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Question;1.);Omega Company pays its employees twice a month, on the 7th;and the 21st. On June 21, Omega Company paid employee salaries of;$4,000. This transaction would;increase owner's;equity by $4,000.;be recorded by a;$4,000 debit to Salaries Payable and a $4,000 credit to Salaries Expense.;decrease the balance;in Salaries Expense by $4,000.;decrease net income;for the month by $4,000.;2.);On August 13, 2010, Merrill Enterprises purchased office equipment;for $1,000 and office supplies of $200 on account. Which of the following;journal entries is recorded correctly and in the standard format?;Office Equipment;1000;Account Payable;1,200;Office Supplies;200;Office Equipment;1,000;Office Supplies;200;Accounts Payable;1,200;Accounts Payable;1,200;Office Equipment;1,000;Office Supplies;200;Office Equipment;1,000;Office Supplies;200;Accounts Payable;1,200;3.);Adjusting entries are not necessary if the trial balance debit and;credit columns balances are equal.;True;False;4.);The book value of a depreciable asset is always equal to its;market value because depreciation is a valuation technique.;True;False;5.);The time period assumption is also referred to as the;cyclicity assumption.;calendar assumption.;periodicity;assumption.;fiscal assumption;6.);Adjusting entries can be classified as;accruals and;deferrals.;deferrals and;postponements.;accruals and advances.;postponements and;advances.;7.);Bee-In-The-Bonnet Company purchased office supplies costing $6,000;and debited Office Supplies for the full amount. At the end of the accounting;period, a physical count of office supplies revealed $2,400 still on hand. The;appropriate adjusting journal entry to be made at the end of the period would;be;Debit Office Supplies;$2,400, Credit Office Supplies Expense, $2,400.;Debit Office Supplies;Expense, $3,600, Credit Office Supplies, $3,600.;Debit Office Supplies;Expense, $2,400, Credit Office Supplies, $2,400.;Debit Office Supplies;$3,600, Credit Office Supplies Expense, $3,600.;8.);The balance in the Prepaid Rent account before adjustment at the;end of the year is $15,000, which represents three months' rent paid on;December1. The adjusting entry required on December 31 is to;debit Rent Expense;$5,000, credit Prepaid Rent, $5,000.;debit Rent Expense;$10,000, credit Prepaid Rent $10,000.;debit Prepaid Rent;$10,000, credit Rent Expense, $10,000.;debit Prepaid Rent;$5,000, credit Rent Expense, $5,000.;9.);The income statement and balance sheet columns of Reed Company's;worksheet reflect the following totals;Income Statement;Balance Sheet;Dr.;Cr.;Dr.;Cr.;Totals;$58,000;$48,000;$34,000;$44,000;The net income (or loss) for the period is;$48,000 income.;$10,000 income.;not determinable.;$10,000 loss.;10.) The income statement and;balance sheet columns of Reed Company's worksheet reflect the following totals;Income Statement;Balance Sheet;Dr.;Cr.;Dr.;Cr.;Totals;$58,000;$48,000;$34,000;$44,000;To enter the net income (or loss) for the period into the above worksheet;requires an entry to the;income statement debit;column and the income statement credit column.;income statement debit;column and the balance sheet credit column.;income statement;credit column and the balance sheet debit column.;balance sheet debit;column and the balance sheet credit column.;11.) The income statement for;the month of June, 2010 of Ramirez Enterprises contains the following;information;Revenues;$7,000;Expenses;Wages Expense;$2,000;Rent Expense;1,000;Supplies Expense;300;Advertising Expense;200;Insurance Expense;100;Total expenses;3,600;Net income;$3,400;The entry to close the revenue account includes a;credit to Income;Summary for $7,000.;debit to Income;Summary for $3,400.;credit to Income;Summary for $3,400.;debit to Income;Summary for $7,000.;12.) The income statement for;the month of June, 2010 of Ramirez Enterprises contains the following;information;Revenues;$7,000;Expenses;Wages Expense;$2,000;Rent Expense;1,000;Supplies Expense;300;Advertising Expense;200;Insurance Expense;100;Total expenses;3,600;Net income;$3,400;The entry to close the expense accounts includes a;debit to Wages Expense;for $2,000.;debit to Income;Summary for $3,400.;credit to Rent Expense;for $1,000.;credit to Income;Summary for $3,600.;13.) The income statement for;the month of June, 2010 of Ramirez Enterprises contains the following;information;Revenues;$7,000;Expenses;Wages Expense;$2,000;Rent Expense;1,000;Supplies Expense;300;Advertising Expense;200;Insurance Expense;100;Total expenses;3,600;Net income;$3,400;The entry to close Income Summary to Ramirez, Capital includes;a credit to Income;Summary for $3,400.;a credit to Ramirez;Capital for $3,400.;credits to Expenses;totalling $3,600.;a debit to Revenue for;$7,000.;14.) The income statement for;the year 2010 of Poole Co. contains the following information;Revenues;$70,000;Expenses;Wages Expense;$45,000;Rent Expense;12,000;Advertising Expense;6,000;Supplies Expense;6,000;Utilities Expense;2,500;Insurance Expense;2,000;Total expenses;73,500;Net income (loss);$(3,500);The entry to close the revenue account includes a;credit to Revenues for;$70,000.;credit to Income;Summary for $3,500.;debit to Revenues for;$70,000.;debit to Income;Summary for $3,500.;15.)The income statement for;the year 2010 of Poole Co. contains the following information;Revenues;$70,000;Expenses;Wages Expense;$45,000;Rent Expense;12,000;Advertising Expense;6,000;Supplies Expense;6,000;Utilities Expense;2,500;Insurance Expense;2,000;Total expenses;73,500;Net income (loss);$(3,500);The entry to close the expense accounts includes a;debit to Wages Expense;for $2,500.;credit to Income;Summary for $3,500.;debit to Income;Summary for $3,500.;debit to Income;Summary for $73,500.;16.) The income statement for;the year 2010 of Poole Co. contains the following information;Revenues;$70,000;Expenses;Wages Expense;$45,000;Rent Expense;12,000;Advertising Expense;6,000;Supplies Expense;6,000;Utilities Expense;2,500;Insurance Expense;2,000;Total expenses;73,500;Net income (loss);$(3,500);The entry to close Income Summary to Poole, Capital includes;a credit to Income;Summary for $3,500.;credits to Expenses;totalling $73,500.;a credit to Poole;Capital for $3,500.;a debit to Revenue for;$70,000.;17.) Geran Company purchased;merchandise inventory with an invoice price of $5,000 and credit terms of 2/10;n/30. What is the net cost of the goods if Geran Company pays within the;discount period?;$4,900;$4,600;$4,500;$5,000;18.) Reese Company purchased;merchandise with an invoice price of $2,000 and credit terms of 2/10, n/30.;Assuming a 360 day year, what is the implied annual interest rate inherent in;the credit terms?;24%;20%;36%;72%;19.) Rasner Co. returned;defective goods costing $3,000 to Markum Company on April 19, for credit. The;goods were purchased March 10, on credit, terms 3/10, n/30. The entry by Rasner;Co. on April 19, in receiving full credit is;Accounts Payable;3,000;Merchandise Inventory;3,000;Accounts Payable;3,000;Merchandise Inventory;90;Cash;2,910;Accounts Payable;3,000;Purchase Discounts;90;Merchandise Inventory;2,910;Accounts Payable;3,000;Merchandise Inventory;90;Cash;3,090;20.) Mather Company made a;purchase of merchandise on credit from Underwood Company on August 8, for;$9,000, terms 3/10, n/30. On August 17, Mather makes the appropriate payment to;Underwood. The entry on August 17 for Mather Company is;Accounts Payable;9,000;Merchandise Inventory;270;Cash;8,730;Accounts Payable;9,000;Purchase Returns and Allowances;270;Cash;8,730;Accounts Payable;9,000;Cash;9,000;Accounts Payable;8,730;Cash;8,730;21.) On November 2, 2010;Griffey Company has cash sales of $4,200 from merchandise having a cost of;$3,000. The entries to record the day's cash sales will include;a $4,200 credit to;Cash.;a $3,000 credit to;Cost of Goods Sold.;a $3,000 credit to;Merchandise Inventory.;a $4,200 debit to;Accounts Receivable.;22.) In a perpetual inventory;system, the Cost of Goods Sold account is used;only when a cash sale;of merchandise occurs.;only when a credit;sale of merchandise occurs.;whenever there is a;sale of merchandise or a return of merchandise sold.;only when a sale of;merchandise occurs.;23.) As a result of a;thorough physical inventory, Hastings Company determined that it had inventory;worth $270,000 at December 31, 2010. This count did not take into consideration;the following facts: Carlin Consignment store currently has goods worth $52,000;on its sales floor that belong to Hastings but are being sold on consignment by;Carlin. The selling price of these goods is $75,000. Hastings purchased $20,000;of goods that were shipped on December 27. FOB destination, that will be;received by Hastings on January 3. Determine the correct amount of inventory;that Hastings should report.;$290,000.;$345,000.;$322,000.;$342,000.;24.) Kershaw Bookstore had;500 units on hand at January 1, costing $18 each. Purchases and sales during;the month of January were as follows;Date;Purchases;Sales;Jan.;14;375 @ $28;17;250 @ $20;25;250 @ $22;29;250 @ $32;Kershaw does not maintain perpetual inventory records. According to a physical;count, 375 units were on hand at January 31.;The cost of the inventory at January 31, under the LIFO method is;$6,750.;$8,000.;$7,750.;$1,000.;25.) Ted's Used Cars uses the;specific identification method of costing inventory. During March, Ted;purchased three cars for $6,000, $7,500, and $9,750, respectively. During;March, two cars are sold for $9,000 each. Ted determines that at March 31, the;$9,750 car is still on hand. What is Ted's gross profit for March?;$5,250.;$4,500.;$750.;$8,250.;26.) The cost of goods;available for sale is allocated to the cost of goods sold and the;beginning inventory.;cost of goods;purchased.;gross profit.;ending inventory.;27.) Richmond's Wholesale;uses a sales journal. An entry in this journal represents a;debit to Cash, credit;to Sales.;debit to Sales;Discounts, credit to Cash.;debit to Accounts;Payable, credit to Sales Returns and Allowances.;debit to Accounts;Receivable, credit to Sales.;28.) The process of totaling;the columns of a journal is termed;footing.;sizing.;columnizing.;ruling.;29.) Which of the following;would not be an appropriate heading for a column in the cash receipts;journal?;Cash;Sales Discounts;Sales;Accounts Payable;30.) If a company uses a;multi-column purchases journal, which of the following possible headings for;debit columns of the journal would not be appropriate?;Store Supplies;Merchandise Inventory;Office Supplies;Accounts Payable;31.) Which of the following;statements is incorrect?;When an accounting;system is designed, no consideration needs to be given to the needs and;knowledge of the various users.;A major consideration;in developing an accounting system is cost effectiveness.;The accounting system;should be able to accommodate a variety of users and changing information;needs.;To be useful;information must be understandable, relevant, reliable, timely, and accurate.;32.) A highly automated;computerized system of accounting eliminates the need for internal control.;False;True;33.) In order to prevent a;transaction from being recorded more than once, a company should maintain only;one book of original entry.;True;False;34.) A $100 petty cash fund;has cash of $15 and receipts of $80. The journal entry to replenish the account;would include a credit to;Cash for $80.;Cash for $85.;Petty Cash for $85.;Cash Over and Short;for $5.;35.) A $100 petty cash fund;has cash of $18 and receipts of $86. The journal entry to replenish the account;would include a;credit to Petty Cash;for $86.;credit to Cash Over;and Short for $4.;credit to Cash for;$86.;debit to Cash for $86.;36.) A customer charges a;treadmill at Mike's Sport Shop. The price is $2,000 and the financing charge is;9% per annum if the bill is not paid in 30 days. The customer fails to pay the;bill within 30 days and a finance charge is added to the customer's account.;What is the amount of the finance charge?;$6;$60;$15;$180;37.) Wright sells softball;equipment. On November 14, they shipped $1,000 worth of softball uniforms to;Paola Middle School, terms 2/10, n/30. On November 21, they received an order;from Douglas High School for $600 worth of custom printed bats to be produced in;December. On November 30, Paola Middle School returned $100 of defective;merchandise. Wright has received no payments from either school as of month;end. What amount will be recognized as net accounts receivable on the balance;sheet as of November 30?;$900;$1,500;$1,600;$1,000;38.) An aging of a company's;accounts receivable indicates that $9,000 are estimated to be uncollectible. If;Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to;record bad debts for the period will require a;credit to Allowance;for Doubtful Accounts for $9,000.;debit to Bad Debts;Expense for $9,000.;debit to Bad Debts;Expense for $7,900.;debit to Allowance for;Doubtful Accounts for $7,900.;39.) During 2010, Hitchcock;Inc. had sales on account of $132,000, cash sales of $54,000, and collections;on account of $84,000. In addition, they collected $1,450 which had been;written off as uncollectible in 2009. As a result of these transactions, the;change in the accounts receivable balance indicates a;$48,000 increase.;$100,550 increase.;$46,550 increase.;$102,000 increase.;40.) Black Company provides;for bad debts expense at the rate of 2% of credit sales. The following data are;available for 2010;Allowance for doubtful;accounts, 1/1/10 (Cr.);$10,500;Accounts written off;as uncollectible during 2010;6,500;Credit sales in 2010;1,500,000;The Allowance for;Doubtful Accounts balance at December 31, 2010, should be;$30,000;$34,000;$25,000;$6,500;41.) From a liquidity;standpoint, it is more desirable for a company to have current;assets equal current;liabilities.;liabilities exceed;long-term liabilities.;liabilities exceed;current assets.;assets exceed current;liabilities.;42.) Admire County Bank;agrees to lend Givens Brick Company $200,000 on January 1. Givens Brick Company;signs a $200,000, 8%, 9-month note. The entry made by Givens Brick Company on;January 1 to record the proceeds and issuance of the note is;Interest Expense;12,000;Cash;188,000;Notes Payable;200,000;Cash;200,000;Interest Expense;12,000;Notes Payable;212,000;Cash;200,000;Notes Payable;200,000;Cash;200,000;Interest Expense;12,000;Notes Payable;200,000;Interest Payable;12,000;43.) Admire County Bank;agrees to lend Givens Brick Company $200,000 on January 1. Givens Brick Company;signs a $200,000, 8%, 9-month note. What is the adjusting entry required if;Givens Brick Company prepares financial statements on June 30?;Interest Expense;8,000;Interest Payable;8,000;Interest Expense;8,000;Cash;8,000;Interest Payable;8,000;Interest Expense;8,000;Interest Payable;8,000;Cash;8,000;44.) On October 1, Steve's;Carpet Service borrows $250,000 from First National Bank on a 3-month;$250,000, 8% note. What entry must Steve's Carpet Service make on December 31;before financial statements are prepared?;Interest Expense;5,000;Notes Payable;5,000;Interest Payable;5,000;Interest Expense;5,000;Interest Expense;5,000;Interest Payable;5,000;Interest Expense;20,000;Interest Payable;20,000;45.) The interest charged on;a $50,000 note payable, at the rate of 8%, on a 3-month note would be;$667.;$1,000.;$4,000.;$2,000.;46.) A company receives $174;of which $14 is for sales tax. The journal entry to record the sale would;include a;debit to Sales Tax;Expense for $14.;debit to Sales Tax;Payable for $14.;debit to Cash for;$174.;debit to Sales for;$174.

 

Paper#39226 | Written in 18-Jul-2015

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