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DeVry NY BUSINESS 115 - Midterm problems

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Question;Multiple choice;When preparing a;bank reconciliation, which of the following items should be added to the book;balance?;EFT receipts;deposits in;transit;collection items;both EFT receipts and collection items;Which of the;following must be added to beginning Retained Earnings to compute ending;Retained Earnings?;net income;expenses;dividends;all of these;answers are correct;The use of the;FIFO method increases taxable income;when prices are;constant;when prices are;declining;when prices are increasing;under all;circumstances;A company;mistakenly destroys a unit of inventory that originally cost $12. The company;included the cost of the destroyed unit in cost of goods sold on the income;statement, rather than recognizing it as a loss. This action is justifiable;based on;the revenue;concept;accounting conservatism;the materiality;concept;none of the;above answers. All of them are incorrect, according to GAAP, a separate loss;must be recognized;When applying;the lower-of-cost-or-market rule, market value generally refers to;fifo cost using;the periodic method;lifo cost using;the periodic method;current sales;price of the inventory;current replacement cost;A company;performed services for a customer on account. This transaction increased assets;and _______.;decreased equity;increased;liabilities;increased;expenses;increased revenues;The two methods;of estimating uncollectible receivables are the;aging-of-receivables;method and direct write-off method;percent of sales method and the aging-of-receivables method;allowance method;and the direct write-off method;percent of sales;method and the direct write-off method;The use of the;allowance method of accounting for bad debts is preferred over the direct;write-off method because of the;matching principle;historical cost;principle;revenue;recognition principle;full disclosure;principle;For which form;of business ownership are the owners of a business legally distinct from the;business?;Corporation;Partnership;Proprietorship;all of the above;A written;promise to pay a specified amount of money at a particular future date is;called a(n);maturity note;promissory note;account;receivable;unearned revenue;If the interest;is $5,000 on a 6%, 60 day note, what is the principal?;$500,000;$300,000;$5,000,000;not enough;information to calculate;Which;characteristic will NOT be found in an effective system of internal control?;competent;reliable, and ethical personnel;a combination of duties;a separation of;duties;documents and;records;An accountant;recognizes the impact of a business event as it occurs and accounts for it;appropriately under which basis of accounting?;Cash;Prepaid;Accrual;Deferred;The;stable-monetary-unit concept of accounting;ensures that;accounting records and statements are based on the most reliable data available;holds that the;entity will remain in operation for the foreseeable future;maintains that;each organization or section of an organization stands apart from other;organizations and individuals;enables accountants to ignore the effect of inflation in;the accounting records;In a bank;reconciliation, a NSF check is;added to the;bank balance;added to the;book balance;deducted from the book balance;deducted from the bank balance;Essay;1.) Given the;following data, calculate the gross profit using the average-cost method, if;the selling price was $20 per unit.;Date;Item;Unit;1/1;Beginning;inventory;40 units at $12 per unit;3/5;Purchase of;inventory;18 units at $14 per unit;5/30, Purchase;of;inventory;24 units at $18 per unit;12/31, Ending;inventory;20 unites;2.) Eckle Ltd. has the following unadjusted Trial;Balance as of March 31, 2009;The following;data is available from Shantrice Meadows, Controller for Eckle Ltd.;a. Store Supplies used for the period were $1,225.;b. The Building has been depreciated for three years, this Fiscal year is year;4.;c. The Store Equipment has been depreciated for 5 years, this Fiscal year is;year 6.;d. Prepaid Rent is for six months purchased on January 1, 2009.;e. Forty percent of the Unearned Revenue has been earned.;f. There are 8 employees, each receiving a salary of $2,000 per week for a;five-day (Monday through Friday) week. FYE ends on a Tuesday.;Prepare the appropriate Adjusting Journal entries.;Make sure your;answer is in Journal Entry Form. List the Account Name and Debit or;Credit. Remember all Journal Entries should balance.;3.) John Smith;started a consulting business and completed the following transactions during;January 2007. Journalize the;transactions. Explanations are not;required.;1. John incorporated the business, Consulting;Inc., and invested $10,000 for common stock.;2. Paid $2,000 monthly rent for office space.;3. Purchased $3,000 of office equipment, paying;cash.;4. Purchased $500 of office supplies on account.;5. Recorded $1,000 of revenue, receiving cash.;6. Recorded $1,500 of revenue on account and;mailed invoices to the customers.;7. Paid utilities expense of $300.;8. Collected cash from a customer on account;$500.;Make sure your;answer is in Journal Entry Form. List;the Account Name and Debit or Credit.;Remember all Journal Entries should balance.

 

Paper#42806 | Written in 18-Jul-2015

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