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Accounting MCQs_12 Feb




Question;1. One example of;a contra-asset is;A. Sales Discount;B. Sales Returns and Allowances;C. Uncollectible Accounts Expense;D. None of the above are contra assets;2. The journal entry to record a sales return;made by a customer would include;A. A debit to Accounts Receivable and a credit;to Sales Returns;B. A debit to Cash and Sales Returns;C. A debit to Sales Returns and a credit to;Accounts Receivable;D. A debit to Accounts Receivable and a credit;to Cash;3. Accounts receivable written off during the;year totaled $61,500 while the beginning and ending balance of Allowance for;Doubtful Accounts were $51,300 and $55,700, respectively. The amount of;uncollectible accounts expense for the period was;A. $57,100;B. $65,900;C. $61,500;D. Cannot be determined from the information;given;4. Cady, Inc., had beginning and ending;accounts receivable balances of $35,000 and 32,000, respectively. During the;period, $100,000 was collected from credit customers. What was the amount of;credit sales during the period?;A. $135,000;B. $132,000;C. $100,000;D. $97,000;5. In times of rising prices, ______ generally;result(s) in the ______ ending inventory.;A. LIFO and FIFO, same;B. LIFO, higher;C. FIFO, lower;D. LIFO, lower;6. Affiliated Industries purchased a piece of;equipment for $5,500, FOB shipping point. The company paid freight of $225 and;installation costs of $485. During installation, the equipment was damaged;requiring $195 in repair costs. The total cost assigned to the equipment should;be;A. $5,500;B. $5,725;C. $6,210;D. $6,405;7. Ivanhoe Enterprises acquired a piece of;equipment on January 3, 2007. The total cost of the equipment was $35,000.;Ivanhoe estimated that the equipment would be used for 8 years before being;sold for an estimated $7,000. Assuming the use of straight-line depreciation;the total depreciation expense for the year ended December 31, 2007 was;A. $3,500;B. $4,000;C. $4,375;D. $5,250;8. Brook side Enterprises acquired a piece of;machinery on January 3, 2006. The total cost of the machinery was $138,600.;Brook side estimated that the machinery would be used for 77,000 hours before;being sold for an estimated $3,850. Brook side uses the units-of-production;method of depreciation. Assuming the machine was used for 15,800 hours during;2006, 18,300 hours during 2007 and 17,400 hours during 2008, the balance in the;accumulated depreciation account on January 2, 2009 would be;A. $45,900;B. $48,475;C. $90,125;D. $92,700;9. Irmelas Enterprises owns some equipment;with an original cost of $84,700 and accumulated depreciation of $41,650. If;the equipment is sold for $9,500 in cash plus a 9-month $30,000 note receivable;with a stated 12% interest rate, the gain or loss recognized on the sale would;be;A. $3,550 loss;B. $3,550 gain;C. $2,150 loss;D. $2,150 gain;10. B&V Enterprises exchanged a used crane;with an original cost of $200,000 and accumulated depreciation of $140,000 for;a truck with a fair market value of $100,000. B&V also paid cash of;$25,000. What amount of gain should B&V report on this transaction?;A. $0;B. $15,000;C. $40,000;D. $100,000;11 ? 15 Record the following journal;entries.;10/1 Sold $5,000 of tables on account the;terms of payment are 1/15n30;10/5 Customer returned $1,000 of tables;10/14 Customer paid $3,000 of the balance due;on the account;10/30 Customer paid the remaining balance due;on the account;16 ? 20 Lorena Company purchased a van at a;total cost of $55,000. At the end of its useful life of 5 years, the van should;have a salvage value of $5,000. The van is expected to be driven 100,000 miles;over this time period as follows: year 1 25,000 miles, year 2 30,000 miles;year 3 20,000 miles, year 4 15,000 miles, and year 5 10,000 miles. Prepare a;schedule showing the depreciation expense and year-end carrying value of the;van for each of the next two years under each of the following methods of depreciation;? Straight Line;? Units-of-Production;? Double-declining-balance


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