31) Mercy, Inc. purchased equipment for $5,000 cash. The effect of this transaction on the accounting equation is;   A) Total shareholders’ equity   Total assets Total liabilities Contributed capital Retained earnings   (5,000) cash No effect No effect (5,000) equipment expense   B) Total shareholders’ equity   Total assets Total liabilities Contributed capital Retained earnings   5,000 cash (5,000) equipment No effect […]

    31) Clean Sweep, Inc. started the month of June with $800 worth of cleaning supplies. During the month, Clean Sweep purchased $300 of supplies for cash. At June 30, $200 worth of supplies was unused. How will the company report its unused supplies on June 30? A) $200 of unused supplies will appear as an expense on the income statement. B) $900 of […]

    31) When inventory is shipped from the seller to the buyer with shipping terms of FOB destination: A) title passes from the seller to the buyer when the goods leave the seller’s shipping dock. B) the goods will be included in the inventory of the seller until they reach their destination. C) the buyer owns the goods while they are in transit. D) […]

  11.The allowance for doubtful accounts is a. an ‘other revenue’ account. b. a contra accounts receivable account. c. an ‘other expense’ account. d. a contra expense. 12.On November 3, Carol Company made a $2,000 credit sale under the terms 3/10, n/60. If Carol receives full payment of the account on November 14, how much cash will it receive? a. $1,400 b. $1,900 c. $1,940 […]

    75. Since manufacturing costs (direct materials, direct labor, and overhead) are incurred in the process of manufacturing units of product, these costs are credited to:  A. The Direct Materials Inventory, Direct Labor, and Manufacturing Overhead accounts respectively. B. Liability accounts. C. The Work in Process Inventory account. D. The Cost of Goods Sold account.     76. The completion of a computer by First Wireless, Inc. would require a […]

    55.Each type of deduction made from the employees’ earnings is recorded in a separate    A. asset account.   B. expense account.   C. liability account.   D. revenue account.         56.It is best not to pay wages and salaries by    A. cash.   B. a check from the regular cash account.   C. the direct-deposit method.   D. a check from the payroll cash account.       […]

    161. Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during the year totaled $45,000, revenue for the year was $414,250, expenses for the year were $280,000, dividends declared was $22,700, and ending liabilities is $$350,000. What is the ending equity for the year? A. $700,160 B. $331,590 C. $134,250 D. $612,560 E. $175,040   162. Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during […]

  7) If the $17,000 spent to purchase inventory could be invested and earn interest of $1,000, then the opportunity cost of holding inventory is $17,000.   8) When opportunity costs exist, they are always relevant.   9) A decision as to whether to insource or outsource is a(n) A) idle capacity decision. B) production scheduling analysis. C) product mix decision. D) short-run focus decision. […]

  81. The International Accounting Standards Board has worked to develop global accounting standards known as  A. generally accepted accounting principles. B. globally accepted financial standards. C. international financial reporting standards. D. worldwide financial standards. 82. An examination of the financial statements of a business to ensure that they conform to generally accepted accounting principles is called  A. a certification. B. an audit. C. a verification. D. a validation. 83. Which of the following best describes […]

  91. A business operated at 100% of capacity during its first month and incurred the following costs:  Production costs (20,000 units):       Direct materials $180,000     Direct labor 240,000     Variable factory overhead 280,000     Fixed factory overhead  100,000 $800,000       Operating expenses:       Variable operating expenses $130,000     Fixed operating expenses   50,000 180,000   […]