88.Refer to the information above. After the appropriate adjusting entry is recorded, the balance in the liability account Unearned Fees will:    A. Decrease by $9,800.   B. Increase by $9,800.   C. Equal $9,800.   D. Be unaffected.         89.Refer to the information above. The entry to record rent expense will include:    A. A debit to Prepaid Rent for $6,000.   B. A credit to Prepaid […]

  111. Langley Company reported the following on its income statement:  Income before income taxes$420,000  Income tax expense  120,000  Net income$300,000 An analysis of the income statement revealed that interest expense was $80,000. Langley Company’s times interest earned was A. 8 times.B. 6.25 times.C. 5.25 times.D. 5 times. 112. The following information pertains to Tanzi Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all […]

    131.Amortizing a discount on bonds payable:    A.Increases interest expense.   B.Increases periodic cash payments to bondholders.   C.Decreases interest expense.   D.Decreases periodic cash payments to bondholders.         132.Premium on bonds payable:    A.Is an asset account.   B.Increases the carrying value of the liability.   C.Is a contra-asset account.   D.Is disclosed by a footnote.         133.Amortizing […]

    78. From the viewpoint of stockholders or potential investors, which of the following cash flow measurements would be of least importance?  A. The dollar amount of net cash flow from operating activities for the current year. B. The trend in net cash flow from operating activities from year to year. C. The corporation’s free cash flow for the current year. D. The dollar amount of overall increase or […]

    71. Temporary differences between pretax book income and taxable income arises from   A. tax-exempt interest revenue, only. B. certain fines, only. C. depreciation on long-lived assets, only. D. bad debt expense, only. E. depreciation on long-lived assets and bad debt expense.   72. Firms compute income tax payable for a period using _____ as the base.   A. book income B. total income C. permanent income D. taxable income E. gross income   73. Taxable […]

  36) Spoilage is typically assumed to occur at the stage of completion where inspection takes place. 37) Spoilage and rework costs are thoroughly captured in the accounting system.   38) Under the FIFO method, all spoilage costs are assumed to be related to the units completed during this period using the unit costs of the current period.   39) When spoiled goods have a […]

  81. A company’s beginning work in process inventory consisted of 20,000 units that were 1/5 complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 1/3 complete at the end of the period. Using the weighted-average method, the equivalent units of production with […]

  140. A company expects next year’s overhead costs to be $400,000. During this time, the company also expects to produce 1,000,000 units, have 200,000 direct labor hours, and 800,000 machine hours.Make the following independent calculations.a.  Compute a plantwide overhead rate using units of production as the allocation base.b.  Compute a plantwide overhead rate using direct labor hours as the allocation base.c.  Compute a plantwide […]

    116. Juniper Company, Inc. uses a  inventory system. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the payment on August 16 is: A. Debit Merchandise Inventory $8,250; credit Cash $8,250.B. Debit Cash $8,250; credit Accounts Payable $8,250.C. Debit […]

  Multiple Choice Questions 1.Portland Supplies Co. mistakenly excluded $3,000 of goods from its December 31, 2010 physical inventory count. Its December 31, 2011 inventory amount was correct. As a result of this error, a.2010 income is overstated by $3,000. b.2010 ending inventory is overstated by $3,000. c.2011 income is overstated by $3,000. d.2011 cost of goods sold is overstated by $3,000. 2.Which one of […]