College Accounting A Contemporary Approach 6th International Edition M. David Haddock, John Price, Michael Farina - Solutions

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7. The second step in the accounting cycle is to:a. provide a description of the transaction.b. analyze the transaction.c. journalize the transaction.d. post the transaction.
6. The general ledger organizes accounting information in:a. account order.b. alphabetical order.c. random order.d. chronological order.
5. The general journal organizes accounting information in:a. account order.b. alphabetical order.c. random order.d. chronological order.
4. What is entered in the Posting Reference column of the general journal?a. the ledger account numberb. the date of the transactionc. the amount of the transactiond. a description of the transaction
3. Once an incorrect journal entry has been corrected, the incorrect balance remains in the general ledger accounts.a. Trueb. False
2. If a journal entry that contains an error has been posted, erase the entry and change the posting in the ledger accounts.a. Trueb. False
1. Posting references are made in ledger accounts and in the journal to:a. indicate the entry has been posted.b. ensure against posting the same information twice.c. Both a and b are correct.d. Neither a nor b is correct.
6. Which of the reasons reflected below is the most accurate for including descriptions when making journal entries?a. The audit trail will be more difficult to follow.b. They eliminate the need for recording the transaction.c. They serve as a substitute for recording the transaction.d. The audit
5. In a compound journal entry:a. if two accounts are debited, two accounts must be credited.b. if two accounts are debited, at least one account must be credited.c. total debits must equal total credits.d. Both b and c are correct.
4. The journal is referred to as the:a. record of final entry.b. record of original entry.c. record of permanent entry.d. record of temporary entry.
3. Checks and invoice numbers are included in the journal entry description to:a. validate the transaction.b. provide an audit trail.c. trace information through the accounting system.d. both b and c are correct.
2. A general journal is like a(n):a. address book.b. appointment calendar.c. diary.d. to-do list.
1. The part of the journal entry to be recorded first is the:a. asset.b. credit.c. debit.d. liability.
7. Errors in the Parker Interiors trial balance include all items below except:a. C. Parker, Drawing should be debited.b. Fees Income should be credited.c. total debits and total credits should equal $51,000.d. Equipment should be credited. Parker Interiors Trial Balance December 31, 20X1 Debit
6. The company owner took $5,000 cash for personal use.What is the entry for this transaction?a. debit Cash and credit Caleb Parker, Capitalb. debit Cash and credit Caleb Parker, Drawingc. debit Caleb Parker, Drawing and credit Cashd. debit Caleb Parker, Capital and credit Cash
5. Which account has a normal debit balance?a. Accounts Payableb. Jeffery Wells, Drawingc. Jeffery Wells, Capitald. Fees Income
4. The trial balance includes all of the following except:a. list of all accounts.b. balances of all accounts.c. equality of debits and credits.d. income or loss for the period.
3. An error in which the decimal point is misplaced—for example, when 317 is written as 3.17—is an example of a:a. slide.b. transposition.c. switch.d. summation.
2. An error in which the digits of a number are switched—for example, 571 is recorded as 517—is an example of a:a. switch.b. summation.c. slide.d. transposition.
1. What is the increase side for Cash; Accounts Payable; and Trayton Eli, Capital?a. right, left, right respectivelyb. left, left, left respectivelyc. left, right, right respectivelyd. right, right, right respectively
7. Find the balance of the Cash account.a. $48,200b. $66,900c. $64,000d. $116,000 Cash + 72,000 24,000 44,000 10,000 10,400 4,700
6. Based on the accounts reflected below, the missing value for Equipment for the fundamental accounting equation to be in balance is what amount? Assume that all accounts have normal balances.a. $20,000b. $40,000c. $25,000d. $30,000 Cash—$30,800 Accounts Payable—$20,000 Jack Carter,
5. The Richey Company purchased new equipment for$40,400 from Office Supplies, Inc., to be paid in 30 days.Which of the following is correct?a. Equipment is increased by $40,400; Accounts Payable is decreased by $40,400.b. Equipment is increased by $40,400; Accounts Payable is increased by
4. The normal balance side for asset, liability, and owner’s equity accounts is:a. left, left, right respectively.b. left, right, right respectively.c. right, right, left respectively.d. right, right, right respectively.
3. The normal balance of an account is the:a. decrease side of the account.b. increase side of the account.c. the difference between the left side and right side of an account.d. the difference between the right side and left side of an account.
2. The sum of several entries on either side of an account that is entered in small pencil figures is a:a. calculation.b. summation.c. footing.d. balance.
1. Increases are recorded on which side of asset, liability, and owner’s equity accounts?a. right, left, left respectivelyb. right, right, right respectivelyc. left, right, right respectivelyd. left, right, left respectively
8. All of the following information is contained on the statement of owner’s equity except:a. net income or net loss for the period.b. owner’s equity at the beginning and end of the period.c. withdrawals and additional investments for the period.d. liabilities at the beginning and end of the
7. What information is contained on the balance sheet?a. revenues and expenses for a period of timeb. assets, liabilities, and owner’s equity for a period of timec. revenue and expenses on a specific dated. assets, liabilities, and owner’s equity on a specific date
6. What information is contained in the income statement?a. revenues and expenses for a period of timeb. assets, liabilities, and owner’s equity for a period of timec. revenue and expenses on a specific dated. assets, liabilities, and owner’s equity on a specific date
5. U Fix It Hardware had revenues of $105,000 and expenses of $60,000. How does this affect owner’s equity?a. $90,000 increaseb. $45,000 increasec. $165,000 decreased. $40,000 decrease
4. Home Interiors has assets of $120,000 and liabilities of$45,000. What is the owner’s equity?a. $25,000b. $15,000c. $75,000d. $55,000
3. What information is included in the financial statement headings?a. the owner’s name (who); title of the statement (what);time period covered (when)b. the firm’s name (who); type of business (what); time period covered (when)c. the firm’s name (who); title of the statement (what); time
2. If an owner gives personal tools to the business, how is the transaction recorded?a. This is not a transaction and is not recorded.b. This is a decrease in the owner’s equity in the business.c. This is an additional investment by the owner recorded at the cost of the tools to the owner.d. This
1. What effect do withdrawals have on the basic account equation?a. increase the owner’s equity in the businessb. decrease the owner’s equity in the businessc. increase the liabilities of the businessd. have no effect on the basic accounting equation
8. Zena Brown has the following balances in its assets, liability, and owner’s equity accounts. What is the balance of Cash?Cash ????Office Equipment $ 26,500 Accounts Payable $ 30,300 Zena Brown, Capital $115,700a. $119,500b. $146,000c. $122,500d. $156,000
7. Precision Drilling has the following balances in its assets and liability accounts. What is the balance of Avion Canada, Capital?Cash $175,000 Office Equipment $ 53,500 Accounts Payable $ 27,900 Avion Canada, Capital ????a. $206,200b. $200,600c. $212,400d. $216,200
6. Oriental Rugs has no liabilities. The assets and owner’s equity balances are as follows. What is the balance of Supplies?Cash $150,000 Office Equipment $ 50,000 Supplies ????Johnny Johnson, Capital $230,000a. $15,000b. $20,000c. $30,000d. $40,000
5. Pauline Palmer began a new business by depositing$100,000 in the business bank account. She wrote two checks from the business account: $20,000 for office furniture and $5,000 for office supplies. What is her financial interest in the company?a. $75,000b. $100,000c. $80,000d. $125,000
4. Elizabeth Tolliver purchased a computer for $6,700 on account for her business. What is the effect of this transaction?a. Equipment decrease of $6,700 and Accounts Payable increase of $6,700b. Equipment increase of $6,700 and Accounts Payable increase of $6,700c. Equipment increase of $6,700 and
3. Amounts that a business must pay in the future are known as:a. accounts receivable.b. revenue.c. expense.d. accounts payable.
2. Which transaction below increases an asset and the owner’s equity?a. a purchase of equipment on creditb. a purchase of equipment with cashc. payment of rent with cashd. a sale of merchandise on credit
1. A business transaction is:a. any financial event that changes the resources of the firm.b. any financial event that changes the ownership of the firm.c. any nonfinancial event that changes the resources of the firm.d. any nonfinancial event that changes the ownership of the firm.
7. A limited liability company may choose to be taxed as a partnership or corporation.a. Trueb. False
6. An organization that has two or more owners who are legally responsible for the debts and taxes of the business is a:a. social entity.b. partnership.c. sole proprietorship.d. corporation.
5. You plan to open a business with two of your friends. You would like to form a corporation, but your friends prefer the partnership form of business. All of the following are advantages of the corporation except:a. a corporation is a separate, distinct, legal entity.b. the corporation’s
4. A nonprofit organization such as a public school is a(n):a. social unit.b. economic unit.c. economic entity.d. social entity.
3. Generally accepted accounting principles are developed by the Financial Accounting Standards Board (FASB)through proposed statements and solicitation of feedback from interested individuals, groups, and companies.Subsequently, the FASB evaluates the opinions received and votes on the
2. Generally accepted accounting principles are not needed to ensure that financial information is fairly presented in the operating results and financial positions of firms.a. Trueb. False
1. Generally accepted accounting principles are accounting standards that are changed and refined in response to changes in the environment in which businesses operate.a. Trueb. False
12. Fraud is intentional or reckless acts that result in the confiscation of a firm’s assets or the misrepresentation of the firm’s accounting data.a. Trueb. False
11. All of the following are goals of internal control except:a. policies and procedures to safeguard assets.b. ensuring reliability of accounting data.c. fraud prevention.d. encouraging noncompliance with management policies and applicable laws.
10. All of the following are users of accounting information except:a. owners and managers.b. banks and suppliers.c. search engines on a website.d. tax authorities and regulatory agencies.
9. To become a Certified Bookkeeper, one must meet all requirements below except:a. Pass the national certified bookkeeper exam.b. Sign a code of ethics.c. Pass a criminal background check.d. Submit evidence that you satisfy the experience requirements for the designation.
8. The Certified Bookkeeper exam includes all of the parts below except:a. Business Law.b. Adjustments and Error Corrections.c. Inventory.d. Payroll and Depreciation.
7. The CPA designation stands for:a. Certified Public Analyst.b. Certified Public Appraiser.c. Certified Public Accountant.d. Certified Public Associate.
6. One requirement for becoming a CPA is to pass the:a. Final CPA Examination.b. SEC Accounting Examination.c. Uniform CPA Exam.d. State Board Examination.
5. As the owner of a small business, you have decided to apply for a loan to expand your locations. Information that you most likely will need to provide to the lender include all but:a. current sales and expense figures.b. projected sales and expense figures.c. the cost of the expansion.d. the
4. The organization that has the final say on financial accounting issues faced by publicly owned corporations is the:a. Federal Trade Commission.b. Securities and Exchange Commission.c. Internal Revenue Service.d. U.S. Treasury.
3. Financial statements are:a. accumulated financial data summarized in periodic reports.b. accumulated transactions of the firm’s sales activities.c. a summary of records and procedures that make up the accounting system.d. a summarized description of a firm’s accounting system.
2. Accounting is called:a. the language of economics.b. the language of finance.c. the language of business.d. the language of commerce.
1. The names of three accounting jobs include all but:a. logistics manager.b. accountant.c. bookkeeper.d. accounts payable clerk.
14. The Fashion Rack is a retail merchandising business that sells brand-name clothing at discount prices. The firm is owned and managed by Teresa Lojay, who started the business on April 1, 20X1.This project will give you an opportunity to put your knowledge of accounting into practice as you
13. Ratios are an important part of financial analysis. Divide into groups of two or three. Each person should choose one year from The Home Depot Annual Report in Appendix A. Calculate the current ratio, gross profit percentage, and inventory turnover. Is The Home Depot doing better or worse than
12. McCormick & Company, Inc., is a global leader in the manufacture, marketing, and distribution of spices, seasoning mixes, condiments, and other products to the food industry. McCormick &Company, Inc., reported the following in its 2021 Annual Report:Consolidated Balance Sheet November 30 (in
11. Generally accepted accounting principles require that the principal amount due in the upcoming year on long-term debt be presented as a current liability on the balance sheet. This requires the accountant to make a journal entry to remove the current year’s principal from the long-term
10. Brandon Mandava is the owner of Royal Jewels, a store specializing in gold, platinum, and special stones. During the past year, in response to increased demand, Brandon doubled his selling space by expanding into the vacant building space next door to his store. This expansion has been
9. Programs Plus is a retail firm that sells computer programs for home and business use. Programs Plus operates in a state with no sales tax. On December 31, 20X1, its general ledger contained the accounts and balances shown below:ACCOUNTS BALANCES Cash $ 15,280 Dr.Accounts Receivable 26,600
8. Selected accounts and other information from the records of Caballero Company for the year ended December 31 follow:Merchandise Inventory, January 1 20,000 Merchandise Inventory, December 31 24,000 Sales Returns and Allowances 3,000 Store Supplies Expense 4,000 Sales Salaries Expense 41,000
7. The data below concerns adjustments to be made at Paso Creek Wine Company.INSTRUCTIONS 1. Record the adjusting entries in the general journal as of December 31, 20X1. Use 25 as the first journal page number. Include descriptions.2. Record reversing entries in the general journal as of January 1,
6. Obtain all data that is necessary from the worksheet prepared for Whatnots in Problem 12.5B at the end of Chapter 12. Then follow the instructions to complete this problem.INSTRUCTIONS 1. Record adjusting entries in the general journal as of December 31, 20X1. Use 29 as the first journal page
5. Obtain all data necessary from the worksheet prepared for Gamer’s World in Problem 12.6B at the end of Chapter 12. Then follow the instructions to complete this problem.INSTRUCTIONS 1. Prepare a classified income statement for the year ended December 31, 20X1. The company does not classify its
4. Hog Wild is a retail firm that sells motorcycles, parts, and accessories. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 20X1.INSTRUCTIONS 1. Prepare a classified income statement for the year ended December 31, 20X1. The operating
3. ComputerGeeks.com is a retail store that sells computers, laptops, supplies, and other electronic devices. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 20X1.INSTRUCTIONS 1. Prepare a classified income statement for the year ended
2. Selected accounts and other information from the records of Calderone Company for the year ended December 31 follow:Merchandise Inventory, January 1 $ 20,000 Merchandise Inventory, December 31 22,000 Sales Returns and Allowances 1,000 Store Supplies Expense 3,000 Sales Salaries Expense 30,000
1. The data below concerns adjustments to be made at Tea Leaves Importers.INSTRUCTIONS 1. Record the adjusting entries in the general journal as of December 31, 20X1. Use 25 as the first journal page number. Include descriptions.2. Record reversing entries in the general journal as of January 1,
31. Obtain all data that is necessary from the worksheet prepared for Healthy Eating Foods Company in Problem 12.5A at the end of Chapter 12. Then follow the instructions to complete this problem.INSTRUCTIONS 1. Record adjusting entries in the general journal as of December 31, 20X1. Use 25 as the
30. Obtain all data necessary from the worksheet prepared for Vintage Wines in Problem 12.6A at the end of Chapter 12. Then follow the instructions to complete this problem.INSTRUCTIONS 1. Prepare a classified income statement for the year ended December 31, 20X1. The company does not classify its
29. Good to Go Auto Products distributes automobile parts to service stations and repair shops.The adjusted trial balance data that follows is from the firm’s worksheet for the year ended December 31, 20X1.INSTRUCTIONS 1. Prepare a classified income statement for the year ended December 31, 20X1.
28. Superior Hardwood Company distributes hardwood products to small furniture manufacturers.The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 20X1.INSTRUCTIONS 1. Prepare a classified income statement for the year ended December 31, 20X1.
27. The information below was compiled from the accounting records of First-Class Auto Parts for the year ended December 31, 20X1:Net Sales $ 307,000 Cost of Goods Sold 149,100 Operating Expenses 116,150 Interest Expense 500 Interest Income 1,200 1. Prepare a summarized income statement for
26. W. Tsang Electronics reports the following in its most recent year of operations:■ Net sales, $1,910,500 (all on account)■ Cost of goods sold, $977,500■ Gross profit, $933,000■ Accounts receivable, beginning of year, $220,000■ Accounts receivable, end of year, $270,000■ Merchandise
25. The following selected accounts were taken from the financial records of Livermore Valley Distributors at December 31, 20X1. All accounts have normal balances.Cash $ 32,340 Accounts Receivable 57,900 Note Receivable, due 20X2 10,250 Merchandise Inventory 46,000 Prepaid Insurance 4,350 Supplies
24. The Adjusted Trial Balance section of the worksheet for Henderson Janitorial Supplies follows. The owner made no additional investments during the year. Prepare a postclosing trial balance for the firm on December 31, 20X1.ACCOUNTS Debit Credit Cash $ 31,600 Accounts Receivable 67,800 Allowance
23. Examine the following adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 20X2. Include appropriate descriptions.20X1 (Adjustment a)Dec. 31 Uncollectible Accounts Expense 4,325.00 Allowance for
22. On December 31, 20X1, the Income Statement columns of the worksheet for Jim’s Music Emporium contained the following information. Give the entries that should be made in the general journal to close the revenue, cost of goods sold, expense, and other temporary accounts. Use journal page
21. The worksheet of Lantz’s Office Supplies contains the following asset and liability accounts. The balance of the Notes Payable account consists of notes that are due within a year. Prepare a balance sheet dated December 31, 20X1. Obtain the ending capital for the period from the statement of
20. The worksheet of Lantz’s Office Supplies contains the following owner’s equity accounts. Use this data and the net income determined in Exercise 13.3 to prepare a statement of owner’s equity for the year ended December 31, 20X1. No additional investments were made during the
19. The worksheet of Lantz’s Office Supplies contains the following revenue, cost, and expense accounts. Prepare a classified income statement for this firm for the year ended December 31, 20X1.The merchandise inventory amounted to $59,775 on January 1, 20X1, and $52,725 on December 31, 20X1. The
18. The following accounts appear on the worksheet of New England Crafts at December 31, 20X1.Indicate the section of the classified balance sheet in which each account will be reported.SECTIONS OF CLASSIFIED BALANCE SHEETa. Current Assetsb. Plant and Equipmentc. Current Liabilitiesd. Long-Term
17. The accounts listed below appear on the worksheet of New England Crafts. Indicate the section of the classified income statement in which each account will be reported.SECTIONS OF CLASSIFIED INCOME STATEMENTa. Operating Revenueb. Cost of Goods Soldc. Operating Expensesd. Other Incomee. Other
18. Fuji Company had a current ratio of 2.0 in 20X1 and 2.2 in 20X2. Does this signify an improvement or decline in Fuji Company’s liquidity from 20X1 to 20X2?
17. Jarrett Company’s inventory turnover ratio was nine times in 20X1 and eight times in 20X2. Did Jarrett Company sell its inventory more quickly, or more slowly, in 20X2 compared to 20X1?
16. What are the steps in the accounting cycle?
15. If the owner invests additional capital in the business during the month, how would that new investment be shown in the financial statements?
14. Various adjustments made at Adams Company are listed below. Which of the adjustments would normally be reversed?a. Adjustment for accrued payroll taxes expenseb. Adjustment for supplies usedc. Adjustment for depreciation on the buildingd. Adjustment for estimated uncollectible accountse.
13. On December 31, Klein Company made an adjusting entry debiting Interest Receivable and crediting Interest Income for $300 of accrued interest. What reversing entry, if any, should be recorded for this item on January 1?
12. What types of adjustments are reversed?
11. If the totals of the adjusted trial balance Debit and Credit columns are equal, but the postclosing trial balance does not balance, what is the likely cause of the problem?
10. What types of accounts, permanent or temporary, appear on the postclosing trial balance?

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College Accounting A Contemporary Approach 6th International Edition M. David Haddock, John Price, Michael Farina - Solutions

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