Questions and Answers of Glencoe Accounting First Year Course

The totals of the payroll register for Kits & Pups Grooming are shown in your working papers. On December 31 the owner, Abe Shultz, wrote Check 1400 to pay the payroll.Instructions In your
Job Connect pays its employees twice a month. Employee earnings and tax amounts for the pay period ending December 31 are: Instructions In your working papers:1. Prepare Check 1602 (payable
Record the following transactions in T-account form in your working papers for Sharp Shot Camera Shop. A partial chart of accounts follows: General Ledger Cash in Bank Accounts Receivable Merchandise
Imagine that you work as an accounting clerk for a fast-food franchise like Taco Bell. You have accessto all of the accounting records for the business.A friend of yours has promised to hire you as
You and your best friend, Inga Swenson, graduated from a prestigious art school. You have a degree in art history and business management; Inga has a degree in fine art. Inga is an award-winning
a. Contrast a service business and a merchandising business.b. What are the two types of merchandising businesses?
InstructionsFor each of the following plant assets:1. calculate the amount to be depreciated,2. calculate the annual depreciation expense using the straight-line method,3. calculate the depreciation
a. What accounts are used when a business purchases merchandise on account?b. What type of account is Transportation In?
Which problem do you think is more serious in a change fund: cash short or cash over? Why?
Vasquez Construction uses the percentage of sales method to estimate uncollectibles. Net credit sales for the current year amount to $500,000 and management estimates 2% will be uncollectible.
a. What is the first journal entry made when a customer pays an amount that was previously written off? Name the accounts debited and credited for both methods.b. In the second journal entry, which
The accounting document that provides a basis for recording payroll transactions isa. The payroll register.b. The employee earnings records.c. The general ledger.d. The general journal
In your working papers, record the following transactions of Alpine Ski Shop on page 2 of the general journal. Use the following accounts: General Ledger Cash in Bank Accounts Receivable Sales
Cycle Tech Bicycles had the following cash payment transactions in March.Instructions In your working papers, record the transactions on page 19 of the general journal. Date Transactions Mar. 1
a. When are sales transactions posted to the accounts receivable subsidiary ledger? Why?b. When are transactions in the cash receipts journal posted to the accounts receivable subsidiary ledger? Why?
a. What is a footing?b. Which columns in the sales journal are double-ruled? What does the double rule indicate?
The schedule of accounts receivable total does not agree with the general ledger’s Accounts Receivable balance. Develop a plan to locate the error(s).
a. What are the source documents for the purchases journal?b. What are the source documents for the cash payments journal?
a. List the steps to record transactions in the purchases journal.b. Bank service charges are automatically deducted from the bank account. Why are these charges recorded in the cash payments journal?
Write the letter for the correct journal used to journalize each transaction.a. Purchases Journalb. Cash Receipts Journalc. Cash Payments Journald. General Journale. Sales JournalPurchased
Your test for the equality of debits and credits of the purchases journal does not balance. Explain how you would go about finding the error(s).
a. Where do you find the information for recording payroll transactions in the cash payments journal?b. In recording payroll, what four liabilities are entered in the General Credit column of the
Use the following choices for questions 2–4. Write the letter for the correct journal used to journalize each transaction.a. Purchases Journalb. Cash Receipts Journalc. Cash Payments Journald.
a. When are purchases transactions posted to the accounts payable subsidiary ledger? Why?b. When are cash payments transactions posted to the accounts payable subsidiary ledger? Why?
Use the following choices for questions 2–4. Write the letter for the correct journal used to journalize each transaction.a. Purchases Journalb. Cash Receipts Journalc. Cash Payments Journald.
a. When totaling, proving, and ruling the purchases journal, where are the double rules placed?b. What does the check mark (✓) in the first Posting Reference column indicate?
a. How are stockholders’ equity and owner’s equity similar?b. What is retained earnings?
Many countries use decimal points instead of commas to separate thousands and use a comma instead of a decimal point as a decimal marker. For example the number 45,255.08 becomes
The general ledger accounts for River’s Edge Canoe & Kayak as of December 31, the end of the period, appear in the working papers.Instructions In your working papers:1. Prepare a trial
Earnings distributed to stockholders are calleda. Retained earnings.b. Revenue.c. Capital gains.d. Dividends.e. None of these answers
What is a publicly held corporation?
Cyber Café is a retail store that sells a variety of coffees, gourmet pastries, and other snacks. The store also offers computer stations where customers can surf the Web.Early success helped the
You work for a locally owned partnership that was just purchased by a corporation. You decide to share information about corporations with your coworkers. Create a one-page information sheet
Dublin Corporation was organized and authorized to issue 10,000 shares of $100 par, preferred 8% stock and 500,000 shares of $10 par common stock. The three transactions recorded in the following T
You are an accountant for a large shipping company, like United Parcel Service (UPS). Through your work, you learn that your company is planning to buy a company that makes shipping containers.
For each key term, give or find an example of the term in a newspaper, periodical, annual report, or on an Internet site. Then use the example in a sentence. authorized capital stock board of
a. Name three characteristics of a corporation. b. Explain the difference between a closely held corporation and a publicly held corporation.
________ stock is the type of stock issued by a corporation when only one class of stock is issued.a. Preferredb. Commonc. Capitald. Dividend
Describe the components of stockholders’ equity.
Annabelle Bradly owns Aussie Diners in Australia and North America. The corporation is considering going public and offering common stock on the New York Stock Exchange. She calls you to invite the
During its first year of operation, Longhorn Corporation issued 17,500 shares of $10 par common stock. At the end of the year, the corporation had a net income of $350,000. The board of directors
a. When stock is sold at a price above its par value, what amount is credited to the capital stock account?b. What is the classification of the Paid-in Capital in Excess of Par account? What is its
When 10,000 shares of $10 par-value common stock are issued at $14 per share, Paid-In Capital in Excess of Par, Common Stock is credited for a.$140,000.b. $40,000.c. $100,000.d. None of the above
Summarize the accounting entries when a corporation sells 200 shares of 9% preferred stock, with a par value of $100, for $125 per share.
The World Federation of Exchanges (WFE) is the trade organization for regulated securities markets and organizations that serve the industry. Over 97 percent of the world’s exchanges belong to the
This memorandum contains data about the first quarter dividend on the common stock of Rob Williams Thrift Market Inc.Instructions Prepare the journal entries to record the following in your
a. When a dividend is declared, which accounts are debited and which accounts are credited?b. Name and explain the three dates important to the dividend process.
When a dividend is paid in cash, the accounts debited and credited area. Dividends Received and Dividends Payable.b. Cash and Dividends Payable.c. Dividends Payable and Cash.d. Common Stock and Cash.
Compare and contrast preferred and common stock.
In some ways your future depends on how well you plan for financial security. You can make wiser investment decisions when you know the choices available.PERSONAL FINANCE ACTIVITY Use the
The following transactions of Victor Jewelry Corporation took place during the period.Instructions Use the form in your working papers to indicate which of the transactions is reported on the
a. What type of information is reported on the statement of stockholders’ equity?b. Explain the difference between the statement of retained earnings and the statement of stockholders’ equity.
A legal form that asks stockholders to transfer their voting rights is called aa. Security.b. Proxy.c. Preemptive right.d. Stock split.
Write a rule expressing when a dividend becomes a liability for a corporation. Explain the reason for the rule.
The statement of stockholders’ equity provides details about changes in the stockholders’ equity accounts during the period. This information helps investors and analysts better understand the
During the first year of operations, Sunset Surfwear issued 18,500 shares of $10 par common stock. At the end of the year, the corporation had net income of $380,000. The board of directors declared
Justify the fact that corporations that sell their stock for an amount in excess of par cannot record the excess as profit.
On June 1 InBeat CD Shop was incorporated and authorized to issue 1,000 shares of $100 par, preferred 9% stock, and 10,000 shares of $25 par common stock.Instructions In your working papers,
Shutterbug Cameras issued 8,000 shares of $80 par, preferred 7% stock and 35,000 shares of $25 par common stock.Instructions In your working papers:1. Record the following transactions on
River’s Edge Canoe & Kayak is authorized to issue 10,000 shares of $100 par, preferred 9% stock and 500,000 shares of $5 par common stock. The following balances appeared in the Balance Sheet
Buzz Newsstand is authorized to issue 100,000 shares of $5 par common stock and 5,000 shares of $100 par, preferred 8% stock. On January 1, the beginning of the period, the stockholders’ equity
The change fund for Messina’s Grocery Store is $200 per cash register. On March 31 total cash sales from cash register 6 are $964 and sales taxes are $57.84. A count of cash shows $1,216.84 in the
a. What is a change fund?b. Which accounts are debited and credited when a change fund is established?
As the financial manager of The Tennis Center, you believe a petty cash fund should be established. Using these terms, prepare a one-page memorandum to convince your boss, Megan Long, to open a petty
An amount of cash kept on hand and used for making small payments is called a. revenue. b. cash. c. petty cash. d. prepaid interest. c. none of these answers
What form is used to control payments from the petty cash fund?
The Healthy Alternative sells vitamins and natural health-care products. It has two electronic cash registers that track inventory and record sales directly to the computerized accounting system. The
You are the petty cashier for a local theater group. Its petty cash fund pays for taxi fares to and from the airport for actors, directors, and set designers. Today you forgot to bring cash for your
Retro Threads sells designer vintage clothing on consignment. The shop is open only on Fridays and Saturdays and does a brisk business. You maintain the accounting records for the shop. Dorothy
The change fund for Visions Hair Salon is $300 per register. On April 14, at the end of the business day, the manager counts the funds in the register. Cash sales total $1,496 and sales taxes amount
A form showing proof of a petty cash payment is a a. check. b. petty cash slip. c. petty cash check stub. d. journal.
a. When is the amount in the cash register proved?b. How is the cash register proof performed?
What happens to cash in a cash register drawer at the end of a business day?
Fun Farm is a hands-on, educational working farm where elementary students learn about planting crops and raising animals. In auditing its petty cash fund, you notice some unusual disbursements and
The petty cash clerk for Riddle’s Card Shop prepared the accompanying petty cash requisition. Instructions Review the document and prepare Check 973 to replenish the petty cash fund in
a. Why would a business set up a petty cash fund?b. Explain the procedure for replenishing the petty cash fund.
A petty cash on hand amount that is more than a recorded amount is called a. cash over. b. cash short. c. cash credit. d. cash debit.
You are the petty cashier responsible for the petty cash fund. You counted the cash in the petty cash box and found that you will likely run out of petty cash soon. What would you do to restore the
When Kenya suffered a severe drought in 2000, the International Monetary Fund (IMF) helped with a $52 million loan. The IMF helps promote a healthy world economy through exchange rate stability, the
On February 1 Sunset Surfwear issued Check 115 to establish a change fund of $150. At the end of the business day on February 2, the shop’s cash register tape showed cash sales of $340 plus sales
a. Which accounts are debited and credited to establish a petty cash fund?b. To whom is the check to establish a petty cash fund made payable?
The entry to replenish the petty cash fund requires Debit a. Petty Cash Fund b. Petty Cash Expense c. Cash d. Various Expense accounts Credit Cash Petty Cash Fund Petty Cash Fund Cash
How do you find out whether a petty cash fund amount is short or over?
You should track your cash daily to be aware of the cash you have at the start and end of each day. If the amounts differ, you should have receipts for expenses or estimate where the remainder went
InBeat CD Shop established a petty cash fund for $100.Instructions1. In your working papers, record the entry to establish the petty cash fund on page 6 of a general journal.2. Record the entry for
Michelle is a cashier for The Pet Store. When she counted the cash in her register drawer at the end of the day, the total was $959.74. According to the electronic register, she should have had a
a. What is a petty cash requisition?b. Explain how to prepare a petty cash requisition.
To decide whether to buy stock, analysts and investors look at stock prices over time and calculate the price-earnings (PE) ratio. It compares a stock’s current market value with its earnings per
Summarize the steps involved in replenishing the petty cash fund. What are the source document(s) for recording the journal entry, and which account(s) is (are) used to make the journal entry?
Shutterbug Cameras, a camera store, decided to establish a petty cash fund. On February 1 the accountant, Al Rosen, issued Check 1018 for $70 to establish the fund. The following disbursements were
Cycle Tech Bicycles decided to establish a petty cash fund. On February 1 the accountant issued Check 3724 for $120 to establish the fund. The following disbursements were made.Instructions1. In your
a. What information is included on each line of the petty cash register?b. Why is the petty cash register not considered a journal?
River’s Edge Canoe & Kayak petty cash fund was established on February 1 for $100, by writing check 1763. The accounts for which petty cash disbursements are likely to be made include Supplies,
a. What is meant by reconciling the petty cash fund?b. What accounts are debited when replenishing a petty cash fund?
a. When does a cash shortage occur?b. Explain why a cash shortage is treated like an expense.
On February 1 a petty cash fund of $150 was established for Buzz Newsstand, Check 1198. The petty cashier writes a voucher for each petty cash disbursement. The vouchers are entered in a petty cash
You have just been hired as the plant accountant for Fast Runner, a large manufacturer of inline skates and skate boards. To do your job well, you must be able to understand and apply accounting
a. Explain the meaning of the term plant asset.b. Give four examples of plant assets.
A truck used in daily operations of a corporation would be considered a(n) a. long-term asset. b. plant asset. c. intangible asset. d. either A or B. e. none of these answers
Name several plant assets that a business might use to sell merchandise.

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