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charter oak acc101 midterm exam

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Question;? The objectives of;financial reporting are to provide information Answer? Question;20 out of 6.29 points 2.;Investors and creditors are interested in the probability that their;original investment or loan will eventually be returned, and that they will;receive a reasonable return while their funds are invested or borrowed. These;expectations are collectively referred to as:Answer ? Question;36.29 out of 6.29 points 3.;The basic purpose of generally accepted accounting principles is to:Answer ? Question;46.29 out of 6.29 points 4.;The concept of adequate disclosure means that:Answer ? Question;50 out of 6.29 points 5.;Which of the following is correct if a company purchases equipment for;$70,000 cash?Answer ? Question;60 out of 6.29 points 6.;If a transaction causes an asset account to decrease, which of the;following related effects may occur?;Answer ? Question;70 out of 6.29 points 7.;If cash increases during a year, it must mean that: A) There was positive net income on the income;statement B) Retained earnings increased C);The net worth of a company increased. D) None of the three statements above must;necessarily be true.Answer ? Question;86.29 out of 6.29 points 8.;On June 27, Healthy Life Services, Inc. performed extensive tests on lab;specimens submitted by several customers and sent invoices totaling $5,200, due;in 30 days:Answer ? Question;96.29 out of 6.29 points 9.;Master Equipment has a $17,400 liability to Arrow Paint Co. When Master;Equipment makes a partial payment of $7,600 on this liability, which of;following is true about the journal entry made by Master to record this;transaction?Answer ? Question;106.29 out of 6.29 points 10.;On June 18, Baltic Arena paid $6,600 to Marvin Maintenance, Inc. for;cleaning the arena following a monster truck show held on June 9th. This;transaction: Answer ? Question;116.29 out of 6.29 points Use the following to answer;questions 11-13:Montauk Oil Co. reports these account balances at December;31, 2010 Accounts;Payable.................................................. $;110,000Accounts Receivable.............................................. 100,000Buildings................................................................ 240,000Capital;Stock.......................................................... 340,000Cash...................................................................... 80,000Equipment.............................................................. 160,000Land...................................................................... 200,000Notes;Payable........................................................ 260,000Retained;Earnings.................................................. 70,000On January 2, 2011, Montauk Oil collected $50,000 of its;accounts receivable and paid $20,000 on its accounts payable. 11. Refer to the above data. In a trial balance prepared at December;31,2010, the total of the debit column is: A) $1,540,000. B) $700,000. C) $1020,000. D) $780,000. Answer ? Question;126.29 out of 6.29 points Use the following to answer;questions 11-13:Montauk Oil Co. reports these account balances at December;31, 2010:Accounts;Payable.................................................. $;110,000Accounts;Receivable.............................................. 100,000Buildings................................................................ 240,000Capital;Stock.......................................................... 340,000Cash...................................................................... 80,000Equipment.............................................................. 160,000Land...................................................................... 200,000Notes;Payable........................................................ 260,000Retained Earnings.................................................. 70,000On January 2, 2011, Montauk Oil collected $50,000 of its;accounts receivable and paid $20,000 of its accounts payable. 12. Refer to the above data. In a trial balance prepared on January 3;2011, the total of the debit column is: A) $740,000. B) $1,570,000. C) $760,000. D) $370,000. Answer ? Question;136.29 out of 6.29 points Use the following to answer;questions 11-13:Montauk Oil Co. reports these account balances at December;31, 2010:Accounts;Payable.................................................. $;110,000Accounts;Receivable.............................................. 100,000Buildings................................................................ 240,000Capital;Stock.......................................................... 340,000Cash...................................................................... 80,000Equipment.............................................................. 160,000Land...................................................................... 200,000Notes;Payable........................................................ 260,000Retained Earnings.................................................. 70,000On January 2, 2011, Montauk Oil collected $50,000 of its;accounts receivable and paid $20,000 of its accounts payable. 13. Refer to the above data. On January 3, 2011, total liabilities are: A) $370,000. B) $350,000. C) $300,000. D) $70,000. Answer ? Question;140 out of 6.29 points 14.;The concept of materiality:Answer ? Question;156.286 out of 6.286 points 15.;As of January 31, Logan Company owes $600 to We-Rent-All for equipment;used during January. If no adjustment is;made for this item at January 31, how will Logan's financial statements be;affected?Answer ? Question;166.29 out of 6.29 points 16.;Rose Corp. has a note receivable from Jewel Co for $80,000. The note;matures in 5 years and bears interest of 6%. Rose is preparing financial;statements for the month of June. Rose should make an adjusting entry:Answer ? Question;176.286 out of 6.286 points Use the following to answer;questions 17-19:Rockville Company adjusts its accounts at the end of each;month. The following information has;been assembled in order to prepare the required adjusting entries at December;31:(1) A one-year bank loan of $360,000 at an annual interest;rate of 12% had been obtained on December 1.(2) The company's pays all employees up-to-date each;Friday. Since December 31 fell on;Tuesday, there was a liability to employees at December 31 for two day's pay;amounting to $5,900.(3) On December 1 rent on the office building had been paid;for four months. Monthly rent is $3,000.(4) Depreciation of office equipment is based on a lifetime;of six years. The balance in the Office;Equipment account is $7,200, no change has occurred in the account during the;year.(5) Fees of $7,600 were earned during the month for clients;who had paid in advance. 17. What amount of interest expense has accrued;on the bank loan? A) $2,400 B) $3,000. C) $3,600. D) $4,200. Answer ? Question;180 out of 6.29 points Use the following to answer;questions 17-19:Rockville Company adjusts its accounts at the end of each;month. The following information has been assembled in order to prepare the;required adjusting entries at December 31:(1) A one-year bank loan of $360,000 at an annual interest;rate of 12% had been obtained on December 1.(2) The company's pays all employees up-to-date each Friday.;Since December 31 fell on Tuesday, there was a liability to employees at;December 31 for two day's pay amounting to $5,900.(3) On December 1 rent on the office building had been paid;for four months. Monthly rent is $3,000.(4) Depreciation of office equipment is based on a lifetime;of six years. The balance in the Office Equipment account is $7,200, no change;has occurred in the account during the year.(5) Fees of $7,600 were earned during the month for clients;who had paid in advance. 18. By what amount;will the book value of the office equipment decline after the appropriate;December adjustment is recorded? A) $1,200. B) $0. C) $100. D) Some other amount.;Answer ? Question;190 out of 6.286 points Use the following to answer;questions 17-19:Rockville Company adjusts its accounts at the end of each;month. The following information has;been assembled in order to prepare the required adjusting entries at December;31:(1) A one-year bank loan of $360,000 at an annual interest;rate of 12% had been obtained on December 1.(2) The company's pays all employees up-to-date each;Friday. Since December 31 fell on;Tuesday, there was a liability to employees at December 31 for two day's pay;amounting to $5,900.(3) On December 1 rent on the office building had been paid;for four months. Monthly rent is $3,000.(4) Depreciation of office equipment is based on a lifetime;of six years. The balance in the Office;Equipment account is $7,200, no change has occurred in the account during the;year.(5) Fees of $7,600 were earned during the month for clients;who had paid in advance. 19. Failure to make the appropriate adjustment;to the Salary Expense account will result in: A) Understating net income for December by;$5,900. B) Understating net income for January by;$5,900. C) Overstating total liabilities at December;31. D) Overstating the balance in Cash at December;31. Answer ? Question;206.286 out of 6.286 points Use the following to answer questions 20-21:Shown below is a trial balance for Dependable, Inc., on;December 31, after the first year of operations, after adjusting entries: Trial Balance;Dependable, Inc.December 31, 2005Cash $ 6,200 Accounts receivable 5,100 Office equipment 9,000 Accumulated Depreciation;$ 2,400Accounts payable;3,100Capital Stock 9,000Retained earnings;-0-Dividends 3,000 Fees earned 18,200Salaries expense 6,400 Advertising expense 1,300 Depreciation expense 1,700;$32,700 $32,700 20. Refer to the above data. Net income for the period equals: Answer ? Question;210 out of 6.286 points 21. Refer to the above data. Retained earnings at December 31 equals,Answer ? Question;226.286 out of 6.286 points 22.;If current assets are $140,000 and current liabilities are $100,000, the;current ratio will be: A) 71%. B) $40,000. C) 1:4:1. D) $240,000Answer ? Question;236.286 out of 6.286 points 23.;If current assets are $90,000 and current liabilities are $30,000;working capital will be: A) 33.3%. B) 3:1. C) $60,000. D) $120,000.Answer ? Question;246.286 out of 6.286 points 24.;The following information is available:Sales............................................................ $300,000Net Income.................................................. $;15,000Retained Earnings......................................... $;30,000Avg. Stockholders? Equity............................. $100,000Dividends..................................................... $;5,000 What is;the return on equity? A) 5%. B) 20%. C) 25%. D) 15%. Answer ? Question;256.29 out of 6.29 points 25.;The cost of delivering merchandise to the customer is:Answer ? Question;266.286 out of 6.286 points 26.;Emily Products uses a perpetual inventory system. At year-end the;Inventory account had a balance of $257,000, but a complete year-end physical;inventory indicated goods on hand costing only $251,000. Emily should:Answer ? Question;270 out of 6.286 points 27.;At the beginning of the year, California Coat Co. had an inventory of;$100,000. During the year, the company purchased merchandise costing $650,000.;Net sales for the year totaled $1,000,000, and the gross profit rate was 45%.;The cost of goods sold and the ending inventory, respectively, were:Answer ? Question;286.286 out of 6.286 points 28.;At the beginning of 2005, Hudson Hardware has an inventory of $200,000.;Because sales growth was strong during 2004, the owner wants to increase;inventory on hand to $250,000 at December 31, 2005. If net sales for 2005 are;expected to be $1,000,000, and the gross profit rate is expected to be 35%;compute the cost of the merchandise the owner should expect to purchase during;2005. A);$600,000. B) $700,000. C) $900,000. D) Some other amount.Answer ? Question;290 out of 6.286 points 29.;If cost of goods sold is $240,000 and the gross profit rate is 40%, what;is the gross profit? A) $160,000 B) $560,000 C) $240,000 D) Some other amount.Answer ? Question;300 out of 6.286 points 30.;In order to achieve internal control over cash receipts:Answer ? Question;316.286 out of 6.286 points Use the following to answer;questions 31-32:The Cash account in the ledger of Novake, Inc. showed a;balance of $9,300 at June 30. The bank statement, however, showed a balance of;$11,700 at the same date. The only reconciling items consisted of a $2,100;deposit in transit, a bank service charge of $20, and a large number of;outstanding checks. 31. Refer to the above data. What is the "adjusted cash balance;at June 30? Answer ? Question;320 out of 6.286 points 32.;Refer to the above data. Upon;completion of the bank reconciliation, a journal entry will be required to;update the depositor's accounting records. This entry will include:Answer ? Question;330 out of 6.286 points 33.;Romeo Inc. had accounts receivable of $250,000 and an allowance for;doubtful accounts of $9,700 just before writing off as worthless an account;receivable from Juliet Company of $1,500. After writing off this receivable what;would be the balance in Romeo's Allowance for Doubtful Accounts?Answer ? Question;346.286 out of 6.286 points 34.;On January 1, Pierce Farms established a petty cash fund of $450, which;it replenishes at the end of each month. When a surprise count of the petty;cash fund is made on March 5, the petty cash box contains $80 in cash and;receipts for the following items:Delivery expense.......................................... $28Typewriter repairs........................................ 45Office supplies............................................. 26 This;situation indicates: A) Approximately $270 of petty cash has been;invested in cash equivalents. B) There were approximately $270 in cash;disbursements made from the petty cash fund for the first two months of the;year. C) The petty cash expense recognized for the;month of March is approximately $270. D) There is approximately $270 of petty cash;that is missing and unaccounted for at March 5. Answer ? Question;356.286 out of 6.286 points 35.;Juliet Inc. had accounts receivable of $300,000 and an allowance for;doubtful accounts of $18,500 just before writing off as worthless an account;receivable from Arrow Company of $1,200. The net realizable values of the;accounts receivable before and after the write-off were: A);$281,500 before and $280,300 after. B) $281,500 before and $281,500 after. C) $300,000 before and $298,800 after. D) $318,500 before and $317,300 after.Answer;="msonormal">

 

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