Description of this paper

accounting mcq-Rules and concepts that govern the reporting of financial statements are called:

Description

solution


Question

Question;1. Rules and concepts that govern the reporting of financial;statements are called;a. Principles of Accounting;b. Generally Accepted Accounting Principles;c. Securities Exchange Commission;d. Accounting Assumptions;2. The private group that;currently has the authority to establish generally accepted accounting;principles in the United States is the;a. APB;b. IASB;c. SEC;d. FASB;3. The two primary external;users of the financial statements are: (Hint: consider appropriate synonyms.);a. IRS and owners;b. IRS and creditors;c. management and creditors;d. creditors and owners;4. An asset is best defined;as;a. residual interest of owners.;b. economic resource obtained as a result of past transactions.;Assets will be used to generate revenues.;c. something that has been used to generate revenues.;d. something owned.;5. Revenue is properly;recognized;a. When cash from a sale is received;b. When the customer's order is received.;c. Only if the transaction creates an account receivable.;d. Upon completion of the;sale or when services have been performed.;6. The Maxim Company;acquired a building for $500,000. Maxim had the building appraised, and found;that the building was easily worth $575,000. The seller had paid $300,000 for;the building 6 years ago. Which accounting principle would require Maxim to;record the building on its records at $500,000?;a. Monetary unit assumption.;b. Going-concern assumption.;c. Cost principle.;d. Business entity;assumption.;7. Which of the following;accounting concept prescribes when a company should record its expenses;incurred to generate the revenue reported?;a. Going-concern assumption.;b. Time period (periodicity) assumption;c. Matching (expense recognition) principle.;d. Business entity assumption.;8. If a company paid $38,000;of its accounts payable in cash, what was the effect on the assets;liabilities, and equity?;a. Assets would decrease $38,000, liabilities would decrease;$38,000, and equity would decrease $38,000.;b. Assets would decrease $38,000, liabilities would decrease;$38,000, and equity would increase $38,000.;c. Assets would decrease $38,000, liabilities would decrease;$38,000, and equity would not change.;d. There would be no effect;on the accounts because the accounts are affected by the same amount.;9. A credit entry;a. Increases asset and expense accounts, and decreases liability;equity, and revenue accounts.;b. Decreases asset and expense accounts, and increases liability;equity, and revenue accounts.;c. Is recorded on the left side of a T-account.;d. Is always an increase in;an account.;10. Of the following;accounts, the one that normally has a credit balance is;a. Cash.;b. Dividends.;c. Wages Payable.;d. Sales Salaries Expense.;Questions 11-35 relate to the ongoing business activities of;Zoogle Company?a newly formed company that provides dog-walking and pet-sitting;services for families in the city. As of January 1, 2014, the company employs;one person, who was given the title of ?general manager.? Note that some;questions pertain to a one month period and others a full year.;11. On January 1, 2014;Zoogle Corporation paid $3,000 cash to rent office space for the;period from January 1 to;June 30, 2014. Assuming that the appropriate adjusting journal entry is made on;January 31 for the rent events, what amount would Zoogle Corporation report for;rent expense for month ending January 31, 2014?;a. $ 0;b. $ 250;c. $ 500;d. $ 3,000;12. Zoogle recognizes;revenue according to the revenue principle. Friends of Zoogle?s general manager;are allowed to purchase services on account, whereas other customers are;required to pay for services in advance. During January 2014 Zoogle;1 - provided $600 of;services to friends on account and has collected one-half of those accounts (in;cash);2 ? received $200 cash in;advance from other customers and has provided $100 worth of services to these;other customers.;What amount of revenue;should Zoogle report for the month of January 2014?;a. $900;b. $800;c. $700;d. $500;13. Zoogle decided to start;selling pet supplies and purchased $10,000 of merchandise on April 15 with;terms of 3/10, n/45. On April 20, it returned $800 of that merchandise. On;April 24, it paid the balance owed for the merchandise taking any discount it;is entitled to. The cash paid on April 24 equals;a. $10,000;b. $9,800;c. $9,700;d. $8,924;14. If Zoogle had cash sales;of $94,275, credit sales of $83,450, sales returns and allowances of $1,700;and sales discounts of $3,475. Zoogle's net sales for this period equal;a. $172,550;b. $174,250;c. $176,025;d. $177,725;15. On April 1, Zoogle;Company sold merchandise in the amount of $5,800 to Rosser, with credit terms;of 2/10, n/30. The cost of the items sold is $4,000. Robinson uses the;perpetual inventory system. The journal entry or entries that Zoogle will make;on April 1 is;Questions #16 ? 19 are based on the following information;The following month Zoogle;starts selling and delivering bags of dry dog food to interested customers. On;May 1, 2014, Zoogle buys 40 bags at a cost of $20 per bag. Also, assume that;Zoogle purchases 30 bags on May 8 at a cost of $21 per bag, and 30 more bags on;May 18 at a cost of $22 per bag. 60 bags are sold during the last week of May.;16. Which of the following;represents the cost of goods sold under the FIFO cost method?;a. $1,220;b. $1,260;c. $1,290;d. $ 870;17. Which of the following represents the cost of goods sold under;the LIFO cost method?;a. $1,220;b. $1,260;c. $1,290;d. $ 800;18. In reference to #16 ?;17above, because of the effect of income taxes, which method will;provide a better cash;position?;a. LIFO;b. FIFO;c. All will provide the same cash position;d. Unable to determine;19. In reference to #16 ? 17 above, which method will provide a;higher net income?;a. LIFO;b. FIFO;c. All will provide the same cash position;d. Unable to determine;20. Generally accepted accounting principles require that the;inventory of Zoogle be reported at;a. Market value;b. Historical cost;c. Replacement cost;d. Lower of cost or market;21. The bank reconciliation;of Zoogle Corporation prepared for the month of February shows $20 of deposits;in transit, $176 of outstanding checks, $30 of interest earned, $15 for a;customer check returned as NSF, and no other reconciling items. If $175 is the;February 28 reconciled balance that is reported on the balance sheet, what must;have been the balance reported on the bank statement and the unadjusted balance;reported in the company?s books at February 28?;Bank Statement Balance;Unadjusted Book Balance;a. $160 $331;b. $190 $19;c. $ 19 $190;d. $331 $160;22. Zoogle has $90,000 in;outstanding accounts receivable and it uses the allowance method to account for;uncollectible accounts. Experience suggests that 6% of outstanding receivables;are uncollectible. The current balance in the allowance for doubtful accounts;before adjustments is a debit (negative) amount of $800. What will be the;adjusted amount reported for the Allowance for Doubtful Accounts and Bad Debts;Expense?;Allowance for Doubtful;Accounts Bad Debts Expense;a. 5400 5400;b. 5400 6200;c. 6200 6200;d. 6800 6800;23. Zoogle reports its Accounts Receivable at Net Realizable;Value, which is;a. Gross accounts receivable minus cost of goods sold.;b. Also known as net pretax income.;c. Also known as net after-tax income.;d. Gross accounts receivable;minus allowance for doubtful accounts.;24. On March 29, Zoogle Company concluded that a customer's $4,400;account receivable was uncollectible and that the account should be written;off. What effect will this write-off have on this company's net income and;total assets assuming the allowance method is used to account for bad debts?;a. Decrease in net income, no effect on total assets.;b. No effect on net income, no effect on total assets.;c. Decrease in net income, decrease in total assets.;d. No effect on net income;decrease in total assets.;25. On January 1, 2014, Zoogle Corporation purchased a pick-up;truck at a cost of $32,000 cash. Zoogle also had a liner and cap installed on;the pick-up box, at an additional cost of $1,000, which was charged on account.;Zoogle paid $800 for an insurance policy for the first year and anticipates;spending $1,200 for gas during the first year. What is the cost of the truck?;a. $32,000;b. $33,000;c. $33,800;d. $35,000;26. On June 1, 2014, Zoogle Corporation purchased another vehicle;at a cost of $27,000. The truck is estimated to have a useful life to Zoogle of;ten years and a resale value of $4,000 at the end of its life. How much;depreciation expense should be reported for this vehicle in the income;statement for the month of June 2014 assuming the straight-line is adopted?;a. $ 200;b. $ 192;c. $2400;d. $2300;27. At December 31, the;records of Zoogle reflected the following information;Revenue??????????.??????;$100,000;Expenses (excluding;depreciation)?. ????. 66,000;Depreciation expense;(straight-line) ????... 4,000;Depreciation expense (accelerated)??????.;7,000;Income tax;rate?????????????? 40%;To ?save cash,? Zoogle is;considering using an accelerated depreciation method for income tax reporting;in which case depreciation expense would be $7,000. Calculate how much cash;Zoogle would save by using an accelerated method for tax purposes rather than;the straight-line method of depreciation.;Note: You do NOTneed to compute depreciation, that;has been provided for you.;a. $3,000;b. $1,800;c. $1,200;d. $ 0;28. Zoogle owned other equipment that cost $93,500 with;accumulated depreciation of $64,000. Zoogle asked $35,000 for the equipment but;was only able to sell the equipment for $33,000. Compute the amount of gain or;loss on the sale.;a. $3,500 loss;b. $3,500 gain;c. $5,500 loss;d. $5,500 gain;e. $58,500 gain;29. Zoogle is required to report its trucks at book value on its;balance sheet, which represents;a. Acquisition cost less the accumulated depreciation;b. Acquisition cost plus accumulated depreciation;c. Amount that could be obtained for the asset if it were sold;d. What the trucks are worth;30. Zoogle?s obligations due to be paid within one year or the;company's operating cycle, whichever is longer, are;a. Current assets;b. Operating cycle liabilities;c. Bills;d. Current liabilities;31. Employee Phil Phoenix is paid monthly. For the month of;January, he earned a total of $8,288. The FICA tax rate for social security is;6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate is 0.8%;and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first;$7,000 of an employee's pay. The amount of Federal Income Tax withheld from his;earnings was $1,375.17. What is the total amount of taxes withheld from the;Phoenix's earnings?;a. $3,097.17;b. $2,443.21;c. $2,009.21;d. $1,722.00;e. $1,495.36;Questions #32 ? 33 are based on the following information;Zoogle sold merchandise to;TechCom on October 17 and received a $4,800, 90-day, 10% note in return.;32. What entry should Zoogle;make on December 31, to record the accrued interest on the note? (Assume 360;days in a year.);a. Debit Interest Receivable $20, credit Interest Revenue $20.;b. Debit Interest Receivable $100, credit Interest Revenue $100.;c. Debit Cash $20, credit Notes Receivable $20.;d. Debit Cash $100, credit;Notes Receivable $100.;33. How much cash will;Zoogle receive on January 15 of the next year when the note matures? (Assume;360 days in a year.);a. $4,800;b. $4,920;c. $5,000;d. $5,280;34. Zoogle issued bonds with;a face value of $400,000 and a quoted price of 98?. The bonds had a selling;price of;a. $394,000.;b. $393,000.;c. $392,200.;d. $392,020.;35. Zoogle Corporation is;founded on January 1, 2014. The state authorized 3,000 shares of;common stock with a $10 par;value. Ten investors contributed $3,000 each in exchange for 100 shares each.;What is the correct accounting entry?;a. Cash 30,000;Common Stock 30,000;b. Cash 30,000;Common Stock 3,000;Paid-in Capital in Excess of;Par Value 27,000;c. Cash 30,000;Common Stock 10,000;Paid-in Capital in Excess of;Par Value 20,000;d. Cash 300,000;Common Stock 90,000;Paid-in Capital in Excess of;Par Value 210,000;That?s it for Zoogle! But there are more questions to enjoy?????..;36. The following were some;of the accounts in the stockholders? equity section of the balance sheet for;Cloud Nine Co.;Preferred stock 6%, $100;par, cumulative, 1,000 shares issued;and;outstanding???????????????? $100,000;Common stock $10 par, 20,000;shares issued;19,200 shares;outstanding???????????? $200,000;Paid ?in capital in excess;of par-common????????... $100,000;Treasury;stock?????????????????? ? $(16,000);Cloud Nine Co. typically;pays a dividend to its shareholders every year, however Cloud Nine failed to distribute;a dividend last year. The board of directors declared a dividend to provide the;preferred shareholders with all of their share of the cumulative and current;dividend amounts and also $.50 per share dividend for the common shareholders.;The total amount of the dividend will be;a. $15,600;b. $16,000;c. $21,600;d. $22,000;37. IBM issues 200,000;shares of stock at a par value of $0.01 for $150 per share. Three years later;it repurchases these shares for $80 per share. IBM records the repurchase in;which of the following ways?;a. Debit Stockholders;Equity for $30 million, credit Additional Paid-in Capital for $16 million and;credit Cash for $16 million.;b. Debit common stock for;$2,000, debit Additional Paid-in Capital for $15,998,000 and credit cash for;$16 million.;c. Debit Common Stock for;$2,000, debit Additional Paid-in Capital for $29,998,000 and credit Cash for;$30 million.;d. Debit Treasury Stock for;$16 million and credit Cash for $16 million.;38. Which of the following;statements is nottrue about a;2-for-1 stock split?;a. Total paid-in capital;increases.;b. The market value of the;stock will probably decrease.;b. A stockholder with 5;shares before the split owns 10 shares after the split.;c. Par value per share is;reduced to half of what it was before the split.;39. Peninsula Company;reported net income of $260,000 for the year. During the year, accounts;receivable increased by $21,000, accounts payable decreased by $9,000 and;depreciation expense of $45,000 was recorded. Net cash provided by operating;activities for the year is;a. $275,000.;b. $245,000.;c. $227,000.;d. $260,000.;40. Statler Company sold for;cash a machine that originally cost $18,000. The accumulated;depreciation to date of;disposal was $15,000, and a gain on the disposal of $2,000 was;reported. Therefore, the;cash inflow from this transaction was;a. $1,000;b. $3,000;c. $4,000;d. $5,000;Matching;Match each activity below;with the proper classification by inserting the proper capital;letter in the space to the;left.;Classification of Activity;I. Investing;F. Financing;O. Operating;Activity;41. Sales of land;used in the business.;42. Payment of;long-term debt with cash.;43. Cash paid to;suppliers of inventory.;44. Purchase of;equipment for cash.;45. Issuance of;common stock for cash.;46. Cash received;from customers.;Financial Statement Problem;From the following jumbled;trial balance at the end of the 2014 year, prepare a;*Multi-step Income Statement;*Statement of Changes in;Retained Earnings;*Classified Balance Sheet;----------------------------;MUST COMPLETE -----------------------------;Bell Department Store is located in midtown Metropolis.;During the past several years, net income has been declining because suburban;shopping centers have been attracting business away from city areas. At the end;of the company?s fiscal year on November 30, 2014, these accounts appeared in;its adjusted trial balance.;Accounts Payable;$ 26,800;Accounts Receivable;17,200;Accumulated Depreciation?Equipment;68,000;Cash;8,000;Common Stock;35,000;Cost of Goods Sold;614,300;Freight-Out;6,200;Equipment;157,000;Depreciation Expense;13,500;Dividends;12,000;Gain on Disposal of Plant Assets;2,000;Income Tax Expense;10,000;Insurance Expense;9,000;Interest Expense;5,000;Inventory;26,200;Notes Payable;43,500;Prepaid Insurance;6,000;Advertising Expense;33,500;Rent Expense;34,000;Retained Earnings;14,200;Salaries and Wages Expense;117,000;Sales Revenue;904,000;Salaries and Wages Payable;6,000;Sales Returns and Allowances;20,000;Utilities Expense;10,600

 

Paper#42851 | Written in 18-Jul-2015

Price : $44
SiteLock