81.In July, a company pays three years’ insurance in advance. The December 31 adjusting entry is a debit to a. Insurance Expense and a credit to Cash. b. Prepaid Insurance and a credit to Insurance Expense. c. Insurance Expense and a credit to Prepaid Insurance. d. Prepaid Insurance and a credit to Cash. 82.An adjusted trial balance is prepared to […]
101. The following unit data were assembled for the assembly process of the Super Co. for the month of June. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process. Units Beginning work in process 5,000 (60% complete) Units started in September 48,000 […]
53. The journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid and added to the invoice is: A. debit Purchases $2,750; credit Accounts Payable $2,750 B. debit Accounts Payable $2,875, debit Freight in $125; credit Purchases $2,750 C. debit Purchases $2,750, debit Freight In $125; credit Accounts Payable $2,875 D. debit Accounts Receivable $2,875; credit Sales $2,875 54. Tune Tones Instrument Tuning […]
61. Which of the following statements regarding earnings per share is false? A. It can be reported on the income statement. B. It increases when net income increases. C. It is based on the average number of common shares outstanding. D. It would not be affected by an extraordinary loss. 62. Which of the following would not typically be disclosed in the notes to the financial statements? A. Additional detail regarding […]
19.Vista Corporation, producer of computer software packages, began operations on January 1. It acquired financing from the issuance of common stock for $60,000,000 and long-term debt for $80,000,000. At the beginning of business operations, Vista produced the following projected income statement and balance sheet for the first year. All amounts are in thousands. Vista Corporation Projected Income Statement First Year of Operations Sales […]
51. Which of the following accounts is not closed? A. Accumulated Depreciation B. Depreciation Expense C. Interest Expense D. Sales 52. Which of the following accounts is not closed? A. Sales. B. Accounts Receivable. C. Depreciation Expense. D. Purchases. 53. Which of the following accounts is not closed? A. Capital. B. Depreciation Expense. C. Sales. D. Purchase Discounts. 54. Which of the following groups of accounts will have zero balances after the closing process is completed? A. Allowance for Doubtful Accounts […]
71. On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the A. Uncollectible accounts expense for the year B. total of the accounts receivables written-off during the year C. total estimated uncollectible accounts as of the end of the year D. sum of all accounts that are past due. 72. Allowance for Doubtful Accounts has a credit balance of $1,200 at the […]
51. Which of the following is not true concerning conceptual frameworks? A. The FASB, but not the IASB, relies on a conceptual framework to guide their standard-setting decisions.B. The conceptual framework is not a rigorous set of principles from which standard setters can logically deduce appropriate financial reporting standards. C. The purpose of a conceptual framework is to guide standard-setting decisions in order to enhance the quality and […]
128. Chang Industries has bonds outstanding with a par value of $200,000 and a carrying value of $203,000. If the company calls these bonds at a price of $201,000, the gain or loss on retirement is: A. $1,000 gain B. $2,000 loss C. $3,000 gain D. $1,000 loss E. $2,000 gain 129. A company retires its bonds at 105. The face value is $100,000 […]
95.Claymore Corp. has the following information about its standards and production activity for September. The volume variance is: A.$1,295U. B.$1,295F. C.$2,400U. D.$2,400F. E.$3,695U. 96.Claymore Corp. has the following information about its standards and production activity for September. The controllable variance is: A.$1,295U. B.$1,295F. C.$2,400U. D.$2,400F. E.$3,695U. 97.Regarding overhead costs, as volume increases: A.Unit fixed cost increases, unit variable cost decreases. B.Unit fixed cost […]
131. The assets of a company total $700,000; the liabilities, $200,000. What are the claims of the owners?
A. $900,000.
B. $700,000.
C. $500,000.
D. $200,000.
E. It is impossible to determine unless the amount of this owners' investment is known.
132. On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?
A. $8,300
B. $13,050
C. $20,500
D. $31,100
E. $40,400
133. Assets created by selling goods and services on credit are:
A. Accounts payable.
B. Accounts receivable.
C. Liabilities.
D. Expenses.
E. Equity.
134. An exchange of value between two entities is called:
A. The accounting equation.
B. Recordkeeping or bookkeeping.
C. An external transaction.
D. An asset.
E. Net Income.
135. Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?
A. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.
B. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.
C. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.
D. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.
E. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.
136. How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?
A. +$10,000 accounts receivable, -$10,000 accounts payable.
B. +$10,000 accounts receivable, +$10,000 accounts payable.
C. +$10,000 accounts receivable, +$10,000 cash.
D. +$10,000 accounts receivable, +$10,000 revenue.
E. +$10,000 accounts receivable, -$10,000 revenue.
137. Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?
A. Assets increase by $75,000 and expenses increase by $75,000.
B. Assets increase by $75,000 and expenses decrease by $75,000.
C. Liabilities increase by $75,000 and expenses decrease by $75,000.
D. Assets decrease by $75,000 and expenses decrease by $75,000.
E. Assets increase by $75,000 and liabilities increase by $75,000.
138. Viscount Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:
A. Total assets decrease and equity increases.
B. Both total assets and total liabilities decrease.
C. Total assets, total liabilities, and equity are unchanged.
D. Both total assets and equity are unchanged and liabilities increase.
E. Total assets increase and equity decreases.
139. If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:
A. Decreased $105,000.
B. Decreased $45,000.
C. Increased $30,000.
D. Increased $45,000.
E. Increased $105,000.
140. If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have:
A. Increased $22,000.
B. Decreased $22,000.
C. Increased $89,000.
D. Decreased $156,000.
E. Increased $156,000.
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