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Linda_us, Finance, Accounts & Homework Tutor
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Experience:  Post Graduate Diploma in Management (MBA)
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FOR LINDA Are you available for assistance? ACTG 2021.

Resolved Question:

FOR LINDA Are you available for assistance? ACTG 2021.
Submitted: 1 year ago.
Category: Homework
Expert:  Linda_us replied 1 year ago.
Thanks for requesting me. Please let me know how I can help you.
Customer: replied 1 year ago.
The exam is is timed its usually 40 mins; however, this wek is the final. I'm not sure how many questions or how long I have. I can add a bonus for your asking price. Just let me know what that is.
Expert:  Linda_us replied 1 year ago.
Let meet at 7 PM EST.
Customer: replied 1 year ago.
7pm est is fine.
Expert:  Linda_us replied 1 year ago.
Thanks.
Customer: replied 1 year ago.
Are you ready?
Expert:  Linda_us replied 1 year ago.
Yes I am.
Customer: replied 1 year ago.
Just a moment. Let me log in.
Expert:  Linda_us replied 1 year ago.
Sure.
Customer: replied 1 year ago.
Question 1

Which of the following is an example of a bank reconciliation item that requires an adjusting entry?
Answer NSF check
Deposit in transit
Bank error
None of these items requires an adjusting entry.
4 points
Question 2

What Is the rationale for the internal control principle, segregation of duties?
Answer History has shown that employees are generally dishonest and thus cannot be entrusted with performing related duties.
The work of one employee should, without duplication of effort, provide a reliable basis for evaluating the work of another employee.
Control is most effective when only one person is responsible for a give task.
Segregation of duties causes companies to hire more employees and thus it supports the economy.
4 points
Question 3

The use of prenumbered checks is an example of
Answer documentation procedures.
independent internal verification.
establishment of responsibility.
segregation of duties.
4 points
Question 4

Which of the following is not a suggested procedure to establish internal control over cash disbursements?
Answer Anyone can sign the checks.
Different individuals approve and make the payments.
Blank checks are stored with limited access.
The bank statement is reconciled monthly.
4 points
Question 5

With respect to the income statement
Answer contra revenue accounts do not appear on the income statement.
sales discounts increase the amount of sales.
contra revenue accounts increase the amount of operating expenses.
sales discounts are included in the calculation of gross profit.
4 points
Question 6

A perpetual inventory system would most likely be used by a(n)
Answer automobile dealership.
hardware store.
drugstore.
convenience store.
4 points
Question 7

A decline in a company's gross profit could be caused by all of the following except
Answer selling products with a lower markup.
clearance of discontinued inventory.
paying lower prices to its suppliers.
increasing competition resulting in a lower selling price.
4 points
Question 8

Baxtor Company purchased merchandise inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Baxtor Company pays within the discount period?
Answer $5,000
$4,920
$4,900
$4,000
4 points
Question 9

Which one of the following is not a justification for adjusting entries?
Answer Adjusting entries are necessary to ensure that revenue recognition principles are followed.
Adjusting entries are necessary to ensure that the matching principle is followed.
Adjusting entries are necessary to enable financial statements to be in conformity with GAAP.
Adjusting entries are necessary to bring the general ledger accounts in line with the budget.
4 points
Question 10

Dorting Company purchased a computer system for $3,600 on January 1, 2006. The company expects to use the computer system for 3 years. It has no salvage value. Monthly depreciation expense on the asset is:
Answer $0
$100
$1,200
$3,600
4 points
Question 11

Adjusting entries affect at least
Answer one revenue and one expense account.
one asset and one liability account.
one revenue and one balance sheet account.
one income statement account and one balance sheet account.
4 points
Question 12

Accumulated Depreciation is a(n)
Answer expense account.
stockholders' equity account.
liability account.
contra asset account.
4 points
Question 13

Use the following inventory information for the month of July.

July 1 Beginning inventory 10 units at $90
5 Purchases 60 units @ $84
14 Sale 40 units
21 Purchases 30 units at $87
30 Sale 28 units


Reference: Ref 6-16


Assuming that a perpetual inventory system is used, what is ending inventory (rounded) under the average cost method?
Answer $2,750
$2,784
$2,406.
$2,772
4 points
Question 14

The lower of cost or market basis of valuing inventories is an example of
Answer comparability.
the cost principle.
conservatism.
consistency.
4 points
Question 15

ABC Company is a retailer operating in an industry that experiences inflation (rising prices). ABC wants the most realistic cost of goods sold. Which inventory costing method should ABC consider using?
Answer Average because all inventory costs will then represent an average amount.
Specific identification is the most realistic method because it involves the actual costs.
LIFO because cost of goods sold represents the latest costs.
FIFO because cost of goods sold represents the earliest costs.
4 points
Question 16

At May 1, 2007, Treeline Company had beginning inventory consisting of 100 units with a unit cost of $7. During May, the company purchased inventory as follows:
200 units at $7
300 units at $8

The company sold 500 units during the month for $12 per unit. Treeline uses the average cost method.
Reference: Ref 6-9


The value of Treeline's inventory at May 31, 2007 is
Answer $700
$750
$800
$4,500
4 points
Question 17

The net income reported on the income statement for the current year was $210,000. Depreciation was $25,000. Accounts receivable and inventories decreased by $5,000 and $15,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $500 and $4,000. How much cash was provided by operating activities?
Answer $240,500
$250,500
$258,500
$219,500
3 points
Question 18

The acquisition of land by issuing common stock is
Answer a noncash transaction that is not reported in the body of a statement of cash flows.
a cash transaction and would be reported in the body of a statement of cash flows.
a noncash transaction and would be reported in the body of a statement of cash flows.
only reported if the statement of cash flows is prepared using the direct method.
3 points
Question 19

Wilton Company reported net income of $40,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is
Answer $30,000.
$45,000.
$39,000.
$35,000
3 points
Question 20

Harbor Company reported net income of $60,000 for the year ended December 31, 2007. During the year, inventories decreased by $12,000, accounts payable decreased by $18,000, depreciation expense was $20,000 and a gain on disposal of equipment of $9,000 was recorded. Net cash provided by operating activities in 2007 using the indirect method was
Answer $119,000.
$65,000.
$77,000.
$55.000.
3 points
Question 21

Spencer Corporation borrowed $300,000 from National Bank on May 31, 2006. The three-year, 7% note required annual payments of $114,315 beginning May 31, 2007.
Reference: Ref 10-14


Interest expense for the year ended December 31, 2006 was
Answer $12,250.
$14,000.
$21,000.
$0.
3 points
Question 22

The current carrying value of Jensen's $600,000 face value bonds is $597,750. If the bonds are retired at 102, what would be the amount Jensen would pay its bondholders?
Answer $597,750
$600,000
$603,000
$612,000
3 points
Question 23

The amount of sales tax collected by a retail store when making sales is
Answer a miscellaneous revenue for the store.
a current liability.
not recorded because it is a tax paid by the customer.
recorded as an operating expense.
3 points
Question 24

A current liability is a debt that can reasonably be expected to be paid
Answer within one year, or the operating cycle, whichever is longer.
between 6 months and 18 months.
out of currently recognized revenues.
out of cash currently on hand.
3 points
Question 25

A payment of a portion of accounts payable will
Answer not affect total assets.
increase liabilities.
not affect stockholders' equity.
decrease net income.
4 points
Question 26

On March 1, 2007, Dillon Company hires a new employee who will start to work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why or why not?
Answer Yes, the company is now obligated to pay the employee, thus that event must be recorded.
No, hiring an employee is an important event, however it is not an economic event that should be recorded.
Yes, failure to record the event would cause the financial statements to be misleading.
No, the financial position of the company has been changed, however, the dollar amount of the transaction is not yet known.
4 points
Question 27

The usual sequence of steps in the recording process is to
Answer analyze each transaction, enter the transaction in the journal, and transfer the information to the ledger accounts.
analyze each transaction, enter the transaction in the ledger, and transfer the information to the journal.
analyze each transaction, enter the transaction in the book of accounts, and transfer the information to the journal.
analyze each transaction, enter the transaction in the book of original entry, and transfer the information to the journal.
4 points
Question 28

An accounting record that includes a list of accounts and their balances at a given time is called a
Answer trial balance.
general journal.
general ledger.
chart of accounts.
4 points
Question 29

Dexter Company began the year by issuing $20,000 of common stock for cash. The company recorded revenues of $185,000, expenses of $160,000, and paid dividends of $10,000. What was Dexter's net income for the year?
Answer $15,000
$35,000
$25,000
$45,000
4 points
Question 30

Cromwell Company began the year by issuing $30,000 of common stock for cash. The company recorded revenues of $275,000, expenses of $240,000, and paid dividends of $15,000. What was Cromwell's net income for the year?
Answer $20,000
$50,000
$35,000
$65,000
4 points
Question 31

Stockholders' equity is comprised of
Answer common stock and dividends.
common stock and retained earnings.
dividends and retained earnings.
net income and retained earnings.
4 points
Question 32

Claire's Accessory Shop started the year with total assets of $70,000 and total liabilities of $40,000. During the year the business recorded $110,000 in revenues, $55,000 in expenses, and dividends of $20,000.
Reference: Ref 1-2


The net income reported by Claire's Accessory Shop for the year was
Answer $40,000.
$50,000.
$65,000.
$55,000.
4 points
Question 33

Claire's Accessory Shop started the year with total assets of $70,000 and total liabilities of $40,000. During the year the business recorded $110,000 in revenues, $55,000 in expenses, and dividends of $20,000.
Reference: Ref 1-2


Stockholders' equity at the end of the year was
Answer $60,000.
$55,000.
$65,000.
$35,000.
4 points
Question 34

The maturity value of a $20,000, 9%, 40-day note receivable dated July 3 is
Answer $20,000.
$22,000.
$21,800.
$20,200.
3 points
Question 35

Kline Corporation had net credit sales during the year of $800,000 and cost of goods sold of $500,000. The balance in receivables at the beginning of the year was $120,000 and at the end of the year was $180,000. What was the receivables turnover ratio?
Answer 5.33
6.67
4.44
3.33
3 points
Question 36

The interest on a $6,000, 10%, 1-year note receivable is
Answer $6,000.
$50.
$600.
$6,600.
3 points
Question 37

The direct write-off method of accounting for bad debts
Answer uses an allowance account.
uses a contra asset account.
does not require estimates of bad debt losses.
is the preferred method under generally accepted accounting principles.
3 points
Question 38

Benton Office Supplies
Balance Sheet
December 31, 2007

Cash $ 65,000 Accounts Payable $ 70,000
Prepaid Insurance 30,000 Salaries Payable 10,000
Accounts Receivable 50,000 Mortgage Payable 90,000
Inventory 70,000 Total Liabilities $160,000
Land held for investment 75,000
Land 90,000
Building $100,000 Common Stock $120,000
Less Accumulated Retained Earnings 250,000
Depreciation (20,000) 80,000 Total stockholders' equity $370,000
Trademark 70,000 Total Liabilities and
Total Assets $530,000 Stockholders' Equity $530,000


Reference: Ref 2-1


The total dollar amount of assets to be classified as property, plant, and equipment is
Answer $320,000.
$170,000.
$245,000.
$190,000.
4 points
Question 39

Which of the following is not classified properly as a current asset?
Answer Supplies
Marketable securities
A fund to be used to purchase a building within the next year
A receivable from the sale of an asset to be collected in two years
4 points
Question 40

At December 31, 2007 Shorts Company had retained earnings of $2,184,000. During 2007 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2007 was $402,000. The retained earnings balance at the beginning of 2007 was:
Answer $2,552,000
$1,816,000
$1,914,000
$2,454,000
4 points
Question 41

Reporting a net income of $95,000 will
Answer increase retained earnings.
decrease retained earnings.
increase common stock.
decrease common stock.
4 points
Question 42

The cost principle requires that when assets are acquired, they be recorded at
Answer market value.
the amount paid for them.
selling price.
list price.
4 points
Question 43

A disadvantage of the corporate form of business is
Answer its status as a separate legal entity.
continuous existence.
government regulation.
ease of transfer of ownership.
3 points
Question 44

A corporation records a dividend-related liability
Answer on the record date.
on the payment date.
when dividends are in arrears.
on the declaration date.
3 points
Question 45

Two classifications appearing in the paid-in capital section of the balance sheet are
Answer preferred stock and common stock.
paid-in capital and retained earnings.
capital stock and additional paid-in capital.
capital stock and treasury stock.
3 points
Question 46

Stockholders of a corporation directly elect
Answer the president of the corporation.
the board of directors.
the treasurer of the corporation.
all of the employees of the corporation.
3 points
Question 47

Which of the following methods of computing depreciation is production based?
Answer Straight-line
Declining-balance
Units-of-activity
None of these
3 points
Question 48

Edmonds Company purchases a new delivery van for $50,000. The sales taxes are $2,000. The logo of the company is painted on the side of the van for $1,200. The van's annual license is $120. The van undergoes safety testing for $220. What does Edmonds record as the cost of the new van?
Answer $53,540
$53,420
$52,000
$51,420
3 points
Question 49

Ace Corporation sold equipment for $12,000. The equipment had an original cost of $36,000 and accumulated depreciation of $18,000. As a result of the sale,
Answer net income will increase $12,000.
net income will increase $6,000.
net income will decrease $6,000.
net income will decrease $12,000.
3 points
Question 50

Joe's Quik Shop bought equipment for $25,000 on January 1, 2006. Joe estimated the useful life to be 5 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2007, Joe decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2007?
Answer $4,000
$2,000
$3,333
$5,000
Expert:  Linda_us replied 1 year ago.
There are total 50 questions. How much time do we have?

Also considering the work involved suitable Bonus should be $80-$100?
Customer: replied 1 year ago.
ok, thats fine.
Expert:  Linda_us replied 1 year ago.
Total time limit 2:30 hrs?
Customer: replied 1 year ago.
There's only an hour and 10 mins left.
Expert:  Linda_us replied 1 year ago.
I will try my best to complete it.
Customer: replied 1 year ago.
ok
Expert:  Linda_us replied 1 year ago.
Completed till 31.
Expert:  Linda_us replied 1 year ago.
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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7077
Experience: Post Graduate Diploma in Management (MBA)
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