41. The adjusting entry to record accrued interest on a note payable requires a debit to  A. Interest Income and a credit to Notes Payable. B. Interest Payable and a credit to Interest Expense. C. Interest Expense and a credit to Cash. D. Interest Expense and a credit to Interest Payable. 42. Allowance for Doubtful Accounts is reported in the  A. Assets section of the balance sheet. B. Operating Expenses section of […]

  38.Grove begins his loan transactions with Commerce Bank by borrowing $1,000 on January 1, 2013. Which of the following answers shows the effect of this event on the financial statements?   A. Option A B. Option B C. Option C D. Option D 39.Grove records the first year’s interest payment on December 31, 2013. Commerce’s prime rate is 4% for 2013. Which of the […]

  141. The following information pertains to Tanzi Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.  Assets Cash and short-term investments $  40,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant and equipment   215,000  Total Assets$310,000 Liabilities and Stockholders’ Equity Current liabilities 60,000 Long-term liabilities 95,000 Stockholders’ equity-common   155,000  Total Liabilities and stockholders’ equity$310,000 Income Statement Sales $ 90,000 […]

  91. Activity based costing for selling and administrative expenses can also be beneficial in allocating expenses to various products. Which of the following can be used as a base in allocating help desk costs? A. Number of callsB. Square footage of the help desk officeC. Number of products soldD. Number of field failures 92. A bank may decide to use activity-based costing to determine all of the following except: A. the amounts charged […]

  11) What is the operating income in Year 2? A) $1,804,500 B) $1,440,000 C) $4,620,000 D) $200,000 E) $188,000 12) What is the change in operating income from year 1 to year 2? A) $620,000 favourable B) $364,500 unfavourable C) $364,500 favourable D) $200,000 favourable E) $200,000 unfavourable   13) What is the revenue effect of growth component? A) $440,000 favourable B) $400,000 unfavourable […]

  85. Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property.Monroe invests $100,000 in cash and equipment that has a market value of $55,000. For the partnership, the amounts recorded for the building and for Fontaine’s Capital account are: A. Building $250,000; Fontaine, […]

    114. Resources owned by the company that will provide a benefit for more than one year are called: a. Current assets. b. Current liabilities. c. Long-term assets. d. Revenues.     115. The following financial information is from Shovels Construction Company: Accounts Payable $15,000 Buildings 80,000 Cash 10,500 Accounts Receivable 9,500 Sales Tax Payable 4,500 Retained Earnings 47,500 Supplies 40,000 Notes Payable (due […]

    124. Which of the following leases is essentially the purchase of an asset with debt financing?  a.   An operating lease. b.   A capital lease. c.   Both an operating and a capital lease. d.   Neither an operating lease nor a capital lease.     125. Which of the following is not a reason why some companies lease rather than buy?  a.   Leasing may allow […]

    52. Given the information in the table below, what is the company’s gross profit? Sales revenue $350,000 Accounts receivable $280,000 Ending inventory $230,000 Cost of goods sold $180,000 Sales returns $50,000 Sales discount $20,000   a. $280,000. b. $170,000. c. $50,000. d. $100,000.     53. LeGrand Corporation reported the following amounts in its income statement:   Sales revenue$440,000 Advertising expense    60,000 Interest […]

    81. The standard materials cost to produce one unit of Product K is 7 pounds of material at a standard price of $32 per pound. In manufacturing 8,000 units, 54,000 pounds of material were used at a cost of $30 per pound. What is the total direct material cost variance?A.  $108,000 favorableB.  $  64,000 favorableC.  $172,000 favorableD.  $  44,000 favorableE.  $104,000 favorable   […]