119. A company recorded 2 days of accrued salaries of $1,400 for its employees on January 31. On February 9, it paid its employees $7,000 for these accrued salaries and for other salaries earned through February 9. The January 31 and February 9 journal entries are:  A.  B.  C.  D.  E.  120. If accrued salaries were recorded on December 31 with a credit to Salaries Payable, […]

    101.The gain on the disposal of equipment is recognized when:    A. The book value of the equipment is greater than the value received.   B. The book value of the equipment is less than the value received.   C. A salvage value exists.   D. A gain should not be recognized on the disposal of an asset.         102.For financial reporting purposes, the gain […]

    55.Which of the following describes Sales Tax Payable?    A. A revenue account with a normal credit balance.   B. A liability account with a normal debit balance.   C. A liability account with a normal credit balance.   D. An asset account with a normal debit balance.         56.Hugh Snow returned merchandise to Farley Co. The entry on the books of Farley company to […]

  51. To check for accuracy after posting: first a trial balance is completed, then, the subsidiary ledgers are tested by preparing a schedule of the controlling account.  52. A company using the periodic inventory system does not record the increase in cost of goods sold and decrease in inventory at the time of each sale in the sales journal.  53. The purchases journal is identical under both […]

  113.It is obvious that an error occurred in the preparation and/or posting of closing entries if:     A.all revenue and expense accounts have zero balances. B.the owner’s capital account is debited for the amount of the net loss for the period. C.the income summary account is debited for the amount of net income for the period. D.all balance sheet accounts have zero balances. E.only […]

  171. ABC Corporation has three service departments with the following costs and activity base:  Service DepartmentCostActivity Base for Allocation Graphics Production$200,000# of copies Accounting$500,000# of invoices processed Personnel Department$400,000# of employees ABC has three operating divisions, Micro, Macro and Super.  Their revenue, cost and activity information are as follows:  MicroMacroSuper Direct Revenues$700,000$850,000$650,000 Direct Operating Expenses$50,000$70,000$100,000 # of copies made20,00030,00050,000 # invoices processed700800500 # of employees130145125 […]

  119.Madison Corporation purchased 40% of Jay Corporation for $125,000 on January 1. On June 20 of the same year, Jay Corporation declared total cash dividends of $30,000. At year-end, Jay Corporation reported net income of $150,000. The balance in Madison Corporation’s Long-Term Investment-Jay Corporation account as of December 31 should be:    A.$77,000. B.$125,000. C.$173,000. D.$197,000. E.$370,000. 120.Pravis Corporation owns 30% of Kuster Corporation. Pravis […]

    On June 1, 2009, Jensen Company acquired an 8%, ten-month note receivable from a customer in settlement of an existing account receivable of $130,000. Interest and principal are due at maturity. 127. The proper adjusting entry at December 31, 2009, with regard to this note receivable includes a:  A. Debit to Cash of $6,067. B. Debit to Notes Receivable of $10,400. C. Credit to Interest Revenue of […]

11) Beginning inventory plus net purchases and plus freight in equals: A) net purchases. B) cost of goods available for sale. C) cost of goods sold. D) gross purchases.   12) Cost of goods sold plus ending inventory equals: A) net purchases. B) cost of goods available for sale. C) gross margin. D) gross profit. Table 5-4   The following data is for the Atlantis […]