Practice Midterm 2_1

Practice Midterm 2_1 - The actual midterm 2 will likely...

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The actual midterm 2 will likely vary from this format and content. Practice Midterm 2 BUSACC 0030 Part I Multiple Choice Questions (30 points) 1.Harris Company issued 10,000 shares of its common stock for cash. The journal entry to record the stock issue would include A) a credit to Cash. B) a debit to Common Stock. C) a credit to Common Stock. E) a credit to Retained Earnings. 2. Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works estimated that $5,000 of the current $98,000 of accounts receivable would be uncollectible. The allowance for doubtful accounts had a $400 credit balance at year-end prior to adjustment. The amount of bad debt expense that should appear in Rosco's income statement for the year is A) $5,000. B) $5,400. C) $4,600. D) $0. 3. The books of Tweed Company provided the following information: Beginning balances: Accounts receivable $ 50,000 Allowances for doubtful accounts (a credit) 3,000 Transactions during the year: Sales revenue (of which 1/2 were on credit) 2,000,000 Collections on accounts receivable 980,000 Accounts written off as uncollectible 4,000 Past collection experience has indicated that 1% of credit sales normally is not collected. Therefore, an adjusting entry for bad debt expense should be made in the amount of A) $10,000. B) $20,000. C) $ 7,000. D) $ 500.
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4. The Walt Disney Company reported revenue of $25,269 million for 2001. Their accounts receivable balance was $3,343 million in 2001 and $3,599 million in 2000. Cash collected from customers equals A) $25,013 B) $21,926 C) $25,525 D) None of the above 5. The following information was available to the accountant of Zolo Company when preparing the monthly bank reconciliation: Outstanding checks: #643 for $ 620 #651 for 45 Bank service charges $ 30 Deposits in transit $ 150 Customer note receivable collected by bank $ 300 Cash balance per bank statement $1,055 Cash balance per books (prior to reconciliation) $ 270 The corrected cash balance following completion of the reconciliation was A) $695. B) $635. C) $690. D) $540. 6. Retail Company reported the following amounts on its 20D income statement: Purchases, $80,000; Beginning 20D inventory, $25,000; and Cost of goods sold, $90,000. Therefore, the 20D ending inventory was A) $10,000 B) $25,000 C) $15,000 D) $27,000 7. The following information was taken from the 20B income statement of Milburn Company: Pretax income, $12,000; Total operating expenses, $20,000; Sales revenue, $120,000. Compute cost of goods sold. A) $ 88,000. B) $100,000. C) $108,000. D) $112,000.
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8. When prices are rising: A) LIFO will result in lower net income and a higher inventory valuation than will FIFO. B) LIFO will result in higher net income and lower inventory valuation than will FIFO.
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Practice Midterm 2_1 - The actual midterm 2 will likely...

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