31. Which of the following was not an amendment to the Social Security Act of 1935?  A. Survivor’s insurance B. Disability insurance C. Estate insurance D. Hospital insurance The Social Security Act of 1935 was amended to include survivor’s insurance (1939), disability insurance, hospital insurance and supplementary medical insurance.     32. What is the earliest age at which an eligible worker can retire and still receive his or […]

    81.The allocation of the costs of natural resources, such as minerals, to the units produced is referred to as    A. depreciation.   B. depletion.   C. amortization.   D. salvage value.         82.When computing depreciation, the salvage value should be ignored if a company uses    A. the units-of-output method.   B. the sum-of-the-years’-digits method.   C. the declining-balance method.   D. the straight-line method.         […]

  186. The total assets and total liabilities of Paul’s Pools, a corporation, at the beginning and at the end of the current fiscal year are as follows:    Jan. 1 Dec. 31 Total assets $280,000 $475,000 Total liabilities 205,000 130,000         (a) Determine the amount of net income earned during the year.  No capital stock was issued and no dividends were paid […]

  101. A plan that states the number of units to be manufactured during each future period covered by the budget, based on the budgeted sales for the period and the levels of inventory needed to support future sales, is the:  A. Sales budget. B. Merchandise purchases budget. C. Production budget. D. Cash budget. E. Manufacturing budget. 102. Kyoto, Inc. predicts the following sales in units for the coming four months:    […]

  Fill in the Blank Questions   16. A(n) ____________________ is a comparison of the general ledger accounts with debit balances to the general ledger accounts with credit balances to make sure that the debit and credit totals are equal.  ________________________________________   17. The difference between the debit balance of the Equipment account and the credit balance of the Accumulated Depreciation—Equipment account is called the ____________________ of […]

  21. What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?  A. Assets and liabilities increase B. Liabilities decrease and stockholders’ equity increases C. Assets and liabilities decrease D. Stockholders’ equity increases and decreases by the same amount 22. Adjustments for which of the following involves the cash account?  A. Deferred revenues B. Accrued expenses C. Deferred liabilities D. None of these 23. Which one […]

    116.Juniper Company, Inc. uses a perpetual 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; […]

  145. Identify each of the following expenditures as chargeable to (a) Land, (b) Land Improvements, (c) Buildings, (d) Machinery and Equipment, or (e) other account.  (1) Cost of paving parking area for employees and customers. (2) Insurance during construction of building. (3) Interest incurred on loan during construction of building. (4) Fee paid for installation of equipment. (5) Special foundation for new equipment acquired. (6) […]

  121. On December 31, Strike Company has decided to trade-in one of its batting cages for another one that has a cost of $500,000.  The seller of the batting cage is willing to allow a trade-in amount of $40,000. The initial cost of the old equipment was $225,000 with an accumulated depreciation of $195,000.  Depreciation has been taken up to the end of the year.  […]

    41. Accounting information that is capable of making a difference in a decision by the user of the report is  A. comparable. B. reliable. C. relevant. D. neutral.   42. The Cervantes Company uses the same method of depreciation for its equipment in each fiscal period. This practice is an example of  A. conservatism. B. consistency. C. materiality. D. matching.   43. The four assumptions financial statement users should be able to assume that […]