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Accounting Final exam

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Question;1 of 50;Sarbanes-Oxley was passed in response to which;of the following?;The.com implosion;The savings and loan bailout;The implosion of WorldCom and Enron;None of the above;Question;2 of 50;Which of the following describes the internal;control component "monitoring of controls"?;Internal auditors monitor company controls to;safeguard assets, and external auditors evaluate the controls to ensure that;the accounting records are accurate.;Monitoring of controls is the "tone at;the top" of the business.;Monitoring of controls is designed to ensure;that the business's goals are achieved.;A company must identify its risks.;Question;3 of 50;Which of the following is a security procedure;designed for e-commerce?;Burglar alarms;Firewalls;Fireproof vaults;None of the above;Question;4 of 50;Case;8.5;At December 31, 2008;McGovern Company overstated ending inventory by $50,000.;Refer to Case 8.5. How;does this error affect cost of goods sold for 2008?;Has no effect on Cost of Goods Sold;Overstates Cost of Goods Sold by $50,000;Understates Cost of Goods Sold by $50,000;None of the above;Question;5 of 50;Gilkey Construction;Company writes of the account of Arthur Blanks of $78,000. The journal entry to;record this under the direct write off method is;A);Bad Debts Expense;78,000;Accounts;Receivable - Arthur Blanks;78,000;B);Allowance for doubtful accounts;78,000;Bad;Debts Expense;78,000;C);Allowance for doubtful accounts;78,000;Accounts;Receivable - Arthur Blanks;78,000;D);Accounts Receivable - Arthur Blanks;78,000;Allowance;for doubtful accounts;78,000;A);B);C);D);Question;6 of 50;Refer to Case 7.11. What;is the quick ratio for 2004?;.75;1.0;.61;.70;Question;7 of 50;Which of the following is the last step in the;daily control over cash receipts by mail?;A mailroom employee sends all customer checks;to the treasurer who has the cashier make the bank deposit.;A mailroom clerk opens the mail and sends the;remittance advices to the accounting department.;The controller compares the records of the;day's bank deposit amount from the treasurer and the debit to Cash from the;accounting department.;The accounting department prepares journal;entries to Cash and the customers' accounts.;Question;8 of 50;Case;7.4;Gilkey Security Systems has the following for;year ended 12-31-09 before adjustments;Accounts;receivable;$130,000;Net;Credit Sales;$840,000;Allowance;for doubtful accounts;$3,000 debit balance;Aging;of accounts receivable;$19,000;Refer to Case 7.4. The;balance in the allowance for doubtful accounts after the adjustment is;$22,000.;$19,000.;$28,200.;$84,000.;Question;9 of 50;An electronic fund transfer (EFT) for payment of;a bill would be;subtracted from the bank balance of a bank;reconciliation.;added to the book balance of a bank;reconciliation.;added to the bank balance of a bank;reconciliation.;subtracted from the book balance of a bank;reconciliation.;Question;10 of 50;Case;8.1;Emerson Electronics had;the following information related to its September inventory.;Number of Units;Cost;Sept. 1;Beginning Inventory;100 Units;$10;5;Purchase;200 Units;$11;15;Sold;150 Units;26;Purchase;100 Units;$12;30;Sold;200 Units;Sales were made at $20;per unit and Emerson uses the perpetual inventory system.;Refer to Case 8.1. The;value of cost of goods sold under LIFO would be;$3,900.;$4,200.;$4,000.;$3,800.;Question;11 of 50;For good internal control, the credit department;should have no access to;customer information.;customer credit applications.;computer systems.;cash.;Question;12 of 50;Accounts receivable minus the allowance for;doubtful accounts equals;net realizable value of accounts receivable.;market value of accounts receivable.;book value of accounts receivable.;historical costs of accounts receivable.;Question;13 of 50;By law, the provisions of Sarbanes-Oxley apply;to;all companies;private companies;public companies;public companies with sales greater than one;billion dollars;Question;14 of 50;Case;8.5;At December 31, 2008, McGovern;Company overstated ending inventory by $50,000.;Refer to Case 8.5. How;does this error affect net income for 2009?;Has no effect on Net Income;Overstates Net Income by $50,000;Understates Net Income by $50,000;None of the above;Question;15 of 50;Rising interest rates, gas prices, declining;profits and strong competition in the auto industry all would be factors;impacting the __________ of General Motors.;control environment;segregation of duties;control activities;risk assessment;Question;16 of 50;Non sufficient funds (NSF) checks would be;subtracted from the book balance of a bank;reconciliation.;subtracted from the bank balance of a bank;reconciliation.;added to the bank balance of a bank reconciliation.;added to the book balance of a bank;reconciliation.;Question;17 of 50;Case;7.5;Gilkey Security Systems;has the following for year ended 12-31-09 before adjustments;Accounts;receivable;$130,000;Net;Credit Sales;$840,000;Allowance;for doubtful accounts;$3,000 debit balance;Aging;of accounts receivable;$19,000;Gilkey uses the aging;method of estimating bad debt expense.;Refer to Case 7.5. The;journal entry for estimating bad debt expense at year end is;A);Allowance for doubtful accounts;19,000;Accounts;Receivable;19,000;B);Bad Debts Expense;22,000;Allowance;for doubtful accounts;22,000;C);Bad Debts Expense;19,000;Allowance;for doubtful accounts;19,000;D);Allowance for doubtful accounts;22,000;Bad;Debts Expense;22,000;A);B);C);D);Question;18 of 50;Open promises to pay by customers are called;notes receivable.;other receivables.;accounts receivable.;none of the above.;Question;19 of 50;Which of the following is a control over petty;cash?;Support all fund payments with a petty cash;ticket.;Keep a specific amount of cash on hand in the;fund.;Designate a custodian of the petty cash fund.;All of the above are controls.;Question;20 of 50;Which of the following is a requirement of the;Sarbanes-Oxley Act?;The outside auditor must issue an internal;control report for each public company, and the Public Company Oversight;Board evaluates the client's internal controls;The Public Company Oversight Board issues an;internal control audit report for every publicly held company.;Accounting firms may not both audit a public;client and also provide certain consulting services for the same client;Public companies oversee the work of auditors;of other public companies.;Question;21 of 50;Case;7.2;Oddessy consulting has;the following for year ended 12-31-09 before adjustments;Accounts;receivable;$330,000;Net;Credit Sales;$1,200,000;Allowance;for doubtful accounts;$4,700 credit balance;Estimated;percentage of Bad debts on credit sales;2%;Oddessy uses the net;credit sales method of estimating bad debt expense.;Refer to Case 7.2. The;journal entry for estimating bad debt expense at year end is;A);Allowance for doubtful accounts;24,000;Accounts;Receivable;24,000;B);Allowance for doubtful accounts;28,700;Bad;Debts Expense;28,700;C);Bad Debts Expense;28,700;Allowance;for doubtful accounts;28,700;D);Bad Debts Expense;24,000;Allowance;for doubtful accounts;24,000;A);B);C);D);Question;22 of 50;Which cost would be part of the cost of land?;Putting up fencing around a building;Removing an old building from the land;Installing lights in a parking lot;Installing a sprinkler system;Question;23 of 50;In dealing with cash receipts, the amount;debited to cash should equal;the amount of the deposit;the amount of total sales;the amount of cash sales;some other amount;Question;24 of 50;Chase Bank loans P+P;Company $120,000 on a 1 year promissory note on July 1, 2009. The interest rate;of this loan is 12%. The principle and interest are due in one year. The;journal entry to accrue interest earned on12-31-09 is;A);Cash;7,200;Interest;revenue;7,200;B);Cash;14,400;Interest;revenue;14,400;C);Interest receivable;7,200;Interest;Revenue;7,200;D);Interest Receivable;14,400;Interest;Revenue;14,400;A);B);C);D);Question;25 of 50;Case;8.1;Emerson Electronics had;the following information related to its September inventory.;Number of Units;Cost;Sept. 1;Beginning Inventory;100 Units;$10;5;Purchase;200 Units;$11;15;Sold;150 Units;26;Purchase;100 Units;$12;30;Sold;200 Units;Sales were made at $20;per unit and Emerson uses the perpetual inventory system.;Refer to Case 8.1. The;value of ending inventory under FIFO would be;$700.;$600.;$500.;$550.;Question;26 of 50;In a $500 imprest petty cash fund;the currency minus coins plus tickets should;equal $500.;the currency minus coins minus tickets should;equal $500.;the currency plus coins plus tickets should;equal $500.;the currency plus coins minus tickets should;equal $500.;Question;27 of 50;Case;8.2;Emerson Electronics had;the following information related to its September inventory.;Number of Units;Cost;Sept. 1;Beginning Inventory;200 Units;$10;6;Purchase;200 Units;$12;16;Sold;250 Units;27;Purchase;200 Units;$14;30;Sold;300 Units;Sales were made at $15;per unit and Emerson uses the perpetual inventory system.;Refer to Case 8.2. Gross;profit would be how much under FIFO?;$8,250;$1,550;$1,950;$1,750;Question;28 of 50;Which of the following demonstrates internal;control over cash receipts?;A mailroom employee deposits all customer;checks at the bank.;A mailroom employee sends remittance advices;to the treasurer;A mailroom employee sends all customer checks;to the treasurer who has the cashier make the bank deposit;All of the above demonstrate internal control;over cash receipts;Question;29 of 50;A written promise to pay a specified amount of;money at a particular future date by a customer is a(n);accounts receivable.;mortgage payable.;notes payable.;notes receivable.;Question;30 of 50;Case;8.2;Emerson Electronics had;the following information related to its September inventory.;Number of Units;Cost;Sept. 1;Beginning Inventory;200 Units;$10;6;Purchase;200 Units;$12;16;Sold;250 Units;27;Purchase;200 Units;$14;30;Sold;300 Units;Sales were made at $15;per unit and Emerson uses the perpetual inventory system.;Refer to Case 8.2. Gross;profit would be how much under LIFO?;$1,950;$8,250;$1,550;$1,750;Question;31 of 50;Which of the following describes the internal control;component "control procedures"?;A company must identify its risks.;Internal auditors monitor company controls to;safeguard assets, and external auditors monitor the controls to ensure that;the accounting records are accurate.;Control procedures are the "tone at the;top" of the business.;Control procedures are designed to ensure that;the business's goals are achieved.;Question;32 of 50;Mary is a warehouse worker who fills orders for;shipment, receives new shipments of inventory in the warehouse and also records;all inventory transactions into the accounting records. Mary is violating which;of the following?;Independent checks;Physical safe guards;Segregation of duties;None of the above;Question;33 of 50;A(n) __________ is an internal control tool that;reconciles the differences between a depositor's cash records and the;depositor's cash balance in its bank account.;checking account;bank statement;bank reconciliation;imprest petty cash fund;Question;34 of 50;The direct write off method of accounting for;bad debts violates which of the following accounting principles?;Entity concept;Going concern;Historical cost;Matching principle;Question;35 of 50;The intentional misrepresentation of financial information;on the financial statements is called;lack of internal controls.;theft.;fraudulent financial reporting.;employee fraud.;Question;36 of 50;Case;8.1;Emerson Electronics had;the following information related to its September inventory.;Number of Units;Cost;Sept. 1;Beginning Inventory;100 Units;$10;5;Purchase;200 Units;$11;15;Sold;150 Units;26;Purchase;100 Units;$12;30;Sold;200 Units;Sales were made at $20;per unit and Emerson uses the perpetual inventory system.;Refer to Case 8.1. The;value of cost of goods sold under FIFO would be;$2,800.;$3,100.;$2,900.;$3,800.;Question;37 of 50;Case;8.6;At December 31, 2008;McGovern Company understated ending inventory by $50,000.;Refer to Case 8.6. How;does this error affect net income for 2008?;Understates Net Income by $50,000;Overstates Net Income by $50,000;Has no effect on Net Income;None of the above;Question;38 of 50;The journal entry to set up a $500 imprest petty;cash fund would be;A);Miscellaneous Expense;500;Cash;in bank;500;B);Cash in bank;500;Petty;Cash;500;C);Petty Cash;500;Cash;in bank;500;D);Accounts Receivable;500;Cash;in bank;500;A);B);C);D);Question;39 of 50;Which of the following is the first step in the;purchasing and payment process?;The supplier ships the goods and sends an;invoice to the purchaser.;The purchaser sends a check to the supplier.;The purchaser sends a purchase order to the;supplier.;The purchase receives the inventory and;prepares a receiving report.;Question;40 of 50;Which inventory method would use the most;current costs to determine costs of goods sold?;LIFO;Specific Identification;Weighted average;FIFO;Question;41 of 50;Which of the following is considered a long term;asset?;Inventory;Accounts receivable;Land;Cash;Question;42 of 50;Which of the following is NOT one of the;components of internal control?;Control procedures;Risk assessment;Theft management;Control environment;Question;43 of 50;With good internal controls, the person who;handles cash can also;issue credits to customers for merchandise;returned to us.;account for cash receipts from customers.;account for cash payments.;do none of the above.;Question;44 of 50;Which inventory method would use the oldest;costs to value ending inventory?;LIFO;Weighted average;Specific Identification;FIFO;Question;45 of 50;Which of the following describes the internal control;component "control environment"?;Internal auditors monitor company controls to;safeguard assets, and external auditors monitor the controls to ensure that;the accounting records are accurate.;The control environment is the "tone at;the top" of the business.;The control environment is designed to ensure;that the business's goals are achieved;A company must identify its risks.;Question;46 of 50;Case;8.4;Emerson Electronics had;the following information related to its September inventory.;Number of Units;Cost;Sept. 1;Beginning Inventory;200 Units;$10;8;Purchase;200 Units;$12;29;Sold;200 Units;$14;200 units were sold;$15 per unit and Emerson uses the perpetual inventory system.;Refer to Case 8.4.;Emerson has how many units in Ending Inventory?;200 units;50 units;100 units;300 units;Question;47 of 50;Case;7.6;Chase Bank loans P+P;Company $120,000 on a 1 year promissory note on January 1, 2009. The interest;rate of this loan is 12%. The principle and interest are due on 12-31-2009.;Refer to Case 7.6. The;amount of interest revenue that Chase will earn on this loan is;$1,200.;$120,000.;$14,400.;$1,000.;Question;48 of 50;Which of the following is TRUE of internal;control?;A company's outside auditor is responsible for;the company's internal control system.;One of the major purposes of internal control;is to ensure accurate, reliable accounting records.;Internal control procedures tend to diminish;the importance of operational efficiency.;Public companies generally had no internal;control systems prior to the enactment of the Sarbanes-Oxley Act;Question;49 of 50;Case;9.3;Leah, Inc. has machinery;with a cost of $100,000. The machinery has an estimated useful life of 10;years, and an estimated salvage value of $10,000. The machinery is expected to;be able to produce a total of 1,000,000 units during its estimated life.;Refer to Case 9.3. The;amount of deprecation expense in the second year under straight line;depreciation would be;$1,000.;$10,000.;$9,000.;$5,000.;Question;50 of 50;Inventory should be shown on the balance sheet;at;market value.;cost.;the higher of cost or market value.;the lower of cost or market value.

 

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