PLEASE ANSWER ALL QUESTIONS, ONLY 10 MULTIPLE CHOICE

91. After preparing a bank reconciliation, adjustments must be made for items reconciling the bank balance. True or False?

92. Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges. True or False?

93. The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense.

Accounts receivable	$	435,000	Debit
Allowance for Doubtful Accounts		1,250	Debit
Net Sales		2,100,000	Credit

All sales are made on credit. Based on past experience, the company estimates 1% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Multiple Choice

a. Debit Bad Debts Expense $19,750; credit Allowance for Doubtful Accounts $19,750.

b. Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225.

c. Debit Bad Debts Expense $22,250; credit Allowance for Doubtful Accounts $22,250.

d. Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350.

e. Debit Bad Debts Expense $21,000; credit Allowance for Doubtful Accounts $21,000.

94. Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. What journal entry would be needed to record the machines' first year depreciation under the units-of-production method?

Multiple Choice

a. Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800.

b. Debit Depletion Expense $29,025; credit Accumulated Depletion $29,025.

c. Debit Depreciation Expense $29,025; credit Accumulated Depreciation $29,025.

d. Debit Depreciation Expense $25,800; credit Accumulated Depreciation $25,800.

e. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000.

95. In applying the lower of cost or market method to inventory valuation, market is defined as:

Multiple Choice

a. Historical cost.

b. Current replacement cost.

c. Current sales price.

d. FIFO.

e. LIFO

96. Credit terms of 2/10, n/30 imply that the seller offers the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date. Otherwise, the full amount is due in 30 days. True or false?

97. A debit to Sales Returns and Allowances and a credit to Accounts Receivable:

Multiple Choice

a. Reflects an increase in amount due from a customer.

b. Recognizes that a customer returned merchandise and/or received an allowance.

c. Records the cost side of a sales return.

d. Is recorded when a customer takes a discount.

e. Reflects a decrease in amount due to a supplier.

98. A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:

Multiple Choice

a. A $1,800 credit to Common Stock.

b. A $300 debit to Organization Expenses.

c. A $1,300 credit to Paid-in Capital in Excess of Par Value, Common Stock.

d. A $1,800 debit to Legal Expenses.

e. A $1,800 credit to Cash.

99. Sweet Companys outstanding stock consists of 1,000 shares of noncumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

	Dividend Declared
year 1	$	2,000
year 2	$	6,000
year 3	$	32,000

The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Multiple Choice

a. $15,000 preferred; $25,000 common.

b. $11,000 preferred; $29,000 common.

c. $5,000 preferred; $35,000 common.

d. $12,000 preferred; $28,000 common.

e. $10,000 preferred; $30,000 common.

100. Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 0.5% of sales, what is the amount of the bad debts expense adjusting entry?

Multiple Choice

a. $4,625

b. $3,960

c. $5,290

d. $4,750

e. $4,825