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Accounting questions 7

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The order of the steps to prepare the worksheet are __________.;A. prepare the trial balance, complete adjustments, prepare the adjusted trial balance, extend the respective totals to the Income Statement and Balance Sheet columns;B. complete the adjustments, prepare the adjusted trial balance, prepare the trial balance, extend the respective totals to the Income Statement and Balance Sheet columns;C. extend the totals to the Income Statement and Balance Sheet columns, prepare the trial balance, complete the adjustments, prepare the adjusted trial balance;D. prepare the adjusted trial balance, complete the adjustments, prepare the trial balance, extend the respective totals to the Income Statement and Balance Sheet columns;If Prepaid Rent for the period is not adjusted __________.;A. assets will be overstated and expenses will be overstated;B. assets will be overstated and expenses will be understated;C. assets will be understated and expenses will be overstated;D. assets will be understated and expenses will be understated;When historical cost is used to record equipment, it would appear as the __________.;A. original cost on the balance sheet;B. residual value on the income statement;C. residual value on the balance sheet;D. original cost on the income statement;The entry to record the expiration of part of the prepaid rent will __________.;A. decrease total assets and increase total expenses at the end of the month;B. decrease total assets and decrease total expenses at the end of the month;C. increase total assets and increase total expenses at the end of the month;D. increase total assets and decrease total expenses at the end of the month;The adjusted trial balance columns __________.;A. help to ensure the ledger is still in balance;B. help to identify any errors that may have been made during adjustment;C. show updated account balances to aid in preparation of the financial statements;D. All of the above answers are correct.;If the balance of supplies at the start of the month was $900 and at the end of the month you had $450 on hand, the adjustment for Supplies would be __________.;A. $450;B. $550;C. $350;D. $900;If the Supplies account is not adjusted __________.;A. assets will be overstated and expenses will be understated;B. assets will be overstated and expenses will be overstated;C. assets will be understated and expenses will be overstated;D. assets will be understated and expenses will be understated;An adjustment for Prepaid Rent would indicate __________.;A. the amount originally paid;B. the amount expired;C. the amount on hand;D. the amount of the trial balance;Which of the following would cause total assets to decrease and total expense to increase?;A. recording the depreciation of equipment;B. recording the consumption of supplies;C. recording the expiration of prepaid rent;D. All of the above would have that effect.;The adjustment to record supplies used during the period would be __________.;A. debit Supplies, credit Supplies Expense;B. debit Supplies Expense, credit Cash;C. debit Supplies Expense, credit Supplies;D. debit Supplies, credit Cash;Which of the following would cause a contra-asset to be credited and an expense debited?;A. recording an accrued expense;B. recording the consumption of supplies;C. recording the building depreciation;D. All of the above would have that effect.;As Prepaid Rent is used, the asset becomes a(n. __________.;A. liability;B. expense;C. contra-asset;D. revenue;Bringing account balances up to date before preparing financial reports is called __________.;A. posting;B. adjusting;C. journalizing;D. analyzing;It's the end of the accounting period and no electric bill has been received (but the expense has been incurred., you should record an entry that __________.;A. increases the total assets and increases the total expenses;B. decreases the total assets and increases the total expenses;C. increases the total liabilities and increases the total expenses;D. decreases the total liabilities and increases the total expenses;If the adjustment for Supplies used during the period was not made __________.;A. expenses would be too low;B. assets would be too low;C. expenses would be too high;D. revenue would be too high;When historical cost is used in the accounting records, the book value of the asset is __________.;A. the original cost;B. the market value;C. original cost less accumulated depreciation;D. closed out;It is the year end, but not the pay period end. How will this affect the balance sheet?;A. Assets will be increased.;B. Liabilities will be increased.;C. Owner's equity will be increased.;D. This has no effect on the period end balance sheet.;The cost of an asset less accumulated depreciation equals __________.;A. residual value;B. book value;C. depreciation expense;D. None of the above answers are correct.;The capital balance amount shown in the balance sheet column of the worksheet represents __________.;A. the beginning capital plus net income;B. the beginning capital plus net income less withdrawal;C. the beginning capital less withdrawals;D. the beginning capital plus any investments to capital that occurred during the period;The capital balance amount shown in the balance sheet column of the worksheet represents __________.;A. the beginning capital plus net income;B. the beginning capital plus net income less withdrawal;C. the beginning capital less withdrawals;D. the beginning capital plus any investments to capital that occurred during the period;The depreciation of equipment will require an adjustment that results in __________.;A. total assets increasing and total expenses increasing;B. total assets increasing and total expenses decreasing;C. total assets and expenses decreasing;D. total assets decreasing and total expenses increasing;Debt management ratios measure __________.;A. how effectively a company is using its cash;B. how well a company is using debt versus equity position;C. a company's ability to earn profit;D. a company's ability to meet payable obligations;Profitability ratios measure __________.;A. a company's ability to earn profits;B. a company's ability to meet short-term obligations;C. how well a company is using debt versus equity;D. how effectively a company is using its assets;Assets that are not expected to provide benefits for a number of accounting periods are called __________.;A. current assets;B. fixed assets;C. long-term assets;D. property, plant, and equipment;How do you close the expense accounts?;A. debit Capital, credit the expense accounts;B. credit Capital, debit the expense accounts;C. credit Income Summary, debit the expense accounts;D. debit Income Summary, credit the expense accounts;Closing entries __________.;A. need not be journalized since they appear on the worksheet;B. need not be posted if the financial statements are prepared from the worksheet;C. are not needed if adjusting entries are prepared;D. must be journalized and posted;The correct order for closing accounts is __________.;A. revenue, expenses, income summary, withdrawals;B. revenue, income summary, expenses, withdrawals;C. revenue, expenses, capital, withdrawals;D. revenue, capital, expenses, withdrawals;Which of the following assets would not be classified as property, plant, and equipment?;A. delivery truck;B. copyright;C. land;D. furniture;An account in which the balance is not carried over from one accounting period to the next is called a __________.;A. permanent account;B. real account;C. temporary account;D. zero account;Which of the following is a non-depreciable asset?;A. desk chairs;B. land;C. computer;D. building;Income Summary __________.;A. is a temporary account;B. is a permanent account;C. summarizes revenue and expenses and transfers the balance to Capital;D. Both A and C are correct.;If current assets are $60,000 and current liabilities are $50,000, the current ratio is __________.;A. 0.8:1;B. 8.3:1;C. 2.1:1;D. 1.2:1;Debt management ratios measure __________.;A. how effectively a company is using its cash;B. how well a company is using debt versus equity position;C. a company's ability to earn profit;D. a company's ability to meet payable obligations;For vertical analysis purposes, a base item on a balance sheet is __________.;A. total assets;B. total equity;C. total liabilities;D. net equity;Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called __________.;A. comparative financial statements;B. common-size statements;C. cash flow analysis;D. horizontal analysis;Which analysis deals with the percentage of changes in certain items over several years?;A. vertical analysis;B. ratio analysis;C. trend analysis;D. common-size statement;The current ratio for a company with current assets of $70,000, current liabilities of $50,000, total assets of $150,000, and net sales of $80,000, would be __________.;A. 1.4;B. 0.714;C. 3.0;D. 0.875;The current ratio determines the ability of a company to __________.;A. pay off all payables;B. pay off current payables;C. manage its ability to earn profit;D. use its equity;To close the Withdrawals account __________.;A. debit Withdrawals, credit Capital;B. debit Capital, credit Withdrawals;C. debit Withdrawals, credit Income Summary;D. debit Income Summary, credit Withdrawals;Liquidity ratios measure __________.;A. how effectively a company is using its equity;B. how effectively a company is using its liabilities;C. a company's ability to pay shareholders;D. a company's ability to pay off short-term debts;The final step in the accounting cycle is __________.;A. preparing the post-closing trial balance;B. preparing the financial statements;C. journalizing the closing entries;D. journalizing the adjusting entries;Determine the adjusted cash balance per bank for Santa's Packaging on November 30, from the following information.;Cash balance on the bank statement $2,350;Customer's check returned?NSF 500;Customer's note collected by the bank 600;Deposits in transit, November 30 1,400;Outstanding checks, November 30 2,650;A. $1,250;B. $1,100;C. $1,550;D. $1,350;If the written amount on the check does not match the amount expressed in figures, the bank may __________.;A. pay the amount written in words;B. return the check unpaid;C. contact the drawer to see what was meant;D. All of these answers are correct.;The bank statement shows __________.;A. the beginning bank balance of the cash at the start of the month;B. the checks the bank has paid and any deposits received;C. any other charges or additions to the bank balance;D. All of these answers are correct.;Internal control over a company's assets should include which of the following?;A. Responsibilities and duties of employees will be divided.;B. All cash receipts will be deposited into the bank the same day they arrive.;C. All cash payments will be made by check (except petty cash..;D. All of these answers are correct.;Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should __________.;A. increase their cash account on the company's books;B. decrease their cash account on the company's books;C. increase the ending cash balance on the bank statement;D. decrease the ending cash balance on the bank statement;Endorsing a check __________.;A. guarantees payment;B. transfers the right to deposit or transfer cash;C. cancels the transaction;D. All of these answers are correct.;Advantages of on-line banking include __________.;A. convenience;B. transaction speed;C. effectiveness;D. All of the above answers are correct.;The check is written and signed by the __________.;A. drawer;B. drawee;C. payee;D. payer;Outstanding checks __________.;A. have been subtracted on the bank records but not the checkbook records;B. have not been presented to the bank for payment and have not been subtracted from the checkbook;C. have not been presented to the bank for payment but have been subtracted in the checkbook;D. have been returned to the business for nonpayment;Which of the following bank reconciliation items would be reflected in a journal entry?;A. error made by the bank;B. outstanding checks;C. bank service charges;D. deposit in transit;Company policy for internal control should include all of the following EXCEPT for what?;A. Employees will be rotated.;B. Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks.;C. The owner (or responsible employee. signs all checks after receiving authorization to pay from the departments concerned.;D. At time of payment, all supporting invoices or documents will be stamped "paid.;The bank charged another company's check against our account, this would be included on the bank reconciliation as a(n. __________.;A. addition to the balance per books;B. subtraction from the balance per books;C. addition to the balance per bank;D. subtraction from the balance per bank;Which item(s. will require a journal entry to update the balance in the Cash account?;A. checks outstanding and deposits in transit;B. bank service charges, note collected by the bank, and deposits in transit;C. bank service charges, note collected by the bank, and error made by Accounting Services;D. None of these answers are correct.;A blank endorsement on a check __________.;A. can be further endorsed by someone else;B. cannot be further endorsed by someone else;C. is the safest type of endorsement;D. permits only the original endorser to get the money;The bank statement included bank charges. On the bank reconciliation, the item is __________.;A. an addition to the balance per company books;B. an addition to the balance per bank statement;C. a deduction from the balance per bank statement;D. a deduction from the balance per company books;A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?;A. It is added to the bank balance.;B. It is shown as a debit memo.;C. It is shown as a credit memo.;D. None of these answers are correct.;The journal entry to reverse the entry of a customer's nonsufficient funds check would include a __________.;A. debit to Cash;B. credit to Cash;C. debit to Accounts Payable;D. credit to Accounts Receivable;From the bank reconciliation no entry was recorded for deposits in transit. This would cause __________.;A. assets to be overstated;B. assets to be understated;C. no impact since deposits in transit are already included in the balance per books;D. no impact since deposits are not recorded on the books;The drawee is the __________.;A. person who writes the check;B. bank that drawer has an account with;C. the person to whom the check is payable;D. the person who reconciles the account;Calculate, from the following information the adjusted cash balance at the end of April.;Bank statement ending cash balance $2,000;General ledger cash balance ending 3,250;Bank monthly service charge 45;Deposits in transit 2,500;Outstanding checks 1,500;NSF check returned with bank statement 205;A. $3,000;B. $4,250;C. $4,000;D. $5,500

 

Paper#80412 | Written in 18-Jul-2015

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