ACC291 Principles of Accounting II

 

ACC291 Principles of Accounting II

University of Phoenix

ACC291T Week 1 Apply Exercise

Question 1

The following transactions took place at Five Flags Amusement Park during May. Five Flags Amusement Park must charge 8 percent sales tax on all sales:

 

DATE		TRANSACTIONS
2019
May	1	Sold merchandise on account to Bill Gomez; issued Sales Slip 1015 for $1,200 plus 8 percent sales tax, terms n/30.
	15	Recorded cash sales, $3,200 plus 8 percent sales tax.
	31	Received payment on account due from Bill Gomez for the sale on May 1.

• Sold merchandise on account to Bill Gomez; issued Sales Slip 1015 for $1,200 plus 8 percent sales tax, terms n/30.

• Recorded cash sales, $3,200 plus 8 percent sales tax.

• Received payment on account due from Bill Gomez for the sale on May 1.

 

Question 2

A wholesale business sells goods with a list price of $980 and a trade discount of 25 percent. The net sales price is

Multiple Choice

    $245.00.

    $735.00.

    $980.00.

    $1,005.00.

 

Question 3

Hour Place Clock Shop sold a grandfather clock for $2,450 subject to a 7% sales tax. The entry in the general journal will include a credit to Sales for

Multiple Choice

    $2,450.00.

    $2,229.50.

    $2,670.50.

    $2,441.00.

 

Question 4

If Lacy's Department Store charges 8 percent sales tax, the amount of sales tax collected on a $275 sale would be

Multiple Choice

    $22.00.

    $220.00.

    $34.38.

    $3.44.

 

Question 5

Vicente Company made sales using the following list prices and trade discounts. What amount should be recorded for each sale?
 

1. List price of $620 and trade discount of 40 percent.
2. List price of $720 and trade discount of 30 percent.
3. List price of $300 and trade discount of 20 percent.

 

Question 6

Record the following transactions of Lisa’s Fashion Boutique in a general journal. Lisa's Fashion Boutique operates in a state with 8% sales tax. (Round your intermediate calculations and final answers to 2 decimal places):
 

DATE		TRANSACTIONS
2019
Feb.	2	Sold merchandise for cash totaling $3,400 to customers using bank credit cards. Record the 21 percent discount on credit card sales at time of sale.
	15	Sold merchandise totaling $2,900 to customers using American Express.
	20	Received amount due from American Express, less their 22 percent discount, for sales made by customers using American Express on February 15.

 

• Sold merchandise for cash totaling $3,400 to customers using bank credit cards. Record the 21 percent discount on credit card sales at time of sale.

• Sold merchandise totaling $2,900 to customers using American Express.

 

• Received amount due from American Express, less their 22 percent discount, for sales made by customers using American Express on February 15.

 

Question 7

If a firm had sales of $44,000 during a period and sales returns and allowances of $3,400, its net sales were

Multiple Choice

    $47,400.

    $44,000.

    $40,600.

    $3,400.

 

Question 8

Post the entries in the general journal below to the Accounts Receivable account in the general ledger and to the appropriate accounts in the accounts receivable ledger for Calderone Company.

Assume the following account balances at January 1, 2019:
 

Accounts Receivable (control account)	$	8,160
Accounts Receivable—John Gibrone		5,000
Accounts Receivable—Jim Garcia		2,120
Accounts Receivable—June Lin		1,040

  

GENERAL JOURNAL

DATE

DESCRIPTION

POST. REF.

DEBIT

CREDIT

2019

Jan.

8

Cash

500

Accounts Receivable/John Gibrone

500

Received partial payment on

account from John Gibrone

20

Sales Returns and Allowances

300

Sales Tax Payable

24

Accounts Receivable/Jim Garcia

324

Accept return of defective

merchandise, Credit

Memorandum 121; original sale

made on Sales Slip 11102 of

December 27, 2018

 

1. Prepare a schedule of accounts receivable for Calderone Company at January 31, 2019.
2. Should the total of your accounts receivable schedule agree with the balance of the Accounts Receivable account in the general ledger at January 31, 2019?

 

Question 9

On Deck Sports Memorabilia store sells a Babe Ruth rookie card for $5,600 on account. If the sales tax on the sale is 8%, what is the amount debited to Accounts Receivable.

Multiple Choice

 

    $5,152

    $6,048

    $5,600

    $5,592

 

Question 10

Kay Sadia sold merchandise for $9,000 subject to a 8% sales tax. The entry in the general journal will include a debit to Accounts Receivable for:

Multiple Choice

    $9,720.00.

    $8,460.00.

    $9,000.00.

    $8,994.00.

 

  

ACC291T Week 2 Apply Exercise SCORE 100 PERCENT

Question 1

Lewis Corporation engaged in the following transactions during June.

 

DATE			TRANSACTIONS
2019
June	4		Purchased merchandise on account from Salinas Company; Invoice 100 for $1,055; terms n/30.
	15		Recorded purchases for cash, $1,540.
	30		Paid amount due to Salinas Company for the purchase on June 4.

Record these transactions in a general journal.

 

Question 2

During the year, a firm purchased $256,700 of merchandise and paid freight charges of $41,770. If the total purchases returns and allowances were $16,040 and purchase discounts were $8,500 for the year, what is the net delivered cost of purchases?

Multiple Choice

    $298,470

    $273,930

    $323,010

    $190,390

 

Question 3

Tune Tones Instrument Tuning Company owes Mandy Lynn's Music Studio $5,046 as of November 1. During November, Tune Tones purchased merchandise from Mandy Lynn totaling $8,685 and made payments on account to Mandy Lynn in the amount of $7,440. The amount Tune Tones owes Mandy Lynn on November 30 is:

Multiple Choice

    $6,291.

    $3,801.

    $11,079.

    $7,440.

 

Question 4

During March a firm purchased $22,730 of merchandise and paid freight charges of $1,800. If the net delivered cost of purchases for the March is $21,980, what is the total purchase returns for March?

Multiple Choice

    $0

    $1,050

    $2,550

    $3,600

 

Question 5

Bushard Company (buyer) and Schmidt, Inc. (seller) engaged in the following transactions during February 2019:

Bushard Company

DATE			TRANSACTIONS
2019
Feb.	10		Purchased merchandise for $6,700 from Schmidt, Inc., Invoice 1980, terms 2/10, n/30.
	13		Received Credit Memorandum 230 from Schmidt, Inc., for damaged merchandise totaling $370 that was returned; the goods were purchased on Invoice 1980, dated February 10.
	19		Paid amount due to Schmidt, Inc., for Invoice 1980 of February 10, less the return of February 13 and less the cash discount, Check 2010.

 

Schmidt, Inc.

DATE			TRANSACTIONS
2019
Feb.	10		Sold merchandise for $6,700 on account to Bushard Company, Invoice 1980, terms 2/10, n/30. The cost of merchandise sold was $3,850.
	13		Issued Credit Memorandum 230 to Bushard Company for damaged merchandise totaling $370 that was returned; the goods were purchased on Invoice 1980, dated February 10. The cost of the returned goods was $290.
	19		Received payment from Bushard Company for Invoice 1980 of February 10, less the return of February 13 and less the cash discount, Check 2010.

 

Both companies use the perpetual inventory system. Journalize the transactions above in a general journal for both Bushard Company and Schmidt, Inc. (Round final answers to the nearest whole dollar value.)

 

 

Question 6

Assume the following account balances at January 1, 2019, for Bioplast Jewelry, Inc.:

  

Accounts Payable (control account)	$	7,500
Accounts Payable—Evans Enterprises		1,900
Accounts Payable—Stamos Distributors		3,400
Accounts Payable—Tonetta Company		2,200

  

GENERAL JOURNAL
DATE		DESCRIPTION	POST. REF.	DEBIT			CREDIT
2019
Jan.	8	Accounts Payable/Stamos Distributors			330
		Cash						330
		Made partial payment
		on account, Check 1240
	10	Accounts Payable/Evans Enterprises			230
		Purchases Returns and Allowances						230
		Received Credit Memorandum
		123 as allowance for
		discolored merchandise

 

1. Use the final balances of the vendor accounts to prepare a schedule of accounts to payable for Bioplast Jewelry, Inc., as of January 31, 2019.
2. Does the total of your accounts payable schedule agree with the balance of the accounts payable account in the general ledger at January 31, 2019?

 

Question 7

Bushard Company (buyer) and Schmidt, Inc. (seller) engaged in the following transactions during February 2019:

Bushard Company

DATE			TRANSACTIONS
2019
Feb.	10		Purchased merchandise for $1,100 from Schmidt, Inc., Invoice 1980, terms 1/10, n/30.
	13		Received Credit Memorandum 230 from Schmidt, Inc., for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1980, dated February 10.
	19		Paid amount due to Schmidt, Inc., for Invoice 1980 of February 10, less the return of February 13 and less the cash discount, Check 2010.

 

Schmidt, Inc.

DATE			TRANSACTIONS
2019
Feb.	10		Sold merchandise for $1,100 on account to Bushard Company, Invoice 1980, terms 1/10, n/30.
	13		Issued Credit Memorandum 230 to Bushard Company for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1980, dated February 10.
	19		Received payment from Bushard Company for Invoice 1980 of February 10, less the return of February 13 and less the cash discount, Check 2010.

 

Journalize the transactions above in a general journal for both Bushard Company and Schmidt, Inc.

 

Question 8

Post the entries in the general journal below to the accounts payable account in the general ledger and to the appropriate accounts in the accounts payable ledger.

Assume the following account balances at January 1, 2019, for Bioplast Jewelry, Inc.:

  

Accounts Payable (control account)	$	7,200
Accounts Payable—Evans Enterprises		1,800
Accounts Payable—Stamos Distributors		3,300
Accounts Payable—Tonetta Company		2,100

  

GENERAL JOURNAL
DATE		DESCRIPTION	POST. REF.	DEBIT			CREDIT
2019
Jan.	8	Accounts Payable/Stamos Distributors			340
		Cash						340
		Made partial payment
		on account, Check 1240
	10	Accounts Payable/Evans Enterprises			240
		Purchases Returns and Allowances						240
		Received Credit Memorandum
		123 as allowance for
		discolored merchandise

Post the entries in the general journal above to the accounts payable account in the general ledger.

 

Post the entries in the general journal above to the appropriate accounts in the accounts payable ledger.

 

 

Question 9

On April 1, Moloney Meat Distributors sold merchandise on account to Fronke’s Franks for $3,550 on Invoice 1001, terms 1/10, n/30. The cost of merchandise sold was $2,100. Payment was received in full from Fronke’s Franks, less discount, on April 10.

Record the transactions for Moloney Meat Distributors on April 1 and April 10. The company uses the perpetual inventory system. (Round final answers to the nearest whole dollar value.)

 

Question 10

Record the following transactions of J. Min Designs in a general journal. The company uses the perpetual inventory system.
 

DATE			TRANSACTIONS
2019
April	1		Purchased merchandise on credit from O’Rourke Fabricators, Invoice 885, $3,450, terms 1/10, n/30; freight of $65 prepaid by O’Rourke Fabricators and added to the invoice (total invoice amount, $3,515).
	9		Paid amount due to O’Rourke Fabricators for the purchase of April 1, less the 2 percent discount, Check 457.
	15		Purchased merchandise on credit from Kroll Company, Invoice 145, $1,700, terms 1/10, n/30; freight of $120 prepaid by Kroll and added to the invoice.
	17		Returned damaged merchandise purchased on April 15 from Kroll Company; received Credit Memorandum 332 for $95.
	24		Paid the amount due to Kroll Company for the purchase of April 15, less the return on April 17, taking the 1 percent discount, Check 470.

Record these transactions in a general journal. (Round final answers to the nearest whole dollar value.)

   

ACC291T Week 3 Apply Exercise SCORE 100 PERCENT

Question 1

On January 2, Jasmine’s Beauty Supplies Inc. issued Check 3100 for $300 to establish a petty cash fund. On January 31, Check 3159 was issued to replenish the petty cash fund. An analysis of payments from the fund showed these totals: Supplies, $57; Delivery Expense, $98; and Miscellaneous Expense, $33.

Indicate how these transactions would be recorded in a general journal.

 

Question 2

On January 2, The Public Legal Clinic issued Check 2108 for $430 to establish a petty cash fund. Indicate how this transaction would be recorded in a general journal. 

 

Question 3

Read the following transactions.

Lourdes LLC. keeps a $100 change fund in its cash register. At the end of the day, cash sales per the register tape were $3,280. The cash count was $3,700.

Calculate the amount over or short.

 

Question 4

Di Stefano Office Supply Company received a bank statement showing a balance of $68,105 as of March 31, 2019. The firm’s records showed a book balance of $69,499 on March 31. The difference between the two balances was caused by the following items.

 

1. A debit memorandum for $52, which covers the bank’s collection fee for the note (item 6).
2. A deposit in transit of $3,800.
3. A check for $250 issued by another firm that was mistakenly charged to Di Stefano’s account.
4. A debit memorandum for an NSF check of $6,145 issued by Wozniak Construction Company, a credit customer.
5. Outstanding checks: Check 3782 for $2,300; Check 3840 for $153.
6. A credit memorandum for a $6,400 noninterest-bearing note receivable that the bank collected for the firm.

 
Prepare a bank reconciliation statement for the firm as of March 31. Prepare the necessary journal entries for March 31, 2019 from the statement.

 

Question 5

On March 31, 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,850. The balance in the firm's checkbook and Cash account on the same date was $10,500. The difference between the two balances is caused by the items listed below.

 

1. A $2,975 deposit made on March 30 does not appear on the bank statement.
2. Check 358 for $535 issued on March 29 and Check 359 for $1,750 issued on March 30 have not yet been paid by the bank.
3. A credit memorandum shows that the bank has collected a $1,100 note receivable and interest of $110 for the firm.
4. A service charge of $35 appears on the bank statement.
5. A debit memorandum shows an NSF check for $575. (The check was issued by Dane Jaris, a credit customer.)
6. The firm's records indicate that Check 341 of March 1 was issued for $800 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $750.
7. The bank made an error by deducting a check for $610 issued by another business from the balance of Home Decorating Pavilion’s account.

 

Required:

1. Prepare a bank reconciliation statement for the firm as of March 31, 2019.
2. Record entries for any items on the bank reconciliation statement that must be journalized.

 

Question 6

A firm's bank reconciliation statement shows a book balance of $16,000, an NSF check of $490, and a service charge of $29. Its adjusted book balance is

Multiple Choice

    $16,519.

    $15,539.

    $15,481.

    $16,461.

 

Question 7

Florence Company received a bank statement showing a balance of $12,300 on November 30, 2019. During the bank reconciliation process, Florence’s accountant noted the following bank errors:

 

1. A check for $146 issued by Florentine, Inc., was mistakenly charged to Florence Company’s account.
2. Check 2782 was written for $200 but was paid by the bank as $1,200.
3. Check 2920 for $80 was paid by the bank twice.
4. A deposit for $680 on November 22 was credited by the bank for $860.

 

Assuming outstanding checks total $1,650, prepare the adjusted bank balance section of the November 30, 2019, bank reconciliation.

 

 

Question 8

During the month a company paid $44.75 for office supplies and $53.22 for miscellaneous expenses from the petty cash fund. The entry to replenish the petty cash fund at the end of the month would include

Multiple Choice

    a debit to Petty Cash for $97.97.

    a credit to Cash for $97.97.

    a debit to Cash for $97.97.

    a credit to Office Supplies for $44.75.

 

Question 9

Read each of the following transactions.

1.         A) The cash sales per a register tape were $567. The cash count is $546.

B) The cash sales per a register tape were $8,100. The cash count is $7,740.

 

Prepare the general journal entries to record the above transactions.

 

Question 10

Teng Corporation received a bank statement showing a balance of $14,450 as of October 31, 2019. The firm’s records showed a book balance of $14,057 on October 31. The difference between the two balances was caused by the following items.
 

1. A debit memorandum for an NSF check from Richard Wolf for $419.
2. Three outstanding checks: Check 7017 for $119, Check 7098 for $50, and Check 7107 for $1,510.
3. A bank service charge of $15.
4. A deposit in transit of $852.

Prepare the adjusted bank balance section and the adjusted book balance section of the bank reconciliation statement. Prepare the necessary journal entries for the year 2019.

 

      

 

ACC291T Week 4 Apply Exercise SCORE 100 PERCENT

Question 1
The Supplies account has a trial balance of $3,286. A year-end inventory shows $1,764 worth of supplies left at the end of the year. The correct adjusting entry is:
    debit Supplies Expense $1,522; credit Supplies $1,522
    debit Supplies Expense $1,764; credit Prepaid Supplies $1,764
    debit Supplies Expense $3,286; credit Supplies $3,286
    debit Supplies $1,522; credit Supplies Expense $1,522

Question 2
On August 1, 2019, a firm purchased a 1-year insurance policy for $5,700 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 2019, is
    $2,375.
    $3,325.
    $1,900.
    $5,700.

Question 3
If an account has a debit balance of $830 in the Trial Balance section of a worksheet and there is a credit of $460 in the Adjustments section, the account balance in the Adjusted Trial Balance section of the worksheet is a
    $370 debit.
    $1,290 debit.
    $370 credit.
    $1,290 credit.

Question 4
On September 1, 2019, a firm accepted a 6-month, 11% note for $42,000 from a customer with an overdue account balance. The accrued interest recorded for this note on December 31, 2019, is

    $385.00
    $4,620.00
    $1,540.00
    No accrual is necessary

Question 5
On November 1, 2019, a firm accepted a 5-month, 10 percent note for $960 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended December 31, 2019, is
    $32.
    $80.
    $16.
    $96.

Question 6
Robin Banks, Inc. owns an armored truck which was purchased for $92,000. The Accumulated Depreci­ation on the truck is $62,000. The book value of the armored truck is
    $92,000
    $62,000
    $30,000
    $154,000

Question 7
Stan Still Stationery Store's employees are paid every Friday for a five day work week and are paid a total of $2,000 per day. If December 31, 2019, is on a Tuesday, the amount of the adjusting entry for accrued wages is:

    $6,000
    $4,000
    $10,000
    $8,000

Question 8
On January 2, 2019, a firm purchased equipment for $13,500. Depreciation expense for the year ending December 31, 2019, given the straight-line method, a 4-year useful life, and a salvage value of $2,500, is

    $2,500.
    $1,875.
    $2,750.
    $3,375.

Question 9
Rose Bush Nursery purchased a delivery truck for $44,900. The truck is expected to have a useful life of 5 years and a residual value of $2,900. If the truck was purchased on June 1, 2019, what is the amount of depreciation expense for the truck for the year ended December 31, 2019? The company uses the straight-line method of depreciation.

    $2,900
    $4,200
    $4,900
    $8,400

Question 10
On April 1, 2019, a firm accepted a 6-month, 10 percent note for $2,520 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended June 30, 2019, is

    $210.
    $84.
    $63.
    $252.

   

 

ACC291T Week 5 Knowledge Check SCORE 100 PERCENT

Question 1

For the current fiscal year, Purchases were $245,000, Purchase Returns and Allowances were $8,600, Purchase Discounts were $2,200 and Freight In was $32,000. If the beginning merchandise inventory was $60,000 and the ending merchandise inventory was $75,000, the Cost of Goods Sold is:

Multiple Choice

 

    $266,200

    $272,800

    $281,200

    $251,200

 

Question 2

The beginning capital balance shown on a statement of owner's equity is $64,000. Net income for the period is $23,000 and the owner withdrew $30,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

 

Multiple Choice

    $71,000.

    $64,000.

    $117,000.

    $57,000.

 

Question 3

Use the following account balances from the adjusted trial balance columns of Goody Chocolate's worksheet to answer below question.
 

Account	Debit Balance			Credit Balance
Cash		10,000
Merchandise Inventory		4,000
Accounts Payable					2,200
A. Goody, Drawing		1,000
A. Goody, Capital					6,000
Sales					24,000
Sales Discounts		200
Purchases		12,000
Salaries Expense		7,500
Income Summary		1,500			4,000

Using the adjusted trial balance above, select the correct closing entry that Goody Chocolate would make to close the expense accounts (and cost of goods sold accounts with debit balances) at the end of the accounting period.

Multiple Choice

•  

Income Summary		19,700
Expense Accounts				19,700

•  

Income Summary		2,500
A. Goody, Capital				2,500

•  

Purchases		12,000
Salaries Expense		7,500
Income Summary				19,500

•  

Income Summary		19,700
Sales Discounts				200
Purchases				12,000
Salaries Expense				7,500

 

 

 

Question 4

Which of the following should be classified as a General and Administrative Expense on a Multi-Step Income Statement:

 

Multiple Choice

    Insurance Expense

    Advertising Expense

    Sales Salaries Expense

    Delivery Expense

 

Question 5

Which of the following groups of accounts will have zero balances after the closing process is completed?

 

Multiple Choice

    Allowance for Doubtful Accounts and Uncollectible Accounts Expense

    Merchandise Inventory and Sales

    Purchases and Purchases Returns and Allowances

    Depreciation Expense and Accumulated Depreciation—Equipment

 

Question 6

Which of the following would not be classified as a Current Asset:

 

Multiple Choice

    Supplies

    Accounts Receivable

    Cash

    Equipment

 

Question 7

Which of the following statements is correct?

 

Multiple Choice

 

    If a business is to earn a net income, the gross profit on sales must be greater than operating expenses.

    Sales less Operating Expenses equals Gross Profit.

    The term single-step income statement is sometimes used to describe a classified income statement.

    Salaries of office employees would be grouped with the selling expenses in the Operating Expenses section of the income statement.

 

Question 8

he Income Summary account, for Wise Tools appears below. Based on the data contained in the account, determine which of the statements below is correct.

 

Income Summary
12/31 beg inv.	4,000	12/31 ending inv.	9,000
12/31 expenses	51,000	12/31 revenues	45,000

 

 

Multiple Choice

 

    Wise Tools will report net income of $1,000 for the period ending 12/31

    Wise Tools will report net income of $6,000 for the period ending 12/31

    Wise Tools will report a $6,000 net loss for the period ending 12/31

    Wise Tools will report a $1,000 net loss for the period ending 12/31

 

Question 9

At the end of the year Stan Still Stationery Store had the following balances: Sales $485,000; Sales Discounts $2,540; Sales Returns and Allowances $14,280; Sales Salaries Expense $54,000. The Net Sales for the year are:

 

Multiple Choice

    $414,180

    $468,180

    $447,820

    $501,820

 

Question 10

The Income Summary account, for Edgar's Cigars appears below. Based on the data contained in the account, determine which of the statements below is correct.

 

Income Summary
12/31 beg inv.	7,000	12/31 ending inv.	3,000
12/31 expenses	25,000	12/31 revenues	36,000

 

 

Multiple Choice

 

    Edgar's Cigars will report a $7,000 net loss for the period ending 12/31

    Edgar's Cigars will report net income of $7,000 for the period ending 12/31

    Edgar's Cigars will report an $11,000 net loss for the period ending 12/31

    Edgar's Cigars will report net income of $11,000 for the period ending 12/31

 

Question 11

The accountant of Randy's Flooring has closed all of the temporary income statement accounts. The accountant is now ready to close the Income Summary account. The owner of the company is R. Car. Using the Income Summary T-account below, determine the correct closing entry the accountant needs to make in order to close the account.

 

Income Summary
12/31 beg inv.	2,000	12/31 ending inv.	5,000
12/31 exp.	42,000	12/31 rev.	85,000

 

Multiple Choice

•  

Income Summary		43,000
R. Car, Capital				43,000

•  

Income Summary		46,000
R. Car, Capital				46,000

•  

R. Car, Capital		90,000
Income Summary				90,000

•  

R. Car, Capital		46,000
Income Summary				46,000

 

Question 12

Which of the following accounts would be closed at the end of the accounting period?

 

Multiple Choice

    Capital

    Accumulated Depreciation

    Prepaid Rent

    Depreciation Expense

 

Question 13

For the current fiscal year, Purchases were $187,000, Purchase Returns and Allowances were $4,200 and Freight In was $10,500. If the beginning merchandise inventory was $98,000 and the ending merchandise inventory was $103,000, the Net Delivered Cost of Purchases is:

 

Multiple Choice

    $172,300

    $201,700

    $193,300

    Correct

    $187,000

 

Question 14

In the general journal, reversing entries are dated as of

 

Multiple Choice

    the last day of the old fiscal period.

    any day during the month of the new fiscal period.

    any time before the end of the fiscal period.

    the first day of the new fiscal period.

 

Question 15

For the current fiscal year, Purchases were $187,000, Purchase Returns and Allowances were $4,200 and Freight In was $10,500. If the beginning merchandise inventory was $98,000 and the ending merchandise inventory was $103,000, the Cost of Goods Sold is:

 

Multiple Choice

    $188,300

    $193,300

    $167,300

    $196,700

 

Question 16

The entry to reverse the adjustment for accrued interest income consists of a debit to

 

Multiple Choice

 

    Interest Income and a credit to Interest Expense.

    Interest Income and a credit to Interest Receivable.

    Interest Income and a credit to Income Summary.

    Interest Receivable and a credit to Interest Income.

 

Question 17

Which of the following accounts will NOT appear on the post-closing trial balance?

 

Multiple Choice

    Equipment

    Wages Expense

    Wages Payable

    Prepaid Advertising

 

 

Question 18

Which of the following accounts is not closed at the end of the accounting period?

 

Multiple Choice

    Accumulated Depreciation

    Depreciation Expense

    Sales

    Interest Expense

 

Question 19

Use the following account balances from the adjusted trial balance columns of Goody Chocolate's worksheet to answer below question.
 

Account	Debit Balance			Credit Balance
Cash		10,000
Merchandise Inventory		4,000
Accounts Payable					2,200
A. Goody, Drawing		1,000
A. Goody, Capital					6,000
Sales					24,000
Sales Discounts		200
Purchases		12,000
Salaries Expense		7,500
Income Summary		1,500			4,000

Using the adjusted trial balance above, select the correct closing entry that Goody Chocolate would make to close their revenue accounts (and other temporary income statement accounts with credit balances) at the end of the accounting period.

Multiple Choice

•  

Income Summary		24,200
Sales				24,000
Sales Discounts				200

•  

Sales		24,000
A. Goody, Capital				24,000

•  

A. Goody, Capital		28,000
Income Summary				4,000
Sales				24,000

•  

Sales		24,000
Income Summary				24,000

 

Question 20

Prepaid expenses appear in the

 

Multiple Choice

    Current Assets section of the balance sheet.

    Operating Expenses section of the income statement.

    Current Liabilities section of the balance sheet.

    Other Expenses section of the income statement.

 

Question 21

Which of the following statements is not correct?

 

Multiple Choice

 

    The gross profit percentage is calculated by dividing the gross profit for the year by the net sales for the year.

    A current ratio of 3.5 to 1 means that a firm has $3.50 in current liabilities for every $1 of current assets.

    Working capital is the difference between total current assets and total current liabilities.

    The average inventory is calculated by adding the beginning inventory to the ending inventory and dividing the sum by 2.

 

 

Question 22

Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question.
 

Account	Debit Balance			Credit Balance
Cash		20,500
Merchandise Inventory		1,000
Accounts Payable					2,800
R. Holloway, Drawing		500
R. Holloway, Capital					13,000
Sales					15,000
Purchases		2,000
Purchase Returns and Allowances					200
Rent Expense		3,000
Salaries Expense		4,000

Select the correct closing entry that RB Auto would make to close the owner's withdrawal account at the end of the accounting period.

 

Multiple Choice

    debit R. Holloway, Capital $500 and credit R. Holloway, Drawing for $500.

   debit R. Holloway, Drawing $500 and credit Income Summary for $500.

    debit Income Summary $500 and credit R. Holloway, Drawing for $500.

    debit R. Holloway, Drawing $500 credit R. Holloway, Capital for $500.

 

Question 23

Which of the following accounts is not closed at the end of the accounting period?

 

Multiple Choice

    Sales

    Depreciation Expense

    Purchases

    Accounts Receivable

 

Question 24

Which of the following accounts will appear on the post-closing trial balance?

 

Multiple Choice

    Medicare Tax Payable

    Miscellaneous Income

    Payroll Taxes Expense

    Sales

 

Question 25

The beginning capital balance shown on a statement of owner's equity is $80,000. Net income for the period is $37,000. The owner made no additional investments during the period. The owner's capital balance at the end of the period is $96,000. The amount the owner withdrew for personal use during the period is

 

Multiple Choice

    $21,000.

    $16,000.

    $80,000.

    $37,000.

 

Question 26

Which of the following statements is not correct?

 

Multiple Choice

    In the closing process, the balance of the owner's drawing account is transferred to the debit side of the owner's capital account.

    In the closing process, the balance of the Purchases account is transferred to the Merchandise Inventory account.

    The worksheet is the source of data for the general journal entries required to close the temporary accounts.

    Closing the Revenue accounts is the first step in the closing process.

 

Question 27

Which of the following accounts is not closed at the end of the accounting period?

 

Multiple Choice

    Sales

    Purchase Discounts

    Capital

    Depreciation Expense

 

Question 28

Which of the following is not a selling expense:

 

Multiple Choice

    Advertising Expense

    Sales Salaries Expense

    Delivery Expense

    Rent Expense on the office

 

Question 29

An income statement that has one total for all revenues and one total for all expenses is known as a

 

Multiple Choice

    multiple-step income statement.

    single-step income statement.

    classified income statement.

    categorized income statement.

 

Question 30

Interest Expense is classified as a(n):

 

Multiple Choice

    Selling Expense

    Administrative Expense

    Other Expense

    Other Income

            

 

ACC291T Week 5 Apply Exercise SCORE 100 PERCENT

Question 1

For the current fiscal year, Purchases were $210,000, Purchase Returns and Allowances were $3,600 and Freight In was $15,000. If the beginning merchandise inventory was $140,000 and the ending merchandise inventory was $81,000, the Cost of Goods Sold is:

 

Multiple Choice

    $280,400

    $132,400

    $250,400

    $287,600

 

Question 2

The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. The merchandise inventory amounted to $59,475 on January 1, 2019, and $52,425 on December 31, 2019. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses.
 

	Accounts
401	Sales	$	247,000	Cr.
451	Sales Returns and Allowances		4,320	Dr.
491	Miscellaneous Income		370	Cr.
501	Purchases		103,300	Dr.
502	Freight In		1,945	Dr.
503	Purchases Returns and Allowances		3,570	Cr.
504	Purchases Discounts		1,770	Cr.
611	Salaries Expense—Sales		45,000	Dr.
614	Store Supplies Expense		2,280	Dr.
617	Depreciation Expense—Store Equipment		1,480	Dr.
631	Rent Expense		13,200	Dr.
634	Utilities Expense		2,970	Dr.
637	Salaries Expense—Office		20,800	Dr.
640	Payroll Taxes Expense		5,700	Dr.
643	Depreciation Expense—Office Equipment		540	Dr.
646	Uncollectible Accounts Expense		690	Dr.
691	Interest Expense		680	Dr.

The worksheet of Bridget's Office Supplies contains the following owner’s equity accounts. No additional investments were made during the period.
 

	Accounts
301	Bridget Swanson, Capital	$	63,460	Cr.
302	Bridget Swanson, Drawing		40,550	Dr.

Net income for the year $42,755.

Prepare a statement of owner's equity for the year ended December 31, 2019.

 

 

Question 3

The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. The merchandise inventory amounted to $58,875 on January 1, 2019, and $51,825 on December 31, 2019. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses.
 

	Accounts
401	Sales	$	245,800	Cr.
451	Sales Returns and Allowances		4,260	Dr.
491	Miscellaneous Income		310	Cr.
501	Purchases		102,700	Dr.
502	Freight In		1,885	Dr.
503	Purchases Returns and Allowances		3,510	Cr.
504	Purchases Discounts		1,710	Cr.
611	Salaries Expense—Sales		44,400	Dr.
614	Store Supplies Expense		2,220	Dr.
617	Depreciation Expense—Store Equipment		1,420	Dr.
631	Rent Expense		12,600	Dr.
634	Utilities Expense		2,910	Dr.
637	Salaries Expense—Office		20,200	Dr.
640	Payroll Taxes Expense		5,100	Dr.
643	Depreciation Expense—Office Equipment		480	Dr.
646	Uncollectible Accounts Expense		630	Dr.
691	Interest Expense		560	Dr.

Prepare a classified income statement for this firm for the year ended December 31, 2019.

 

Question 4

The following selected accounts were taken from the financial records of Los Olivos Distributors at December 31, 2019. All accounts have normal balances.
 

Cash	$	19,740
Accounts receivable		47,400
Note receivable, due 2020		9,200
Merchandise inventory		35,400
Prepaid insurance		2,320
Supplies		1,380
Equipment		43,200
Accumulated depreciation, equipment		23,200
Note payable to bank, due 2020		32,000
Accounts payable		15,780
Interest payable		320
Sales		528,500
Sales discounts		2,900
Cost of goods sold		355,680

Accounts Receivable at December 31, 2018, was $54,300. Merchandise inventory at December 31, 2018, was $58,200. Based on the account balances above, calculate the following:
 

1. The gross profit percentage.
2. Working capital.
3. The current ratio.
4. The inventory turnover.
5. The accounts receivable turnover. All sales were on credit.

 

Question 5

A company reported gross profit of $92,000, total operating expenses of $49,000 and interest income of $3,700. What is the income from operations?

 

Multiple Choice

 

    $35,600

    $43,000

    $46,700

    $39,300

 

Question 6

The Adjusted Trial Balance section of the worksheet for Van Zant Janitorial Supplies follows. The owner made no additional investments during the year.
 

Accounts		Debit			Credit
Cash	$	19,600
Accounts Receivable		60,800
Allowance for Doubtful Accounts				$	220
Merchandise Inventory		187,200
Supplies		7,240
Prepaid Insurance		3,160
Equipment		52,000
Accumulated Depreciation—Equipment					18,800
Accounts Payable					9,700
Social Security Tax Payable					1,490
Medicare Tax Payable					410
Steven Van Zant, Capital					281,640
Steven Van Zant, Drawing		75,000
Income Summary		181,000			187,200
Sales					778,000
Sales Returns and Allowances		15,400
Purchases		487,900
Freight In		6,400
Purchases Returns and Allowances					9,500
Purchases Discounts					6,300
Rent Expense		34,800
Telephone Expense		6,340
Salaries Expense		124,140
Payroll Taxes Expense		12,700
Supplies Expense		7,600
Insurance Expense		1,660
Depreciation Expense—Equipment		9,100
Uncollectible Accounts Expense		1,220
Totals	$	1,293,260		$	1,293,260

 

Prepare a postclosing trial balance for the firm on December 31, 2019.

 

 

Question 7

At the end of the year Stan Still Stationery Store had the following balances: Sales $710,000; Sales Discounts $2,660; Sales Returns and Allowances $15,800; Sales Salaries Expense $77,000. The Net Sales for the year are:

 

Multiple Choice

 

    $691,540

    $614,540

    $707,340

    $694,200

Hint: Sales – sales discount – Sales return and allowances

 

Question 8

Solomon Company reports the following in its most recent year of operations:
 

• Sales, $1,070,000 (all on account)
• Cost of goods sold, $623,100
• Gross profit, $446,900
• Accounts receivable, beginning of year, $97,000
• Accounts receivable, end of year, $117,000
• Merchandise inventory, beginning of year, $62,000
• Merchandise inventory, end of year, $72,000.

Based on these balances, compute:

1. The accounts receivable turnover.
2. The inventory turnover.

 

Question 9

				Debit			Credit
2019			(Adjustment a)
	Dec.	31	Uncollectible Accounts Expense		2,864.00
			Allowance for Doubtful Accounts					2,864.00
			To record estimated loss from Uncollectible accounts based on 0.4% of net credit sales, $716,000
			(Adjustment b)
		31	Supplies Expense		3,800.00
			Supplies					3,800.00
			To record supplies used during the year
			(Adjustment c)
		31	Insurance Expense		1,080.00
			Prepaid Insurance					1,080.00
			To record expired insurance on 1-year $4,320 policy purchased on Oct. 1
			(Adjustment d)
		31	Depreciation. Exp.—Store Equipment		13,400.00
			Accum. Depreciation—Store Equip.					13,400.00
			To record depreciation
			(Adjustment e)
		31	Salaries Expense—Office		1,900.00
			Salaries Payable					1,900.00
			To record accrued salaries for Dec. 29–31
			(Adjustment f)
		31	Payroll Taxes Expense		145.35
			Social Security Tax Payable					117.80
			Medicare Tax Payable					27.55
			To record accrued payroll taxes on accrued salaries: social security, 6.2% × 1,900 = $117.80; Medicare, 1.45% × 1,900 = $27.55
			(Adjustment g)
		31	Interest Expense		110.00
			Interest Payable					110.00
			To record accrued interest on a 4-month, 6% trade note payable dated Nov. 1: $11,000 × 0.06 × 2/12 = $110.00
			(Adjustment h)
		31	Interest Receivable		158.00
			Interest Income					158.00
			To record interest earned on 6-month, 8% note receivable dated Oct. 1: $7,900 × 0.08 × 3/12 = $158.00

Examine the above adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 2020. (Record the entries in the order given. Round your answers to 2 decimal places.)

 

 

Question 10

For the current fiscal year, Purchases were $345,000, Purchase Returns and Allowances were $9,900, Purchase Discounts were $3,900 and Freight In was $49,000. If the beginning merchandise inventory was $70,000 and the ending merchandise inventory was $95,000, the Cost of Goods Sold is:

 

Multiple Choice

    $380,200

    $405,200

    $355,200

    $382,800

  

 

ACC291 Principles of Accounting II Final Exam (Score: 27/30 i.e. 90%)

1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
A.

Bad Debts Expense ……………. ……………. $15,000
Allowances for Doubtful Accounts ……………. ……………. $15,000

B.

Bad Debts Expense ……………. ……………. $12,000
Allowances for Doubtful Accounts ……………. ……………. $12,000

C.

Bad Debts Expense ……………. ……………. $12,000
Accounts Receivable ……………. ……………. …………….. $12,000

D.

Bad Debts Expense ……………. ……………. $15,000
Accounts Receivable ……………. ……………. …………….. $15,000

2) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period?
A.
$15,000
B.
$12,000
C.
$18,000
D.
$8,000

3) Intangible assets
A.
should be reported under the heading Property, Plant, and Equipment
B.
should be reported as a separate classification on the balance sheet
C.
should be reported as Current Assets on the balance sheet
D.
are not reported on the balance sheet because they lack physical substance

4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that
A.
must be generated internally
B.
are depletable natural resources
C.
do not have physical substance
D.
have been exchanged at a gain

5) The book value of an asset is equal to the
A.
asset’s market value less its historic cost
B.
blue book value relied on by secondary markets
C.
replacement cost of the asset
D.
asset’s cost less accumulated depreciation

6) Gains on an exchange of plant assets that has commercial substance are
A.
deducted from the cost of the new asset acquired
B.
deferred
C.
not possible
D.
recognized immediately

7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as
A.
capital expenditures
B.
expense expenditures
C.
improvements
D.
revenue expenditures

8) Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as
A.
capital expenditures
B.
expense expenditures
C.
ordinary repairs
D.
revenue expenditures

9) When an interest-bearing note matures, the balance in the Notes Payable account is
A.
less than the total amount repaid by the borrower
B.
the difference between the maturity value of the note and the face value of the note
C.
equal to the total amount repaid by the owner
D.
greater than the total amount repaid by the owner

10) The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month note would be
A.
$12,000
B.
$6,000
C.
$3,000
D.
$2,000

11) If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?
A.
$3,000,000
B.
$90,000
C.
$300,000
D.
$210,000

12) Hilton Company issued a four-year interest-bearing note payable for $300,000 on January 1, 2011. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2012 balance sheet?
A.
Long-term debt, $300,000.
B.
Long-term debt, $225,000.
C.

D.
Long-term debt, $225,000; Long-term debt due within one year, $75,000.

13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2011, is
A.
$30,000
B.
$24,000
C.
$32,434
D.
$25,946

14) When the effective-interest method of bond discount amortization is used
A.
the applicable interest rate used to compute interest expense is the prevailing market interest rate on the date of each interest payment date
B.
the carrying value of the bonds will decrease each period
C.
interest expense will not be a constant dollar amount over the life of the bond
D.
interest paid to bondholders will be a function of the effective-interest rate on the date the bonds were issued

15) If a corporation has only one class of stock, it is referred to as
A.
classless stock
B.
preferred stock
C.
solitary stock
D.
common stock

16) Capital stock to which the charter has assigned a value per share is called
A.
par value stock
B.
no-par value stock
C.
stated value stock
D.
assigned value stock

17) ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2011. What is the annual dividend on the preferred stock?
A.
$50 per share
B.
$5,000 in total
C.
$500 in total
D.
$.50 per share

18) Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2010. The board of directors declares and pays a $45,000 dividend in 2011. What is the amount of dividends received by the common stockholders in 2011?
A.
$0
B.
$25,000
C.
$45,000
D.
$20,000

19) When the selling price of treasury stock is greater than its cost, the company credits the difference to
A.
Gain on Sale of Treasury Stock
B.
Paid-in Capital from Treasury Stock
C.
Paid-in Capital in Excess of Par Value
D.
Treasury Stock

20) The purchase of treasury stock
A.
decreases common stock authorized
B.
decreases common stock issued
C.
decreases common stock outstanding
D.
has no effect on common stock outstanding

21) Marsh Company has other operating expenses of $240,000. There has been an increase in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Marsh's cash payments for operating expenses?
A.
$228,000
B.
$232,000
C.
$200,000
D.
$280,000

22) Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows?
A.
Operating activities section
B.
Investing activities section
C.
Financing activities section
D.
Does not represent a cash flow

23) In performing a vertical analysis, the base for cost of goods sold is
A.
total selling expenses
B.
net sales
C.
total revenues
D.
total expenses

24) Blanco, Inc. has the following income statement (in millions):
BLANCO, INC.
Income Statement
For the Year Ended December 31, 2011
Net Sales ………………………… $200
Cost of Goods Sold ………………………… 120
Gross Profit ………………………… 80
Operating Expenses ………………………… 44
Net Income ………………………… $ 36

Using vertical analysis, what percentage is assigned to Net Income?
A.
100%
B.
82%
C.
18%
D.
25%

25) Dawson Company issued 500 shares of no-par common stock for $4,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?
A.
Cash ………………………………………………….. $4,500
Common Stock 4,500

B.
Cash ……………………………… $4,500
Common Stock 1,000
Paid-In Capital in Excess of Par 3,500

C.
Cash …………………. $4,500
Common Stock 1,000
Paid-In Capital in Excess of Stated Value 3,500

D.
Common Stock ………………………………………………….. $4,500
Cash 4,500

26) Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a
A.
credit to Paid-In Capital from Treasury Stock for $9,000
B.
credit to Retained Earnings for $9,000
C.
debit to Pain-In Capital from Treasury Stock for $45,000
D.
debit to Retained Earnings for $45,000

27) Which of the following is a fundamental factor in having an effective, ethical corporate culture?
A.
Efficient oversight by the company’s Board of Directors
B.
Workplace ethics
C.
Code of conduct
D.
Ethics management programs

28) Two individuals at a retail store work the same cash register. You evaluate this situation as
A.
a violation of establishment of responsibility
B.
a violation of segregation of duties
C.
supporting the establishment of responsibility
D.
supporting internal independent verification

29) The Sarbanes-Oxley Act imposed which new penalty for executives?
A.
Fines
B.
Suspension
C.
Criminal prosecution for executives
D.
Return of ill-gotten gains

30) The Sarbanes-Oxley Act requires that all publicly traded companies maintain a system of internal controls. Internal controls can be defined as a plan to
A.
safeguard assets
B.
monitor balance sheets
C.
control liabilities
D.
evaluate capital stock

SCORE:27/30 = 90%

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