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Question 12 pts

Net income will result when

revenues (credits) > expenses (debits)

revenues (debits) > expenses (credits)

expenses (credits) = revenues (debits)

revenues (credits) = expenses (debits)

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Question 22 pts

The payment for the monthly rent will require which of the following entries?

debit Cash and debit Rent Expense

credit Cash and credit Rent Expense

debit Rent Expense and credit Cash

credit Rent Expense and debit Cash

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Question 32 pts

The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a:

credit to Accounts Receivable for $500

credit to Accounts Receivable for $1,000

credit to Accounts Payable for $500

credit to Accounts Payable for $1,000

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Question 42 pts

When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial balance will be

zero

twice the amount of the transposition

one-half the amount of the transposition

divisible by 9

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Question 52 pts

In accordance with the debit and credit rules, which of the following is true?

Debits increase assets.

Credits increase assets.

Debits increase both assets and capital.

Credits increase both assets and liabilities.

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Question 62 pts

A cash payment is recorded in the cash account as

neither a debit or a credit

a credit

a debit

either a debit or a credit

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Question 72 pts

Which of the following entries records the payment of insurance for the current month?

Cash, debit; Insurance Expense, credit

Insurance Expense, debit; Cash, credit

Insurance Expense, debit; Accounts Receivable, credit

Prepaid Insurance, debit; Cash, credit

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Question 82 pts

Which of the following will increase owners equity?

expenses > revenues.

the owner draws money for personal use

revenues > expenses.

cash is received from customers on account

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Question 92 pts

The balance in the supplies account before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

debit Supplies, $1,500; credit Supplies Expense, $1,500

debit Supplies Expense, $4,750; credit Supplies, $4,750

debit Supplies Expense, $1,500; credit Supplies, $1,500

debit Supplies, $4,750; credit Supplies Expense, $4,750

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Question 102 pts

What is the purpose of the adjusted trial balance?

to verify that all of the adjusting entries have been posted

to verify that the net income (loss) is correctly reported

to verify that no adjusting journal entry has been omitted

to verify that the debits and credits balance

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Question 112 pts

Which of the following is an example of an accrued expense?

salary owed but not yet paid

fees received but not yet earned

supplies on hand

a two-year premium paid on a fire insurance policy

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Question 122 pts

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

prepaid

deferred

accrued

matched

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Question 132 pts

Two income statements for Toby Sam Enterprises are shown below:

Toby Sam Enterprises Income Statement For the Years 2 and 1 Ending December 31
	Year 2	Year 1
Fees earned	$674,350	$520,600
Operating expenses	472,045	338,390
Operating income	$202,305	$182,210

Prepare a vertical analysis of Toby Sam Enterprises income statements. Has operating income increased or decreased as a percentage of revenue?

increased by 5%

increased by 111%

decreased by 5%

decreased by 111%

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Question 142 pts

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,000 that expired. For the year ending December 31, what is the effect of these errors on revenues, expenses, and net income?

revenues are overstated by $4,200

net income is overstated by $2,300

expenses are overstated by $6,500

expenses are understated by $3,500

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Question 152 pts

Which of these accounts would appear in the Balance Sheet?

Consulting Revenue

Prepaid Insurance

Rent Expense

Fees Earned

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Question 162 pts

The statement of owners equity should be prepared

before the income statement and after the balance sheet

before the income statement and balance sheet

after the income statement and balance sheet

after the income statement and before the balance sheet

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Question 172 pts

Use the adjusted trial balance for Stockton Company below to answer the questions that follow.

Stockton Company
Adjusted Trial Balance
December 31
Cash	6,530
Accounts Receivable	2,100
Prepaid Expenses	700
Equipment	13,700
Accumulated Depreciation		1,100
Accounts Payable		1,900
Notes Payable		4,300
Bob Steely, Capital		12,940
Bob Steely, Withdrawals	790
Fees Earned		9,250
Wages Expense	2,500
Rent Expense	1,960
Utilities Expense	775
Depreciation Expense	250
Miscellaneous Expense	185
Totals	29,490	29,490

Determine the owners equity ending balance.

$12,150

$15,730

$6,480

$21,400

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Question 182 pts

Which of the following would appear in the Income Statement?

Cash

Prepaid Insurance

Unearned Revenue

Net Loss

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Question 192 pts

The accounting cycle requires three trial balances be done. In what order should they be prepared?

post-closing, unadjusted, adjusted

unadjusted, post-closing, adjusted

unadjusted, adjusted, post-closing

post-closing, adjusted, unadjusted

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Question 202 pts

Accumulated Depreciation appears on the

balance sheet in the current assets section

balance sheet in the property, plant, and equipment section

balance sheet in the long-term liabilities section

income statement as an operating expense

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Question 212 pts

A cash purchase of supplies should be recorded in the

cash receipts journal

purchase journal

general journal

cash payments journal

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Question 222 pts

Which of the following journals is called an all-purpose journal?

general journal

purchases journal

revenue journal

accounting journal

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Question 232 pts

What is meant by the term B2C?

balance to cash

business to cash

book to capital

business to consumer

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Question 242 pts

Month-end postings to control accounts in a computerized accounting system are not required because

control accounts are not used in computerized systems

transactions are posted to accounts immediately

the input operator can choose to post to accounts at any time

transactions are posted at the end of the financial year

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Question 252 pts

The subsidiary ledger that includes customer account activity is called the

asset ledger

accounts payable ledger

expense ledger

accounts receivable ledger

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Question 262 pts

The primary ledger containing all the balance sheet and income statement accounts is the

general ledger

creditors ledger

customers ledger

subsidiary ledger

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Question 272 pts

The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be

Jan. 1 Merchandise Inventory 1,500 Cash 1,500

Jan. 1 Office Supplies 1,500 Cash 1,500

Jan. 1 Purchases 1,500 Accounts Payable 1,500

Jan. 1 Cash 1,500 Accounts Receivable 1,500

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Question 282 pts

Jacob Co. sells merchandise on credit to Isaiah Co. in the amount of $9,700. The invoice is dated on May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

$194, May 15

$194, May 16

$97, May 15

$97, May 16

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Question 292 pts

Which of the following accounts will only be found in the chart of accounts of a merchandising company?

Sales

Accounts Receivable

Merchandise Inventory

Accounts Payable

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Question 302 pts

The arrangements between buyer and seller as to when payments for merchandise are to be made are called

credit terms

net cash

cash on demand

gross cash

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Question 312 pts

Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record payment of the merchandise if Isabella Co. pays within the discount period?

Accounts PayableEmma Co., debit $15,000; Cash, credit $15,000

Accounts PayableEmma Co., debit $15,450; Cash, credit $15,450

Accounts PayableEmma Co., debit $15,000; Freight In, debit $750; Cash, credit $15,750

Accounts PayableEmma Co., debit $15,750; Merchandise Inventory, debit $300; Cash, credit $16,050

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Question 322 pts

What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?

gross profit

income from operations

net income

gross sales

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Question 332 pts

All of the following are documents used for inventory control except

a petty cash voucher

a vendor's invoice

a receiving report

a purchase order

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Question 342 pts

Use the information below to answer the following questions. The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 3	Purchase	5	$20
10	Sale	3
17	Purchase	10	$24
20	Sale	6
23	Sale	3
30	Purchase	10	$30

Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.

$108

$120

$72

$180

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Question 352 pts

Which of the following will be the same amount regardless of the cost flow assumption adopted?

number of items ordered

gross profit

cost of goods sold

ending merchandise inventory

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Question 362 pts

Which of the following is not an example for safeguarding inventory?

Storing inventory in restricted areas.

Physical devices such as two-way mirrors, cameras, and alarms.

Matching receiving documents, purchase orders, and vendors invoice.

Returning inventory that is defective or broken.

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Question 372 pts

Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period?

inventory turnover

fixed asset turnover

retail method of inventory costing

gross profit method of inventory costing

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Question 382 pts

The following lots of a particular commodity were available for sale during the year:

Beginning inventory	5 units at $61
First purchase	15 units at $63
Second purchase	10 units at $74
Third purchase	10 units at $77

The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year.

What is the amount of cost of good sold for the year according to the average cost method?

$1,380

$1,375

$1,510

$1,250

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Question 392 pts

The objectives of internal control are to

control the internal organization of the accounting department personnel and equipment

provide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with

prevent fraud, and promote the social interest of the company

provide control over "internal-use only" reports and employee internal conduct

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Question 402 pts

Internal control does not consist of policies and procedures that

protect assets from misuse

ensure employees and managers comply with laws and regulations

guarantee the company will earn a profit

ensure that business information is accurate

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Question 412 pts

Which of the following would be subtracted from the balance per bank on a bank reconciliation?

outstanding checks

deposits in transit

notes collected by the bank

service charges

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Question 422 pts

Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Calculate the adjusted cash balance per books on May 31.

Cash balance per books, 5/31	$5,400
Deposits in transit	375
Notes receivable and interest collected by bank	650
Bank charge for check printing	40
Outstanding checks	2,400
NSF check	140

$5,870

$6,245

$4,930

$3,845

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Question 432 pts

An element of internal control is

risk assessment

journals

subsidiary ledgers

controlling accounts

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Question 442 pts

"To maintain public confidence and trust in the financial reporting of companies" is the purpose of

the FASB

the IRS

Sarbanes-Oxley

GAAP

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Question 452 pts

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

Uncollectible Accounts Expense

Accounts Receivable

Allowance for Doubtful Accounts

Interest Expense

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Question 462 pts

Miles uses the allowance method and wrote off the account of James. Miles then received $559 as partial payment on the account of James. The journal entry to record the initial write-off includes a

debit to Allowance for Doubtful Accounts

credit to Cash

debit to Accounts Receivable, James

credit to Bad Debt Expense

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Question 472 pts

On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the

uncollectible accounts expense for the year

total of the accounts receivables written-off during the year

total estimated uncollectible accounts as of the end of the year

sum of all accounts that are past due

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Question 482 pts

To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a

debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts

debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts

debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable

debit to Loss on Credit Sales and a credit to Accounts Receivable

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Question 492 pts

Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,000. Based on the estimate above, which of the following adjusting entries should be made?

debit Bad Debt Expense, $800; credit Allowance for Doubtful Accounts, $800

debit Bad Debt Expense, $15,200; credit Allowance for Doubtful Accounts, $15,200

debit Allowance for Doubtful Accounts, $800; credit Bad Debt Expense, $800

debit Bad Debt Expense, $16,800; credit Allowance for Doubtful Accounts, $16,800

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Question 502 pts

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

affects only income statement accounts

is not an acceptable practice

affects only balance sheet accounts

affects both balance sheet and income statement accounts