Reference no: EM13216044

31. The journal entry to record the purchase of equipment for a $100 cash down payment and abalance of $400 due in 30 days would include

A) a debit to Equipment for $100 and a credit to Cash for $100.

B) a debit to Equipment for $500, a credit to Cash for $100, and a credit to Accounts Payable for $400.

C) a debit to Equipment for $100 and a credit to Accounts Payable for $400.

D) debit to Equipment for $500 and a credit to Cash for $500.

 

32. The journal entry 

to record the payment of the current month utility bill would include

A) a debit to Utilities Expense and a credit to Stock.

B) a debit to stockholders’ equity and a credit to Cash.

C) a debit to Utilities Expense and a credit to Cash.

D) a debit to Utilities Expense and a credit to Accounts Payable.

 

33. The journal entry to record the payment of dividends for the month is:

A) a debit to Common Stock and a credit to Cash.

B) a debit to cash and a credit to dividends.

C) a debit to dividends and a credit to Cash.

D) a debit to dividends and a credit to common stock.

 

34. The journal entry to record the payment of salaries should include

A) debit to Salaries Expense and a credit to Cash.

B) a debit to Stock and a credit to Cash.

C) a debit to Cash and a credit to Salaries Expense.

D) a debit to Salaries Expense and a credit to Accounts Payable.

 

35. On a balance sheet, Accumulated Depreciation—Equipment is reported

A) as a deduction from the cost of the equipment.

B) as a liability.

C) as an expense.

D) as a deduction from the total of the asset

 

36. If the prepaid expenses are not adjusted, assets on the balance sheet

A) will be overstated.

B) will be understated.

C) will not be affected.

D) may be either overstated or understated.

 

37. If long-term assets are not adjusted, expenses on the income statement

A) will be overstated.

B) will be understated.

C) will not be affected.

D) may be either overstated or understated.

38. The entry to replenish a petty cash fund includes

A) a debit to Cash and a credit to Petty Cash.

B) a debit to Petty Cash Fund and a credit to Cash.

C) debits to various expense accounts and a credit to Petty Cash Fund.

D) debits to various expense accounts and a credit to Cash.

39. On May 1, 20--, a firm purchased a 1-year insurance policy for $1,800 and paid the full premium in advance. The insurance expense associated with this policy for 20—is

A) $600.

B) $1,200.

C) $1,800.

D) $1,050.

 

40. To arrive at an accurate balance on a bank reconciliation statement, outstanding checks should be

A) added to the bank statement balance.

B) added to the book balance.

C) deducted from the bank statement balance.

D) deducted from the book balance

 

41. A firm appropriately wrote a check for $78 but entered the amount as payment of $87. On a bank reconciliation statement this error would be shown as 

A) deduction of $9 from the book balance.

B) an addition of $9 to the book balance.

C) a deduction of $9 from the bank statement balance. 

D) an addition of $9 to the bank statement balance. 

42. The entry to record a purchase of merchandise on credit using a perpetual inventory system Includes A) a debit to Merchandise Inventory and a credit to Accounts Payable. 

B) a credit to Merchandise Inventory and a debit to Accounts Payable. 

C) a debit to Accounts Payable and a credit to Purchases. 

D) a debit to Purchases (COGS) and a credit to Accounts Payable. 

 

43. A firm that sells a single product had a beginning inventory of 4,000 units with a total cost of $28,000. Early in the year, 10,000 units were purchased at $9 each. Using FIFO, what is the value of the ending inventory of 3,000 units? 

A) $27,000

B) $24,000 

C) $21,000 

D) $36,000 

 

44. A firm that sells a single product had a beginning inventory of 4,000 units with a total cost of $16,000 Early in the year, 8,000 units were purchased at $6 each. Using LIFO, what is the value of the ending inventory of 2,000 units? 

A) $12,000 

B) $10,000 

C) $8,000 

D) $24,000

 

45. Which of the following is allowed under generally accepted accounting principles?

A) A company was offered $60,000 for land that it had purchased for $15,000. The company did not sell the land but increased the Land account to $60,000.

B) An owner lists the full cost of his or her personal automobile, which is occasionally used for business purposes, on the company's balance sheet.

C) A large company recorded the $20 cost of a tool as an expense, although the item is expected to be used for 3 years.

D) The Equipment ledger account shows a balance of $55,000. This amount represents the original cost of $75,000 less the accumulated depreciation of $20,000.

 

46. An accountant who records revenue when a credit sale is made rather than waiting for the receipt of cash from the customer is

A) following the accrual principle.

B) following the conservatism convention.

C) violating generally accepted accounting principles.

D) following the consistency principle.

 

47. The FASB has concluded that financial reporting rules should

A) help companies minimize the taxes they must pay.

B) be in compliance with income tax law.

C) concentrate on providing helpful information to management.

D) concentrate on providing helpful information to present and potential investors and creditors.

 

48. Keeping the personal assets of the owner of a business separate from the assets of the firm is an example of

A) following the going concern assumption.

B) applying the realization principle.

C) following the separate entity assumption.

D) applying the conservatism convention

 

49. Internal control is: 

A) The act of stealing a business' assets. 

B) The preparation of fraudulent financial statements.

C) The process that helps a business achieve its objectives such as operating efficiently and effectively. 

D) The reconciliation of the bank’s cash balance to the book’s cash balance. 

50. Separation of duties refers to separating all of these functions except which of the following? 

A) Authorizing transactions 

B) Keeping accounting records 

C) Hiring personnel 

D) Maintaining custody of assets

51. Which of the following is not a control activity? 

A) Mandatory vacations 

B) Risk assessment 

C) Security measures 

D) Proper authorization 

 

 

Answer the following questions based upon the information provided in the adjusted trial balance data from the Cameron White Company spreadsheet for the year ended December 31. The balance of the Notes Payable account consists of notes that are due within a year. The mortgage extends for more than a year. The beginning Retained Earnings account for the period was $49,000. The ending retained earnings for the period from the statement of retained earnings is $56,150. There were no dividends paid. 

 

52. What is the amount of the net realized value for accounts receivable? 

A) $13,500 

B) $12,400 

C) $14,600 

D) $1,100 

 

53. What is the amount of the net book value for store equipment? 

A) $4,000 

B) $6,500 

C) $9,000 

D) $2,500 

 

54. What is the amount of the total current assts? 

A) $76,650 

B) $109,650 

C) $108,550 

D) $75,550

 

55. What is the amount of the total plant and equipment? 

A) $36,000 

B) $28,000 

C) $47,000 

D) $39,000 

 

56. What is the amount of total assets? 

A) $111,550 

B) $109,650 

C) $108,550 

D) $155,550 

 

57. What is the amount of the total current liabilities?

A) $59,000 

B) $29,000 

C) $29,400 

D) $12,500

 

58. What is the amount of the total long-term liabilities?

A) $26,400 

B) $42,900 

C) $59,000

D) $26,000 

 

59. What is the amount of the total stockholders’ equity?

A) $49,000 

B) $166,950

C) $56,150

D. Not determinable

 

60. What is the amount of net income for the period?

A) $109,150

B) $7,150

C) $56,150

D) $7,700