correct debit Supplies Expense$325, credit Supplies $325 debit Supplies $300, credit Supplies Expense $300

20. When is the adjusted trial balance prepared? (Points: 4) Before adjusting journal entries are posted After adjusting journal entries are posted correct After the adjusting journal entries are journalized

Before the adjusting journal entries are journalized

21. In the accounting cycle, the last step is _________. (Points: 4) preparing the financial statements journalizing and posting the adjusting entries preparing a post-closing trial balance correct journalizing and posting the closing entries

22. During the end-of-period processing which of the following best describes the logical order of this process? (Points: 4) Preparation of adjustments, adjusted trial balance, financial statements correct Preparation of Income Statement, adjusted trial balance, Balance Sheet Preparation of adjusted trial balance, cross-referencing, journalizing Preparation of adjustments, adjusted trial balance, posting

23. Once the adjusting entries are posted, the Adjusted Trial Balance will prepared to ________. (Points: 4) verify that the debits and credits are in balance correct verify that all of the adjustments were posted in the correct accounts verify that the net income (loss) is correct for the period verify the correct flow of accounts into the financial statements

24. Accumulated Depreciation appears on the ________. (Points: 4) balance sheet in the current assets section balance sheet in the property, plant and equipment section correct balance sheet in the long-term liabilities section income statement as an operating expense

25. The following is the adjusted trial balance for Steely Company.

Steely Company

Adjusted Trial Balance

For the Year ended December 31, 2008

Cash 6,130

Accounts Receivable 2,300

Prepaid Expenses 750

Equipment 13,400

Accumulated Depreciation

1,200

Accounts Payable

1,700

Notes Payable

5,000

Bob Steely, Capital

12,000

Bob Steely, Withdrawals 870

Fees Earned

6,600

Wages Expense 1,450

Rent Expense 900

Utilities Expense 475

Depreciation Expense 150

Miscellaneous Expense 75

Totals 26,500 26,500

Determine the net income (loss) for the period. (Points: 4) Net Income 26,500 Net Loss 870 Net Loss 3,550 Net Income 3,550 correct

26. The owner’s equity is ________. (Points: 4) added to assets and the two are equal to liabilities added to liabilities and the two are equal to assets correctsubtract from liabilities and the net amount is equal to assets subtract from owner’s equity and the net amount is equal to net income

27. There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____. (Points: 4) Revenues, expenses, income summary, drawing account correctExpenses, assets, income summary, capital account Capital account, drawing account, income summary, assets Drawing account, income summary, expenses, revenues

28. The entry to close the appropriate insurance account at the end of the accounting period is _______. (Points: 4) debit Income Summary; credit Prepaid Insurance debit Prepaid Insurance; credit Income Summary

debit Insurance Expense; credit Income Summary debit Income Summary; credit Insurance Expense correct

29. Mantle Company Worksheet For the Year Ended December 31, 2008

Adjusted Trial Balance Income Statement Balance Sheet

Account Title Debit Credit Debit Credit Debit Credit

Cash 16,000

16,000

Accounts Receivable 6,000

6,000

Supplies 2,000

2,000

Equipment 19,000

19,000

Accumulated Depr-Equip

6,000

6,000

Accounts Payable

10,000

10,000

Wages Payable

2,000

2,000

L. Mantle, Capital

11,000

11,000

L. Mantle, Drawing 1,000

1,000

Fees Earned

47,000

47,000

Wages Expense 21,000

21,000

Rent Expense 6,000

6,000

Depreciation Expense 5,000

5,000

Totals 76,000 76,000 32,000 47,000 44,000 29,000

Net Income (Loss)

15,000

15,000

47,000 47,000 44,000 44,000

The journal entry to close revenues would be: _________. (Points: 4) debit Income Summary $47,000, credit Fees Earned $47,000 debit L. Mantle, Capital $47,000, credit Fees Earned $47,000 debit Fees Earned $47,000; credit Income Summary $47,000 correctcredit Fees Earned $47,000; credit L. Mantle, Capital $47,000

30. The following are steps to the accounting cycle. Of the following, which step should be done first? (Points: 4) Closing entries are journalized and posted to the ledger. Transactions are posted to the ledger. correctAdjusting entries are journalized and posted to the ledger. Financial statements are prepared.

31. The following are steps in the accounting cycle. Of the following, which would be prepared last? (Points: 4) An adjusted trial balance is prepared. correctTransactions are posted to the ledger. An unadjusted trial balance is prepared. Adjusting entries are journalized and posted to the ledger.

32. The accounting cycle requires three trial balances be done. In what order should they be prepared? (Points: 4) Post-closing, unadjusted, adjusted Unadjusted, post-closing, adjusted Unadjusted, adjusted, post-closing correctPost-closing, adjusted, unadjusted

33. The fiscal year selected by companies _________. (Points: 4) is the same as the calendar year

begins with the first day of the month and ends on the last day of the twelfth month correctmust always begin on January 1 will change each year

34. A fiscal year ________. (Points: 4) ordinarily begins on the first day of a month and ends on the last day of the following twelfth month correctfor a business is determined by the federal government always begins on January 1 and ends on December 31 of the same year should end at the height of the business's annual operating cycle

35. The natural business year _______. (Points: 4) is a fiscal year that ends when business activities are at its lowest point is a calendar year that ends when business activities are at its lowest point correctis a fiscal year that ends when business activities are at its highest point is a calendar year that ends when business activities are at its highest point

36. The term "inventory" indicates ________. (Points: 4) merchandise held for sale in the normal course of business materials in the process of production or held for production supplies both (a) and (b) correct

37. A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $4,000; Transportation-In, $450; Purchases, $12,000; Purchases Returns and Allowances, $2,300; Purchases Discounts, $220. The cost of merchandise purchased is equal to _______. (Points: 4) $13,930 $9,930 correct $9,489 $14,520

38. A company, using the periodic inventory system, has merchandise inventory costing $140 on hand at the beginning of the period. During the period, merchandise costing $400 is purchased. At year-end, merchandise inventory costing $180 is on hand. The cost of merchandise sold for the year is _______. (Points: 4) $720 $550 $360 correct

$140

39. A retailer purchases merchandise with a catalog list price of $10,000. The retailer receives a 25% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to the Merchandise Inventory account? (Points: 4) $7,500 correct $10,000 $9,800 $7,350

40. Merchandise with an invoice price of $4,000 is purchased on June 2 subject to terms of 2/10, n/30, FOB destination. Transportation costs paid by the seller totaled $150. What is the cost of the merchandise if paid on June 12, assuming the discount is taken? (Points: 4) $4,150 $4,070 correct $4,067 $3,920

41. Taking a physical count of inventory ________. (Points: 4) is not necessary when a periodic inventory system is used is a detective control correct has no internal control relevance is not necessary when a perpetual inventory system is used

42. Which of the following is not true about taking physical inventories? (Points: 4) Large variances may require investigations and implementation of corrective actions. Physical inventories are taken when inventory levels are at their lowest. correct Physical inventories deter employee thefts and inventory misuses. Physical inventories are taken when inventory levels are at their highest.

43. Inventory costing methods place primary emphasis on assumptions about _______. (Points: 4) flow of goods flow of costs flow of goods or costs depending on the method correct flow of values

44. The inventory data for an item for November are:

Nov. 1 Inventory 20 units at $20

4 Sold 10 units

10 Purchased 30 units at $21

17 Sold 20 units


Using the perpetual system, costing by the last-in, first-out method, what is the cost of the merchandise inventory of 30 units on November 30? (Points: 4) $640 $610 $620 $630 correct

45. The inventory data for an item for November are:

Nov. 1 Inventory 20 units at $20

4 Sold 10 units


17 Sold

20 units


Using the perpetual system, costing by the last-in, first-out method, what is the cost of the merchandise sold for November? (Points: 4) $640 $630 $620 correct $610

46. The Baby Company sells blankets for $30 each. The following was taken from the inventory records during July.

Date Product T Units Cost

July 3 Purchase 5 $15

July 10 Sale 3


July 20 Sale 6

July 23 Sale

3


Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of July 20 using the Lifo inventory cost method. (Points: 4) $98 $102 correct $120 $62




July 10 Sale 3


July 20 Sale 6

July 23 Sale 3


Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of July using the Fifo inventory cost method. (Points: 4) $132 $251 correct$200 $395




July 10 Sale 3


July 20 Sale 6

July 23 Sale 3


Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of July the Lifo inventory cost method. (Points: 4) $181 $274 $260 $247 correct

49. The following lots of a particular commodity were available for sale during the year:

Beginning inventory 10 units at $50

First purchase 25 units at $53

Second purchase 30 units at $54

Third purchase 15 units at $60

The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the first-in, first-out method? (Points: 4) $1,030 $1,140 $1,170 correct$1,060






The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the last-in, first-out method? (Points: 4) $1,230 correct$1,220 $1,240 $1,340






The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year according to the average cost method? (Points: 4) $1,300 correct

$1,305 $1,415 $1,236






The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year according to the lower of cost or market, using the first-in, first-out method, if the current replacement cost is $64 a unit? (Points: 4) $1,200 $1,230 $1,280 correct $1,370

53. If the cost of an item of inventory is $60 and the current replacement cost is $65, the amount included in inventory according to the lower of cost or market is ________. (Points: 4) $5 $60 correct $65 $125

54. If the estimated rate of gross profit is 40%, what is the estimated cost of the merchandise inventory on June 30, based on the following data?

June 1 Merchandise inventory $ 75,000

June 1-30 Purchases (net) 150,000

June 1-30 Sales (net) 135,000

(Points: 4) $144,000 correct $140,000 $ 81,000 $ 54,500

55. During times of rising prices, which of the following is not an accurate statement? (Points: 4)

Average costing will yield results that are between those of FIFO and LIFO LIFO will result in a higher cost of goods sold than FIFO FIFO will result in a higher net income than LIFO LIFO will result in higher income taxes than FIFO correct Optional Information: Tennessee

Already Tried: I am taking a 200 Question exam and these are the questions that I have two different answers for. Just want a double check to see if I am correct. thank you

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· Web view2009/06/19 · 21. In the accounting cycle, the last step is _____. (Points: 4) preparing the financial statements journalizing and posting the adjusting entries preparing