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accounting test

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Question;Credits are used to record;A) decreases in assets and owner's equity and;increases in liabilities.B) decreases in assets, liabilities, and;owner's equity.C) decreases in liabilities and increases in;assets and owner's equity.D) increases in liabilities and owner's;equity.;2.;Which of the following types of;accounts normally have debit balances?;A) assets and revenueB) assets, liabilities, and owners equityC) expenses and assetsD) liabilities and owner?s equity;3.;On November 1, 20--, a firm accepted;a 4-month, 10 percent note for $900 from a customer with an overdue balance.;The accrued interest recorded for this note for the year ended December 31;20--, is (assume a 360 day year);A) $75B) $30C) $15D) $90;4.;The entry to record a return by a;credit customer of defective merchandise on which no sales tax was charged;includes;A) a credit to Sales and a debit to Accounts;ReceivableB) a debit to Sales and a credit to Sales;Returns and AllowancesC) a debit to Sales Returns and Allowances;and a credit to Accounts ReceivableD) a debit to Accounts Receivable and a;credit to Sales Returns and Allowances;5.;If a firm had sales of $50,000;during a period and sales returns and allowances of $4,000, its net sales were;A) $54,000B) $50,000C) $46,000.D) $4,000;6.;On December 31, prior to adjustment;Allowance for Doubtful Accounts has a credit balance of $200. An aged analysis;of the accounts receivable produces an estimate of $1,000 of probable losses;from uncollectible accounts. The adjusting entry needed to record the estimated;losses from uncollectible accounts is made for;A) $800B) $1,000C) $1,200D) $200;7.;A firm reported net credit sales of;$225,000 during the year and has a balance of $20,000 in its Accounts;Receivable account at year-end. Prior to adjustment, Allowance for Doubtful;Accounts has a credit balance of $100. The firm estimated its losses from;uncollectible accounts to be one-half of 1 percent of sales. The entry to;record the estimated losses from uncollectible accounts will include a credit;to Allowance for Doubtful Accounts for;A) $1,225B) $1,125C) $ 900D) $2,250;8.;Upon collection of the amount due on;a $6,000 face value, 90-day note with interest at 10 percent a year, the Note;Receivable account is;A) debited for $6,600B) credited for $6,000C) credited for $6,150D) debited for $6,000;9.;The entry to record a purchase of;merchandise on credit using a periodic inventory system includes;A) a debit to Merchandise Inventory and a credit;to Accounts PayableB) a credit to Merchandise Inventory and a;debit to Accounts PayableC) a debit to Accounts Payable and a credit;to PurchasesD) a debit to Purchases (COGS) and a credit;to Accounts Payable;10.;The entry to record a purchase of;merchandise on credit using a perpetual inventory system includes;A) a debit to Merchandise Inventory and a;credit to Accounts PayableB) a credit to Merchandise Inventory and a;debit to Accounts PayableC) a debit to Accounts Payable and a credit to;PurchasesD) a debit to Purchases (COGS) and a credit;to Accounts Payable;11.;The total of the balances in the;creditor's accounts should agree with the balance of;A) the Purchases account in the general;ledgerB) the Accounts Receivable account in the;general ledgerC) the Accounts Payable account in the;general ledgerD) the Sales account in the general ledger;12.;A firm purchased equipment for;$6,000 on credit and issued a 120-day note bearing interest at 9 percent. To;record this transaction, the accountant would;A) debit Equipment for $6,000 and credit;Notes Payable for $6,000B) debit Equipment for $6,180, credit;Interest Expense for $180, and credit Notes Payable for $6,000C) debit Equipment for $6,000, debit Interest;Expense for $180, and credit Notes Payable for $6,180D) credit Equipment for $6,000 and debit;Accounts Payable for $6,000;13.;When a company issues a promissory;note, the accountant records an entry that includes a credit to Note Payable;for;A) the face value of the noteB) the face value of the note plus the;interest that will accrueC) the face value less the interest that will;accrueD) the maturity value of the note;14.;How much interest will accrue on a;$20,000 face value, 60-day note that bears interest at 9 percent a year?;(assume a 360 day year);A) $300B) $1,800C) $450D) $900;15.;Notes payable due within one year;are usually shown;A) in the Current Assets section of the;balance sheetB) in the Current Liabilities section of the;balance sheetC) in the Other Expenses section of the;income statementD) in the Long-Term Liabilities section of;the balance sheet;16.;The maturity value of a 90-day note;for $4,000 that bears interest at 10 percent a year is (assume a 360 day year);A) $4,400B) $4,000C) $3,900D) $4,100;17.;Lisa Ramos has a regular hourly rate;of $10.75. In a week when she worked 40 hours and had deductions of $55 for;federal income tax, $26.75 for social security tax, and $6.25 for Medicare tax;her net pay was;A) $430B) $342C) $375D) $397;18.;The amount debited to Wages Expense;when a payroll is recorded is the;A) Regular gross earnings (not including;overtime)B) Earnings after taxesC) Net earningsD) Total gross earnings;19.;Each type of deduction made from the;employees' earnings is recorded in a separate;A) asset accountB) expense accountC) liability accountD) revenue account;20.;To record the deposit of FUTA tax;the accountant would;A) debit Payroll Taxes Expense and credit;Federal Unemployment Tax Payable.B) debit Payroll Taxes Expense and credit;Cash.C) debit Federal Unemployment Tax Payable and;credit Cash.D) debit Social Security Taxes Payable and;credit Cash.;21.;The adjusting entry to record;accrued interest on a note payable requires;A) a debit to Interest Income and a credit to;Notes PayableB) a debit to Interest Payable and a credit;to Interest ExpenseC) a debit to Interest Expense and a credit;to CashD) a debit to Interest Expense and a credit;to Interest Payable;22.;On May 1, 20--, a firm purchased a;1-year insurance policy for $1,800 and paid the full premium in advance. The;insurance expense associated with this policy for 20?is;A) $600B) $1,200C) $1,800D) $1,050;23.;An asset that cost $14,000 was sold;for $9,000 cash. Accumulated depreciation on the asset was $7,000. The entry to;record this transaction includes the recognition of;A) a gain of $2,000B) a loss of $5,000C) neither a gain nor a lossD) a loss of $2,000;24.;An adjusting entry is usually not;required for an expense item;A) when it is paid for and recorded in one;period but not fully used until a later periodB) when it is used in one period but not paid;for or recorded until a later periodC) when it is paid for, recorded, and used in;one periodD) when it is budgeted but not paid for or;used during the period;25.;A firm that sells a single product;had a beginning inventory of 4,000 units with a total cost of $28,000. Early in;the year, 10,000 units were purchased at $9 each. Using FIFO, what is the value;of the ending inventory of 3,000 units?;A) $27,000B) $24,000C) $21,000D) $36,000;26.;A firm that sells a single product;had a beginning inventory of 4,000 units with a total cost of $16,000. Early in;the year, 8,000 units were purchased at $6 each. Using LIFO, what is the value;of the ending inventory of 2,000 units?;A) $12,000B) $10,000C) $8,000D) $24,000;27.;A matching of the most recent costs;to revenue results from the use of;A) the LIFO methodB) the FIFO methodC) the average cost methodD) the lower of cost or market method;28.;On January 2, 20--, a firm purchased;equipment for $8,500. Depreciation expense for 20--, given the straight-line;method, a 5-year useful life, and a salvage value of $1,500, is;A) $1,500B) $1,700C) $1,200D) $1,400;29.;A firm purchases an asset for;$50,000 and estimates that it will have a useful life of five years and a;salvage value of $5,000. Under the double-declining-balance method, the;depreciation expense for the first year of the asset's useful life is;A) $9,000B) $18,000C) $10,000D) $20,000;30.;The method of depreciation that;results in the same amount of depreciation expense each year is the;A) units-of-output methodB) straight-line methodC) sum-of-the-years'-digits methodD) declining-balance method;31.;An accountant who records revenue;when a credit sale is made rather than waiting for the receipt of cash from the;customer is;A) following the accrual principleB) following the conservatism conventionC) violating generally accepted accounting;principlesD) following the consistency principle;32.;Depreciating equipment over its;useful life is an example of;A) following the objectivity assumptionB) applying the matching principleC) applying the realization principleD) applying the conservatism convention;33.;Keeping the personal assets of the;owner of a business separate from the assets of the firm is an example of;A) following the going concern assumptionB) applying the realization principleC) following the separate entity assumptionD) applying the conservatism convention;34.;A firm has sales of $40,000 in 2004;and $45,000 in 2005. The increase in sales from 2004 to 2005 is;A) 25%B) 20%C) 125%D) 12.5%;35.;A firm has liabilities of $60,000;and stockholders? equity of $180,000. The percentage of total liabilities to;total assets is;A) 25 percentB) 20 percentC) 50 percentD) 75 percent;36.;The current ratio is calculated by;A) dividing current assets by total;liabilitiesB) dividing net working capital by current;liabilitiesC) dividing current assets by current;liabilitiesD) dividing total assets by current;liabilities;37.;A company's January 1 balance in;Accounts Receivable is $70,000. The December 31 balance is $80,000. If the;company has credit sales of $600,000, the accounts receivable turnover is;A) 8.0 timesB) 7.5 timesC) 4.0 timesD) 7.0 times;38.;Stockholders' equity;A) is usually equal to cash on handB) includes paid-in capital and liabilitiesC) includes retained earnings and paid-in;capitalD) is shown on the income statement;39.;The charter of a corporation;authorizes 100,000 shares of common stock. Assume that 50,000 shares were;originally issued and 5,000 were subsequently reacquired. What is the amount of;cash dividends to be paid if a $1 per share dividend is declared?;A) $50,000B) $5,000C) $100,000D) $45,000;40.;If the market rate of interest is;8%, the price of 6% bonds paying interest semiannually with a face value of;$100,000 will be;A) equal to $100,000B) greater than $100,000C) less than $100,000D) greater than or less than $100,000;depending on the maturity date of the bonds;41.;The journal entry a company records;for the issuance of bonds when the contract rate is greater than the market;rate would be;A) debit Cash, credit Premium on Bonds;Payable and Bonds PayableB) debit Bonds Payable, credit CashC) debit Cash and Discount on Bonds Payable;credit Bonds PayableD) debit Cash, credit Bonds Payable;42.;Jack and Jill share income and;losses in a 2:1 ratio after allowing for salaries to Jack of $24,000 and;$30,000 to Jill. Net income for the partnership is $66,000. Income should be divided;as follows;A) Jack, $24,000, Jill, $30,000B) Jack, $24,000, Jill, $34,000C) Jack, $30,000, Jill, $36,000D) Jack, $32,000, Jill, $34,000;43.;The liability for a dividend is;recorded on which of the following dates?;A) the date of recordB) the date of paymentC) the date of announcementD) the date of declaration;44.;The journal entry to issue 1,000,000;shares of $5 par common stock for $7.00 per share on January 2nd would be;A);Jan;2;Cash;7,000,000;Common;Stock;5,000,000;Paid-in;Capital in Excess of Par - C/S;2,000,000;B);Jan;2;Cash;5,000,000;Common;Stock;5,000,000;C);Jan;2;Cash;5,000,000;Common;Stock;2,000,000;Paid-in;Capital in Excess of Par - C/S;7,000,000;D);Jan;2;Cash;1,000,000;Common;Stock;1,000,000;45.;Which types of inventories does a;manufacturing business report on the balance sheet?;A) Finished goods inventory and work in;process inventoryB) Direct materials inventory and work in;process inventoryC) Direct materials inventory, work in;process inventory, and finished goods inventoryD) Direct materials inventory and finished;goods inventory;46.;In a job order cost accounting;system, the entry to record the flow of direct materials into production is;A) debit Work in Process, credit MaterialsB) debit Materials, credit Work in ProcessC) debit Factory Overhead, credit MaterialsD) debit Work in Process, credit Supplies;47.;Based on the following production;and sales estimates for May, determine the number of units expected to be;manufactured in May;Estimated;inventory (units), May 1;10,000;Desired;inventory (units), May 31;15,000;Expected;sales volume (units);South;region;30,000;West;region;40,000;North;region;20,000;Unit;sales price;$10;A) 85,000B) 95,000C) 90,000D) 105,000;48.;If fixed costs are $250,000, the;unit selling price is $105, and the unit variable costs are $65, what is the;break-even sales (units)?;A) 3,846 unitsB) 2,381 unitsC) 10,000 unitsD) 6,250 units;49.;The entry to transfer a net income;to the owner's capital account would include;A) a debit to the owner's capital account and;a credit to CashB) a debit to the owner's drawing account and;a credit to the owner's capital accountC) a debit to Income Summary and a credit to;the owner's capital accountD) a debit to the owner's capital account and;a credit to Income Summary;50.;The entry to close the appropriate;insurance account at the end of the accounting period is;A) debit Income Summary, credit Prepaid;InsuranceB) debit Prepaid Insurance, credit Income;SummaryC) debit Insurance Expense, credit Income;SummaryD) debit Income Summary, credit Insurance;Expense;51.;Which of the following accounts;ordinarily appears in the post-closing trial balance?;A) Unearned RentB) Bill Smith, DrawingC) Supplies ExpenseD) Fees Earned;52.;John, age 25, is a full time student;at a state university. John lives with his sister, Ann, who provides over half;of his support. His only income is $4,000 of wages from a part-time job at the;college book store. What is Ann?s filing status?;A) SingleB) Head of HouseholdC) Married, filing separatelyD) Qualifying widow;53.;Wesley owns and operates the;Cheshire Chicken Ranch in Turpid, Nevada. The income from this ranch is;$49,000. Wesley wishes to use the easiest possible tax form. He may file;A) Form 1040EZB) Form 1040AC) Form 1040D) Form 1040C;54.;Which of the following would be a;business debt if it were uncollectible?;A) A taxpayer loans his father $1,000 to;start a businessB) A taxpayer loans his son $10,000 to;purchase a rental houseC) A dentist, using the accrual basis of;accounting, extends credit to a patient for services providedD) A taxpayer loans his brother $3,000 to;purchase a truck for use in his brother?s business;55.;Which of the following tax credits;can exceed the amount of the taxpayer?s tax liability?;A) Child and dependent care creditB) HOPE creditC) Alternative minimum tax creditD) Earned income credit;56.;Sol purchased land as an investment;on January 12, 2004 for $85,000. On January 31, 2008 Sol sold the land for;$90,000 cash. What is the nature of the gain or loss?;A) long-term capital lossB) long-term capital gainC) short-term capital lossD) short-term capital gain;57.;Which of the following is a benefit;of computerized accounting systems?;A) Time consumingB) Posting and journalizing separate;functionsC) AccuracyD) No subsidiary ledgers;58.;Trading Securities normally appears;on which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;59.;Depreciation Expense normally;appears on which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;60.;Leased Equipment normally appears on;which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;61.;Dividends Payable normally appears;on which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;62.;Gain on Sale of Equipment normally;appears on which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;63.;Prepaid Rent normally appears on;which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;64.;Accumulated Depreciation - Leased;Asset normally appears on which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;65.;Unearned Revenue normally appears on;which of the following statements?;A) Balance SheetB) Income StatementC) Statement of Owner's EquityD) Account does not appear on any statement;You must use the spreadsheet that;you downloaded earlier to complete the following questions;Pastina Co. Spreadsheet ?;Pastina Co.;Trial Balance;For the Period Ended January 31, 20xx;January 1 Balances;January 31 Balances;Account Title;Debit;Credit;Debit;Credit;Cash;25,000;41,900;-;Accounts Receivable;7,000;24,500;-;Allowance;1,750;-;3,500;Trading Securities;1,000;3,000;-;Inventory;35,000;28,000;-;Notes Receivable;5,000;18,000;-;Interest Receivable;1,200;4,000;-;Prepaid Rent;5,000;7,000;-;Prepaid Insurance;1,000;2,000;-;Patent;17,000;21,000;-;Equipment;38,500;42,000;-;Accumulated Depreciation - Equipment;-;14,000;Leased Equipment;-;120,000;Accumulated Depreciation - Leased Equipment;-;4,000;Accounts Payable;21,000;17,500;Wage Payable;8,000;5,500;Long-term Note Payable;35,000;59,850;Taxes Payable;4,000;6,900;Interest Payable;500;-;Discount on Notes Payable;3,500;2,800;Lease Payable;-;120,000;Unearned Revenue;7,000;-;Common Stock;30,000;45,000;Paid in Captial in Excess of Par - Common;16,700;17,500;Retained Earnings;13,250;?;Sales Revenue;-;147,000;Interest Revenue;-;1,400;Cost of Goods Sold;-;84,000;Wage Expense;-;14,600;Rent Expense;-;10,000;Depreciation Expense;-;9,000;Interest Expense;-;4,200;Supplies Expense;-;6,400;Insurance Expense;-;600;Bad Debt Expense;-;3,000;Rent Payable;1,000;5,000;Advertising expense;-;4,500;Amortization Expense;-;6,000;Dividends Payable;1,000;800;Gain on sale of equip;-;1,500;Income tax Expense;-;6,900;Treasury Stock;-;3,000;Gain on Sales of Trading Securities;-;2,000;Total;139,200;139,200;466,400;451,450;66.;What is the amount of cash collected;from customers if Pastina wrote off $1,250 of Accounts Receivable as;Uncollectible?;A) $121,250B) $128,250C) $170,250D) $145,750;67.;What are the total current;liabilities?;A) $16,780B) $23,000C) $35,700D) $85,700;68.;What would be the ending Retained;Earnings balance if Pastina declared $1,000 in dividends?;A) $14,950B) $12,950C) $12,250D) $11,500;69.;How much cash was paid for taxes?;A) $2,900B) $4,000C) $6,900D) $10,900;70.;What are the cash flows from the;sale of common stock?;A) $15,000B) $15,800C) $18,800D) $62,500;71.;How much cash was paid for;inventory?;A) $80,500B) $74,500C) $50,000D) $28,000;72.;What is the gross profit?;A) $147,000B) $84,000C) $63,000D) $64,400;73.;What is the total Stockholder's;Equity?;A) $74,450B) $72,450C) $73,450D) $75,450;74.;What is the value of total assets?;A) $191,400B) $289,900C) $292,900D) $311,400;75.;What is the book value of the;equipment?;A) $42,000B) $63,000C) $49,000D) $28,000

 

Paper#43437 | Written in 18-Jul-2015

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