ACC 925 Study Guide - Final Guide: Current Liability, Contingent Liability, Financial Statement
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15 ACCOUNT QUESTIONS! I NEED HELP WITH ASAP! THANK YOU SOMUCH!
1. A company reported total stockholders' equity of $290,000 onits Dec 31, 2015, balance sheet. The following information isavailable for the year ended Dec 31, 2016:
Revenues | $620,000 |
Expenses | 330,000 |
Liabilities, on December 31, 2016 | 144,000 |
3. Samores Company sold merchandise on account for $3,000 toCookie Company with credit terms of 2/10, n/30. Five days later,Cookie Company returned $1,000 of merchandise that was damaged,along with a check to settle the account.
What entry does Samores Company make upon receipt of thecheck?
Select one:
A.
Cash | 1,960 | ||
Sales Returns and Allowances | 1,040 | ||
Accounts Receivable | 3,000 | ||
B.
Cash | 2,000 | ||
Accounts Receivable | 2,000 | ||
C.
Cash | 1,960 | ||
Sales Returns and Allowances | 1,000 | ||
Sales Discounts | 40 | ||
Accounts Receivable | 3,000 | ||
D.
Cash | 2,940 | ||
Sales Discounts | 60 | ||
Accounts Receivable | 3,000 | ||
What are the total assets of the company on December 31,2016?
Select one:
A. $420,000
B. $184,000
C. $724,000
D. $ 38,000
8. The following inventory was available for sale during theyear for Thomasina Tools:
Beginning inventory | 10 units at $80 |
First purchase | 15 units at $110 |
Second purchase | 30 units at $140 |
Third purchase | 20 units at $130 |
Thomasina Tools has 25 units on hand at the end of the year.
What is the dollar amount of inventory at the end of the yearaccording to the first-in, first-out method?
Select one:
A. $3,300
B. $3,150
C. $3,900
D. $5,950
9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:
Beginning inventory | 10 units at $41 |
First purchase | 15 units at $55 |
Second purchase | 30 units at $70 |
Third purchase | 25 units at $65 |
Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.
What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?
Select one:
A. $4,340
B. $9,920
C. $3,465
D. $6,200
12. Determine Sales revenue for Ozzie Company with the followingdata:
Cost of Goods Sold | $840,000 |
Operating Expenses | 210,000 |
Sales Discounts | 15,000 |
Sales Returns and Allowances | 97,500 |
Net Income | 265,000 |
Select one:
A. $1,192,500
B. $1,222,500
C. $1,417,500
D. $1,387,500
17. Determine Sales revenue for Ozzie Company with the followingdata:
Cost of Goods Sold | $840,000 |
Operating Expenses | 210,000 |
Sales Discounts | 15,000 |
Sales Returns and Allowances | 97,500 |
Net Income | 265,000 |
Select one:
A. $1,192,500
B. $1,222,500
C. $1,417,500
D. $1,387,500
18. M. Fields Company reported the following year-endamounts:
Total Sales | $33,600 |
Sales Discounts | 600 |
Sales Returns | ? |
Cost of Goods Sold | 21,000 |
Gross Profit | 4,350 |
What is the companyâs Sales Returns for the year?
Select one:
A. $ 7,650
B. $ 2,160
C. $10,860
D. $ 2,970
19. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:
Purchases During Sept 2016 | Sales During Sept 2016 | ||||
Sept 7 | 120 units @ $224 | Sept 12 | 70 units | ||
Sept 17 | 70 units @ $176 | Sept 22 | 110 units | ||
Sept 25 | 100 units @ $168 | Sept 29 | 90 units | ||
What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?
Select one:
A. $22,080
B. $26,480
C. $26,000
D. $28,640
24. On which financial statements would you look to find thetotal costs of merchandise that remains and the total that has beensold?
Select one:
A. Balance sheet and income statement
B. Statement of cash flows and balance sheet
C. Balance sheet and statement of cash flows
D. Statement of stockholders' equity and balance sheet
25. Which statement is true of the statement of stockholders'equity?
Select one:
A. It shows a company's stock issuances and dividends paid toshareholders.
B. It reports a company's assets, liabilities, and equities.
C. It reports a company's cash flows from operating activities,investing activities, and financing activities.
D. It reports a company's revenue and expenses for a period.
26. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:
Purchases During Sept 2016 | Sales During Sept 2016 | ||||
Sept 7 | 120 units @ $224 | Sept 12 | 70 units | ||
Sept 17 | 70 units @ $176 | Sept 22 | 110 units | ||
Sept 25 | 100 units @ $168 | Sept 29 | 90 units | ||
What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?
Select one:
A. $22,080
B. $26,480
C. $26,000
D. $28,640
27. The following hammers were available for sale during theyear for Waiculus Tools:
Beginning inventory | 10 units at $80 |
First purchase | 15 units at $100 |
Second purchase | 30 units at $120 |
Third purchase | 25 units at $130 |
Waiculus Tools has 30 hammers on hand at the end of theyear.
What is the dollar amount of cost of goods sold for the yearaccording to the first-in, first-out method?
Select one:
A. $3,150
B. $3,950
C. $5,300
D. $3,900
29. Nickster Company purchased $8,000 worth of merchandise, FOBshipping point. Transportation costs were an additional $700. Thecompany later returned $1,500 worth of merchandise and paid theinvoice within the 2% cash discount period.
The total amount paid for this merchandise is:
Select one:
A. $7,040
B. $8,526
C. $7,070
D. $7,056
30. The following amounts and costs of platters were availablefor sale by Utah Pottery during 2016:
Beginning inventory | 10 units at $82 |
First purchase | 15 units at $110 |
Second purchase | 30 units at $140 |
Third purchase | 25 units at $130 |
Utah Pottery has 35 platters on hand at the end of the year.
How much is cost of goods sold in dollars at the end of the yearaccording to the weighted-average cost method?
Select one:
A. $5,580
B. $3,465
C. $9,920
D. $3,720
31. Current assets are usually listed in the order of their:
Select one:
A. Lack of liquidity: least liquid to most liquid
B. Size: smallest to largest
C. Liquidity: most liquid to least liquid
D. Size: largest to smallest
34. Which of the following assets would not be classified as acurrent asset?
Select one:
A. Supplies
B. Equipment
C. Accounts receivable
D. Prepaid rent
Answers to the 30multiple choice questions | 2 points each, 30questions, for 60 point total | ||||||||||
60 points | |||||||||||
< please record | 1) | From an internal control standpoint, the asset mostsusceptible to improper diversion and use is | |||||||||
answer here | a. | prepaid insurance. | |||||||||
b. | cash. | ||||||||||
c. | Equipment | ||||||||||
d. | Investments | ||||||||||
2) | Jolene is warehouse custodian and alsomaintains the accounting record of the inventory held at thewarehouse. An assessment of this situation indicates | ||||||||||
a. | documentation procedures are violated. | ||||||||||
b. | independent internal verification is violated. | ||||||||||
c. | segregation of duties is violated. | ||||||||||
< please record | d. | establishment of responsibility is violated. | |||||||||
answer here | |||||||||||
3) | Internal control is defined, in part, as a planthat safeguards | ||||||||||
a. | all balance sheet accounts. | ||||||||||
b. | assets. | ||||||||||
c. | liabilities. | ||||||||||
d. | capital stock. | ||||||||||
4) | The control principle related to nothaving the same person authorize and pay for goods is known as | ||||||||||
a. | establishment of responsibility. | ||||||||||
b. | independent internal verification. | ||||||||||
< please record | c. | segregation of duties. | |||||||||
answer here | d. | rotation of duties. | |||||||||
5) | Two individuals at a retail store work thesame cash register. You evaluate this situation as | ||||||||||
a. | a violation of establishment of responsibility. | ||||||||||
b. | a violation of segregation of duties. | ||||||||||
c. | supporting the establishment of responsibility. | ||||||||||
< please record | d. | supporting internal independent verification. | |||||||||
answer here | |||||||||||
6) | Having different individuals receive cash,record cash receipts, and hold the cash is an example of | ||||||||||
a. | establishment of responsibility. | ||||||||||
b. | segregation of duties. | ||||||||||
c. | documentation procedures. | ||||||||||
d. | independent internal verification. | ||||||||||
7) | An adjusting entry is not required for | ||||||||||
a. | outstanding checks. | ||||||||||
b. | collection of a note by the bank. | ||||||||||
c. | NSF checks. | ||||||||||
d. | bank service charges. | ||||||||||
8) | If a check correctly written and paid bythe bank for $591 is incorrectly recorded on the company's booksfor $519, | ||||||||||
the appropriate treatment on the bankreconciliation would be to | |||||||||||
a. | deduct $72 from the book's balance. | ||||||||||
b. | add $72 to the book's balance. | ||||||||||
c. | deduct $72 from the bank's balance. | ||||||||||
d. | deduct $591 from the book's balance. | ||||||||||
9) | During 2013, Parker Enterprises generatedrevenues of $60,000. The company's expenses were as follows: | ||||||||||
cost of goods sold of $30,000, operatingexpenses of $12,000 and a loss on the sale of equipment of$2,000. | |||||||||||
Parker's gross profit is: | |||||||||||
a. | $16,000.00 | ||||||||||
b. | $18,000.00 | ||||||||||
c. | $30,000.00 | ||||||||||
d. | $60,000.00 | ||||||||||
10) | A primary difference between a periodicand perpetual inventory system is that a periodic system: | ||||||||||
a. | determines the inventory on hand only at the end ofthe accounting period. | ||||||||||
b. | provides better control over inventories. | ||||||||||
c. | records the cost of goods sold after each saletransaction. | ||||||||||
d. | keeps a record showing the merchandise inventory onhand at all times. | ||||||||||
11) | A decline in a company's gross profitcould be caused by all of the following except: | ||||||||||
a. | selling products using a lower markup. | ||||||||||
b. | clearance of discontinued inventory. | ||||||||||
c. | paying lower prices to its suppliers. | ||||||||||
d. | increasing competition resulting in a lower sellingprice. | ||||||||||
12) | South Company uses the perpetual inventorysystem. South's goods in transit at December 31 include: | ||||||||||
Sales made by South | Purchases made by South | ||||||||||
(1) FOB destination | (3) FOB destination | ||||||||||
(2) FOB shipping point | (4) FOB shipping point | ||||||||||
Which itemsshould be included in South's inventory at December 31? | |||||||||||
a. (2) and (3) | |||||||||||
b. (1) and (4) | |||||||||||
c. (1) and (3) | |||||||||||
d. (2) and (4) | |||||||||||
13) | In periods of rising prices, the inventorymethod which results in the greatest net income is the: | ||||||||||
a. | LIFO method. | ||||||||||
b. | FIFO method. | ||||||||||
c. | Weighted Average method. | ||||||||||
d. | Lower of Cost or Market method. | ||||||||||
14) | The following information was available for RawleyCompany at December 31, 2008: | ||||||||||
inventory (Jan .01) $80,000; inventory (Dec. 31)$120,000; cost of goods sold $600,000; | |||||||||||
accounts receivable $73,000; and sales$900,000. | |||||||||||
Rawley's inventory turnover in 2008 was: | |||||||||||
a. | 9.00 times. | ||||||||||
b. | 7.50 times. | ||||||||||
c. | 6.00 times. | ||||||||||
d. | 5.00 times. | ||||||||||
15) | A petty cash fund of $200 is replenishedwhen the fund contains $5 in cash and receipts for $193. | ||||||||||
The entry to replenish the fund would: | |||||||||||
a. | credit Cash Over and Short for $2. | ||||||||||
b. | credit Miscellaneous Revenue for $2. | ||||||||||
c. | debit Cash Over and Short for $2. | ||||||||||
d. | debit Miscellaneous Expense for $2. | ||||||||||
16) | An item is considered material if | ||||||||||
a. | it doesn't costs a lot of money. | ||||||||||
b. | it is of a tangible good intended for re-sale. | ||||||||||
c. | it is likely to influence the decision of aninvestor or creditor. | ||||||||||
d. | the cost of reporting the item is greater than itsbenefits. | ||||||||||
17) | Receivables might be sold to | ||||||||||
a. lengthen the cash-to-cash operating cycle. | |||||||||||
b take advantage of deep discounts on the cashrealizable value of receivables. | |||||||||||
c. generate cash quickly. | |||||||||||
d. finance companies at an amount greater than cashrealizable value. | |||||||||||
18) | If the amount of uncollectible accountexpense is understated at year end: | ||||||||||
a. | net income will be understated. | ||||||||||
b. | stockholders' equity will be understated. | ||||||||||
c. | allowance for doubtful accounts will be overstated. | ||||||||||
d. | net accounts receivable will be overstated. | ||||||||||
19) | A debit balance in the Allowance for DoubtfulAccounts | ||||||||||
a. | is the normal balance for that account. | ||||||||||
b. | indicates that actual bad debt write-offs haveexceeded previous provisions for bad debts. | ||||||||||
c. | indicates that actual bad debt write-offs have beenless than what was estimated. | ||||||||||
d. | cannot occur if the percentage of sales method ofestimating bad debts is used. | ||||||||||
20) | Bad Debts Expense is considered | ||||||||||
a. | an avoidable cost in doing business on a credit basis. | ||||||||||
b. | an internal control weakness. | ||||||||||
c. | a necessary risk of doing business on a credit basis. | ||||||||||
d. | avoidable unless there is a recession. | ||||||||||
21) | The best managed companies will have | ||||||||||
a. | no uncollectible accounts. | ||||||||||
b. | a very strict credit policy. | ||||||||||
c. | a very lenient credit policy. | ||||||||||
d. | some accounts that will prove to be uncollectible. | ||||||||||
22) | Two methods of accounting for uncollectibleaccounts are the | ||||||||||
a. | allowance method and the accrual method. | ||||||||||
b. | allowance method and the net realizable method. | ||||||||||
c. | direct write-off method and the accrual method. | ||||||||||
d. | direct write-off method and the allowance method. | ||||||||||
23) | When the allowance method of accountingfor uncollectible accounts is used, Bad Debts Expense isrecorded | ||||||||||
a. | in the year after the credit sale is made. | ||||||||||
b. | in the same year as the credit sale. | ||||||||||
c. | as each credit sale is made. | ||||||||||
d. | when an account is written off as uncollectible. | ||||||||||
24) | Allowance for Doubtful Accounts on the balancesheet | ||||||||||
a. | is offset against total current assets. | ||||||||||
b. | increases the cash realizable value of accountsreceivable. | ||||||||||
c. | appears under the heading "Other Assets." | ||||||||||
d. | is offset against accounts receivable. | ||||||||||
25) | In reviewing the accounts receivable, thecash realizable value is $14,000 before the write-off of a $1,500account. | ||||||||||
What is the cash realizable value after thewrite-off? | |||||||||||
a. | $1,500 | ||||||||||
b. | $12,500 | ||||||||||
c. | $14,000 | ||||||||||
d. | $15,500 | ||||||||||
26) | The maturity value of a $60,000, 10%, 60-day notereceivable dated July 3 is | ||||||||||
a. | $60,000 | ||||||||||
b. | $61,000 | ||||||||||
c. | $66,000 | ||||||||||
d. | $70,000 | ||||||||||
27) | The interest on a $10,000, 10%, 1-year notereceivable is | ||||||||||
a. | $1,000 | ||||||||||
b. | $10,000 | ||||||||||
c. | $10,100 | ||||||||||
d. | $11,000 | ||||||||||
28) | The maturity value of a $60,000, 8%, 3-month notereceivable is | ||||||||||
a. | $60,400 | ||||||||||
b. | $60,480 | ||||||||||
c. | $61,200 | ||||||||||
d. | $64,800 | ||||||||||
29) | Notes receivable are recorded in the accounts at | ||||||||||
a. | cash (net) realizable value. | ||||||||||
b. | face value. | ||||||||||
c. | gross realizable value. | ||||||||||
d. | maturity value. | ||||||||||
30) | Which of the following are also called tradereceivables? | ||||||||||
a. | Accounts receivable | ||||||||||
b. | Other receivables | ||||||||||
c. | Advances to employees | ||||||||||
d. | Income taxes refundable | ||||||||||