{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Final exam review - Name Date 1 Which of the following is a...

Info icon This preview shows pages 1–20. Sign up to view the full content.

View Full Document Right Arrow Icon
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
Image of page 11

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
Image of page 13

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 14
Image of page 15

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 16
Image of page 17

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 18
Image of page 19

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 20
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ' Name: Date: 1. Which of the following is a separate legal entity? A) Proprietorship. B) Sole proprietorship. C) Corporation. D) Partnership. 2. A financial statement that reports accounting data at a specific date is the A) balance sheet. B) retained earnings statement. C) income statement. D) statement of cash flows. 3. If total liabilities decreased by $30,000 during a period of time and owners equity increased by $35,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is a: A) $65,000 increase. B) $5,000 increase. C) $5,000 decrease. D) $65,000 decrease. 4. Current assets are listed: A) alphabetically. B) by importance. C) by longevity. D) by liquidity. 5. To be relevant, accounting information must: A) be capable of making a difference in a decision. B) be presented on the balance sheet. C) be recorded at historical cost. D) improve the company's internal control. 6. Generally accepted accounting principles A) are accounting rules formulated by the Internal Revenue Service. B) are sound in theory but rarely used in real life. C) are accounting rules that are recognized as a general guide for financial reporting. D) have eliminated all errors in accounting. Page 1 7. What organization issues U.S. accounting standards? A) Security Exchange Commission. B) International Accounting Standards Committee. C) International Auditing Standards Committee. D) Financial Accounting Standards Board. 8. The Retained Earnings account had a beginning balance of $60,000 and an ending balance of $70,000. If $20,000 of dividends were declared and paid during the period, net income must have been: A) $20,000. B) $30,000. C) $10,000. D) $50,000. 9. Instructions Match the account titles given below with the appropriate Balance Sheet classification. An individual classification may be used more than once, or not at all. An account may also not appear in the balance sheet. A. Current Assets E. Current Liabilities B. Long-term Investments F. Long—term Liabilities C. Property, Plant and Equipment G. Stockholders' Equity D. Intangible Assets H. Not separately presented on the Balance Sheet Account Titles 1 Common Stock 10 Prepaid Insurance 2 Unearned Rent Revenue 11 Bonds Payable 3 Supplies 12 Taxes Payable 4 Accounts Payable 13 Copyrights 5 Patents 14 Accounts Receivable 6 Salaries Payable 15 Mortgage Payable 7 Equipment 16 Dividends 8 Service Revenue 17 Accumulated Depreciation — Equipment 9 Rent Expense 18 Retained Earnings Page 2 10. Selected information from the financial statements of Miller Company for the year ended December 31, 2010, appears below: 2010 Current assets $ 525,000 Total assets 1,375,000 Current liabilities 150,000 Long—term liabilities 400,000 Net sales 1,500,000 Gross profit 600,000 Net income 150,000 Instructions Answer the following questions relating to the year ended December 31, 2010. The number of shares outstanding at the end of the year was 10,000. Show computations. 1) The current ratio for 2010 is ' . 2) The debt to total assets ratio for 2010 is 3) The working capital for 2010 is 11. The procedure of transferring journal entries to ledger accounts is called A) journalizing. B) ledgering. C) recording. D) posting. 12. For which of the following types of adjusting entries are liabilities overstated and revenues understated before the adjusting entry is made? A) Unearned Revenues B) Accrued Revenues C) Prepaid Expenses D) Accrued Expenses 13. A credit will reduce , but increase A) accounts receivable; accounts payable B) expenses; accounts receivable C) accounts payable; common stock D) common stock; prepaid insurance 14. An accrued expense account represents expenses that have A) been used and paid. B) been paid but not used. C) not been used or paid. D) been used but not paid. Page 3 15. The ledger accounts given below, with an identification number for each, are used by Plunder Company. Instructions: Indicate the appropriate entries for the month of July by placing the appropriate identification number(s) in the debit and credit columns provided. Item 0 is given as an example. Write "none" if no entry is appropriate. 1) Cash 7) Salaries Payable 13) Service Revenue 2) Accounts Receivable 8) Accounts Payable 14) Equipment Expense 3) Supplies 9) Unearned Service Revenue 15) Advertising Expense 4) Prepaid Salaries 10) Notes Payable 16) Supplies Expense 5) Prepaid Advertising 11) Common Stock 17) Rent Expense 6) Equipment 12) Dividends 18) Salaries Expense Entry Account(s) Account(s) No. Date Entgg Information Debited Credited 0 July 1 Stockholders invested $20,000 in the business. 1 ll 1 July 4 Paid a supplier $1,500 cash on account. 2 July 5 Equipment was purchased at a cost of $6,000; a three-month, 6% note payable was signed for this amount. 3 July 8 , Received $3,000 from customers for services rendered. 4 July 10 Plunder agreed to hire C. Limler as a vice- president. She will be paid at the rate of $4,000 monthly, receiving $2,000 on the 15th and 30th of each month. She will begin work June 16. 5 July 14 Paid $500 cash to the Weeky News for advertisements run this past week. 6 July 19 Paid $2,000 in cash to Parson Company for July rent. 7 July 25 Additional office supplies were purchased on account at a cost of $1,000 from Office Supply Company. These supplies will be used during August. 8 July 26 Paid the Weekly News $400 for an advertisement that will run the first week in August. 9 July 27 Received $5,000 from customers for services to be rendered early in August. 10 July 28 Billed customers $6,000 for services rendered but not collected during July. 11 July 31 Paid $800 of dividends to stockholders. 12 July 31 C. Limler was paid $2,000 cash for her salary. Page 4 16. The ledger accounts given below, with an identification number for each, are used by Passive Company. Instructions: Prepare appropriate adjusting entries for the year ended December 31, 2010, by replacing the appropriate identification number(s) in the debit and credit columns provided and the dollar amount in the adjoining column. Item 0 is given as an example. 1) Notes Receivable 10) Unearned Service Revenue 2) Accounts Receivable 11) Notes Payable 3) Interest Receivable 12) Interest Revenue 4) Supplies 13) Service Revenue 5) Prepaid Insurance 14) Depreciation Expense—Equipment 6) Equipment 15) Salaries Expense 7) Accumulated Depreciation—Equipment 16) Interest Expense 8) Salaries Payable 17) Supplies Expense 9) Interest Payable 18) Insurance Expense Account(s) Account(s) Dollar Entry Information Debited Credited Amount 0 Interest of $300 is accrued on a note 3 12 $300 receivable at December 31, 2010. 1 Passive has four employees who earn $120 $ per day per person. At December 31, two days' salaries have been earned but not paid. 2 A customer paid Passive $9,000 on $ December 1, 2010 for services to be rendered during December The receipt was credited to a liability account. 3 Passive purchased equipment costing $ $45,000 on January 1, 2010. Useful life is 3 years and no depreciation has been recorded. 4 Passive provided services to a customer in $ 2010 at a fee of $500. This fee has not yet been received or billed. 5 Passive started the year with no supplies on $ hand. They purchased $5,000 in supplies during the year and have $1,000 on hand at December 31. Supplies were debited to an asset account when purchased. 6 Passive paid $6,000 for a three-year $ insurance policy Page 5 17. 18. 19. on July 1, 2010, debiting an asset account at that time. 7 Passive borrowed $18,000 by signing a $ three—month, 7% interest, note payable on December 1, 2010. 8 Passive purchased marketable securities on $ October 1, 2010. Interest of $300 per month has been earned but not received or recorded prior to December 3 1 . NORMAL BALANCES Instructions: Place a "D" (Debit) or "C" (Credit) in the space provided to indicate whether the account has a normal debit balance (D) or normal credit balance (C). 1) Retained Earnings 6) Common Stock 2) Equipment 7) Unearned Service Revenue 3) Depreciation Expense 8) Accumulated Depreciation 4) Dividends 9) Accounts Payable 5) Service Revenue 10) Prepaid Rent Credit terms of 3/10, n/30 mean that a(n) A) 10% cash discount may be taken if payment is made immediately; a 3% discount if paid within 30 days. . B) 3% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due within 30 days. C) 3% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due at the end of the month. D) additional amount equal to 3% of the invoice price must be paid if payment is not received within 10 days; the account is overdue after 30 days. A periodic inventory system A) allows for the determination of cost of goods sold after each sale. B) requires a physical inventory count to determine the cost of goods on hand. C) requires that detailed inventory records be kept. D) requires the use of a cost of goods sold account. Page 6 20. 21. 22. 23. In accordance with the revenue recognition principle, sales revenues are recorded when A) earned, which typically occurs when the goods are transferred from the seller to the buyer. B) cash is received from the customer for items already delivered. C) an order is received from a customer with delivery of the product expected to take place within the next 30 days. D) the accountant determines which period's income statement "needs" more revenue. In periods of rising prices, LIFO will produce: A) lower net income than FIFO. B) the same net income as FIFO. C) higher net income than FIFO. D) higher net income than average costing. Vintner Company's ending inventory is understated by $3,000. The effect of this error on the current year's cost of goods sold and net income, respectively, are: A) overstated and understated. B) overstated and overstated. C) understated and overstated. D) understated and understated. Goods in transit should be included in the inventory of the A) buyer when the terms are FOB destination. B) buyer when the terms are FOB shipping point. C) transportation company when the terms are FOB destination. D) seller when the terms are FOB shipping point. Page 7 24. The ledger accounts given below, with an identification number for each, are used by West Company. West uses a perpetual inventory system. Instructions: Prepare appropriate entries for the month of August by placing the appropriate identification number(s) in the debit and credit columns provided and the dollar amounts pertaining to each account in the adjoining columns. Item 0 is given as an example. 1) Cash 7) Accounts Payable 2) Accounts Receivable 8) Sales Returns and Allowances 3) Notes Receivable 9) Sales Discounts 4) Merchandise Inventory 10) Sales 5) Office Supplies 11) Cost of Goods Sold 6) Land 12) Freight—out Account(s) Account(s) Debit Credit Entry Information Debited Credited Amount(s) Amount(s) 0 Oct. 1 Sold merchandise for cash 1 10 $500 $500 $5 00. The cost of the merchandise sold was $300. 11 4 300 300 1 Oct. 2 Purchased merchandise from XYZ Co. on account for $4,000; terms 2/10, n/30. 2 Oct. 4 Returned $500 of merchandise Purchased from XYZ Co. on Oct. 2. 3 Oct. 6 Sold merchandise to G. Lender on account for $800, terms 2/10, n/30. G. Lender will pay $50 freight costs per the shipping terms. The merchandise sold cost $480. 4 Oct. 8 Accepted a sales return of defective G. Lender - credit granted was $275. The returned merchandise cost $165. Page 8 5 Oct. 6 Oct. 7 Oct. 8 Oct. 9 Oct. 11 12 19 20 27 Purchased merchandise from Officemate on account for $1,600; terms 1/10, n/30. Paid freight of $250 on the shipment from XYZ Co. per the ‘ shipping terms of purchase on Oct 2. Paid XYZ Co. in full. Paid Officemate in full. Purchased office supplies for $550 cash. 25. Sofa Company, which uses a periodic inventory system, had a beginning inventory on April 1 of 400 units of Product A at a cost of $14 per unit. During April, the following purchases 26. and 561193 April 6 14 21 28 Instructions 9t? mad. \a 250 units at $16 300 units at $18 £5 units at $22 1,350 3 I Sales 1375 units at $15 April 4 270 units 8 360 units 17 400 units 24 fl units 1,265 Compute the April 30 ending inventory and April cost of goods sold under (a) average cost, (b) FIFO, and (c) LIFO. Provide appropriate supporting calculations. (a) Average - Ending Inventory = $ ; Cost of Goods Sold = $ Rodriquez Company uses a periodic inventory system and has the following account balances: Beginning Inventory $45,000, Ending Inventory $60,000, Freight-in $10,000, Purchases $275,000, Purchase Returns and Allowances $8,000, and Purchase Discounts $5,000. Instructions Compute each of the following: (a) Net purchases (b) Cost of goods available for sale (0) Cost of goods sold Page 9 27. 28. 29. 30. Lurid Company reported the following information for 2010: Beginning inventory $ 90,000 Cost of goods sold 400,000 Ending inventory 1 10,000 Net income 40,000 Net sales 525,000 Operating expenses 60,000 Sales 510,000 Instructions Compute each of the following ratios: (a) Gross profit rate (b) Inventory turnover ratio (c) Days in inventory (d) Profit margin ratio The objectives of internal control are to: A) prevent unintentional errors and irregularities. B) safeguard assets and enhance the accuracy and reliability of the accounting records. C) enhance the accuracy and reliability of financial statements. D) safeguard assets and prevent thefts. Lack of agreement between the cash balance per bank and the cash balance per books is due to: A) errors and poor internal control. B) errors and bank memoranda) C) time lags. D) time lags and errors. Texter Company has a balance of $65,000 in Accounts Receivable and a $5,000 credit balance in Allowance for Doubtful Accounts. If a specific customer's account with a balance of $500 is written off as uncollectible, the cash (or net) realizable value of the accounts receivable will be A) $64,500. B) $60,000. C) $65,500. D) $60,500. Page 10 31. 32. Bank Reconciliation Instructions: Given the information provided below, prepare (a) a bank reconciliation in proper format, and (b) the necessary journal entries for the month of February for Nammi Company. 1) Balance per bank on February 28—$19,070 2) Balance per books on February 28—$19,500 3) Total outstanding checks at February 28—$2,500 4) Debit memoranda: a. NSF check from Whig Co.—$320 b. Printing company checks—-$30 c. Payment to bank of $3,200 note owed bank by Nammi plus $210 interest. 5) Credit memorandum: Collection of note receivable for $4,000 plus $200 interest less $100 collection fee. 6) Errors: a. A check written this month to Vance Co. for office supplies cleared the bank at the correct amount of $350, but was recorded at $530. b. The bank charged a $350 check of Foy Company against Namrni's account this month. 7) Deposit in transit on September 30—$3,100. A. ACCOUNTS RECEIVABLE—UNCOLLECTIBLE ACCOUNTS Instructions Present the journal entries specified below; show supporting calculations. Each item should be considered independently. The trial balance of Trickle Company at December 31, 2010, includes the following: Debits Credits Accounts Receivable 100,000 Allowance for Doubtful Accounts 500 Sales (all on credit) 800,000 (1) If Trickle uses the aging method and estimates that $5,000 of receivables will be uncollectible, prepare the adjusting entry. (2) If Trickle estimates uncollectibles at 5% of accounts receivable and the allowance account had a $500 credit balance instead of a $500 debit balance, prepare the appropriate adjusting entry. (3) Assume that on February 10, 2008, the specific account of Ralph Severs with a balance of $400, is deemed uncollectible. Record the write-off. (4) Assume that on May 12, 2008, Severs pays the above balance in full. Record the appropriate entries. Page 1 1 33. 34. 35. 36. NOTES RECEIVABLE Instructions Prepare journal entries to record the following events: June 1 Gourd Company received an 7%, 3-month $10,000 note dated July 1 from a customer for balance due. Sept. 1 The note is honored and no interest has been accrued previously. Sept. 1 Assume instead that the note is dishonored and there is no hope of future collection. Nyguen Company bought real estate, on which there was an old office building, for $900,000. They paid $90,000 in cash as a down payment and signed a 6% mortgage for the remainder. They immediately had the old building razed at a net cost of $30,000, the salvaged materials were sold for $4,200. Attorneys were paid $7,000 in connection with the land purchase and an additional $3,000 in connection with permits and zoning variances necessary for Nyguen's new office building. $25,000 was paid for excavation for the basement of the new building. $2,100,000 was paid for construction of the new building, and $95,000 was paid for a parking lot and necessary walkways and driveways. The new office building should be recorded at: A) $2,100,000. B) $2,128,000. C) $2,125,000. D) $2,100,000. Salvage value is deducted for the initial computation of depreciation expense in all of the following methods with the exception of: A) straight-line. B) units-of—activity. C) declining~balance. D) All of the above include a deduction of salvage value. Northern’s Retail Store regularly makes payments to a state government for the sales taxes resulting from its sales to customers. These sales taxes: A) should appear on Northern’s income statement as an expense. B) are based upon a company’s gross profit in most states. C) are long-term liabilities when they have been paid. D) are collected by Northern’s as an agent for the state’s taxing authority. Page 12 37. 38. 39. Tobo Corp. issued $300,000 of 5%, 5-year bonds at 102 on January 1, 2009. The straight- line method of amortization is used and the bonds pay interest annually on January 1. The amount of bond interest expense that Tobo should report on its 2009 income statement is: A) $16,200. B) $1 3 ,800. C) $1 5,000. D) $14,400. On the Balance Sheet the current portion of long-term debt should: A) be paid immediately. B) be reclassified as a Current liability. C) be classified as a long-term liability. D) not be separated from the long—term portion of debt. Guido Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $18,900. If the sales tax rate is 5%, what amount must be remitted to the state for October's sales taxes? A) $900 B) $945 C) $45 D) It cannot be determined. Page 13 40. Instructions Complete the requirements specified for each of the following independent situations. A. Bass Company acquires a delivery truck at a cost of $28,000 on January 1, 2009. The truck is expected to have a salvage value of $3,000 at the end of its 5—year useful life. Compute annual depreciation for the first and second years using the straight-line method. Year 1 $ Year 2 $ B. Wilde Corporation acquires Equipment at a cost of $37,000 on July 1, 2009. The equipment is expected to have a salvage value of $1,000 at the end of its 6-year useful life. Compute annual depreciation for the first and second years using the straight-line method. Year 1 $ Year 1 $ C. Haggerty Company sold office equipment on July 1, 2006 for a cash price of $150,000. The equipment had a cost of $350,000, a 7-year life, and no estimated salvage value. The equipment was acquired January 1, 2002, and had been depreciated through 2005. Prepare the entries for the sale of the equipment. Page 14 41. 42. 43. ASSET PURCHASES AND DISPOSITIONS 1) On January 1, 2010, Corley Company purchased a copyright for $75,000. The copyright has a usefial life of 20 years. Amortization expense for the first year is $ 2) Boyer Industries purchased equipment costing $48,000 on January 1, 2008. The equipment has a 5-year useful life, $8,000 salvage value, and is being depreciated using the straight-line method. It was sold at a $5,000 ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern