1 of 25 ABC Company signed a one-year $48,000 note payable at 8%


Question Description:

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1  of 25

ABC Company signed a one-year $48,000 note payable at 8% interest on May 1, 2014. If ABC only adjusts their accounts once a year at year end, how much interest expense was accrued on December 31, 2014?

$1,280
$3,840
$2,560
$3,200

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2  of 25

A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold 150 units for $50 each from March 1 through December 31. If the company uses the weighted-average inventory costing method, calculate the amount of Cost of Goods Sold on the income statement for the year ending December 31. (Assume the company uses the perpetual inventory system.)

$6,750
$4,050
$3,000
$3,750

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3  of 25

A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold a total of 150 units for $45 each from March 1 through December 31. What is the amount of ending inventory on December 31 if the company uses the first-in, first-out (FIFO) inventory costing method? (Assume that the company uses a perpetual inventory system.)

$1,500
$1,250
$1,000
$2,250

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4  of 25

A business purchased $3,500 of office supplies for cash. Which of the following sets of ledger accounts reflect the posting of this transaction

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5  of 25

A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold 150 units for $50 each from March 1 through December 31. If the company uses the first-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

$3,000
$4,000
$4,250
$6,750

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6  of 25

On November 1, 2015, Wrenns Martch sold merchandise for $10,000, FOB destination, with payment terms of 3/10, n/40. Sales returns on this sale amounted to $3,000. Wrenns received payment for the balance on November 10, 2015. The cost of goods sold was $3,600. Calculate the amount of gross profit from the transaction.

$1,800
$3,190
$1,320
$6,790

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7  of 25

Swan Song’s adjusted trial balance as of December 31, 2014 is given below:

  Debit Credit
Cash $12,000  
Accounts Receivable 9,000  
Prepaid Rent 6,000  
Prepaid Insurance 2,300  
Office Supplies 3,200  
Building 52,200  
Accumulated Depreciation—Building   $11,500
Equipment 35,000  
Accumulated Depreciation—Equipment   7,000
Land 30,000  
Accounts Payable   6,550
Salaries Payable   4,000
Interest Payable   2,240
Mortgage Payable (long term)   51,200
R. Lee, Capital (deficit) 5,590  
R. Lee, Withdrawals 20,000  
Service Revenue   190,000
Salaries Expense 38,000  
Insurance Expense 5,000  
Rent Expense 12,000  
Utilities Expense 15,000  
Advertising Expense 9,000  
Depreciation Expense—Building 10,000  
Depreciation Expense—Equipment 7,000  
Office Supplies Expense 1,200                  
Total $272,490 $272,490

Compute the current ratio.

2.07
1.83
1.64
2.54

Question

8  of 25

The following contains information from the records of the Wellborn Engineers and Architects.

Wellborn Engineers and Arhitects

Selected Financial Information

December 31, 2015

Current Assets $74,000
Current Liabilities 44,000
Long-term Assets 95,000
Long-term Liabilities 60,000
Total Revenues 50,000
Total Expenses 30,000

Which of the following statements is an accurate interpretation of the current ratio of Wellborn Engineers and Architects?

The company has $2.32 of current assets for every $1.00 of liabilities.
The company has $1.68 of current assets for every $1.00 of current liabilities.
The company has $1.58 of current assets for every $1.00 of liabilities.
The company has $0.59 of current assets for every $1.00 of current liabilities.

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9  of 25

Classic Artists’ Services has hired a maintenance man to maintain a building they use for instruction. He will begin work on February 1 and work through till May 31. Classic Artists’ will pay the maintenance man $4,000 at the end of May. It accrues Maintenance Expense at the end of every month. What is the balance in the Accounts Payable account for amounts owed to the maintenance man at the end of March?

Debit balance of $4,000
Credit balance of $2,000
Debit balance of $2,000
Credit balance of $4,000

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10  of 25

Which of the following journal entries would be recorded if a business renders service and receives cash of $900 from the customer?

Service revenue 900  
               Cash   900
Service revenue 900  
               Accounts payable   900
Cash 900  
               Service revenue   900
Service revenue 900  
               Accounts receivable   900

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11  of 25

Ace Inc. had the following transactions in June: Sold goods for $4,000 on account; received cash on account, $5,000; paid $800 for repair expense; paid $2,000 to a supplier that it owed from the previous month. What is the combined effect on Cash of the June transactions?

$2,200 increase
$2,200 decrease
$5,000 increase
$2,800 decrease

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12  of 25

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

Accounts payable 800  
               Office Supplies   800
Office Supplies 800  
               Accounts payable   800
Office Supplies 800  
               Cash   800
Cash 800  
               Office Supplies   800

Question

13  of 25

The following is the adjusted trial balance for Tuttle Photography.

Accounts Debit Credit
Cash $20,000  
Accounts Receivable 30,000  
Prepaid Insurance 7,500  
Office Supplies 3,200  
Building 150,000  
Accumulated Depreciation—Building   $12,000
Equipment 75,000  
Accumulated Depreciation—Equipment   8,500
Land 50,000  
Accounts Payable   20,000
Salaries Payable   4,000
Unearned service revenue   25,000
Mortgage Payable   100,000
R. Tuttle, Capital   21,290
R. Tuttle, Withdrawals 25,000  
Service Revenue   289,000
Salaries Expense 64,000  
Depreciation Expense—Building and Equipment 6,150  
Supplies Expense 14,040  
Insurance Expense 14,000  
Utilities Expense 20,900                
Total $479,790 $479,790

After the closing entries, what will the final balance in R. Tuttle, Capital be?

$25,000
$191,200
$21,290
$166,200

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14  of 25

Education for All sells tickets in advance for their weekly productions and records the proceeds as Unearned Revenue. At the end of each month, Education for All makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1, the Unearned Revenue account had a credit balance of $4,000. During March, they sold 300 tickets at $20 each and 250 tickets were used during the month. What is the balance in Unearned Revenue at the end of March?

Credit balance of $5,000
Debit balance of $4,000
Credit balance of $1,000
Debit balance of $5,000

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15  of 25

A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold a total of 150 units for $50 each from March 1 through December 31. If the company uses the weighted-average inventory costing method, calculate the amount of ending inventory on December 31. (Assume that the company uses a perpetual inventory system.)

$6,750
$2,700
$4,350
$2,900

Question

16  of 25

The balances of select accounts of Sandra Company as at December 31, 2015 are given below:

Notes Payable—short term $1,200
Salaries Payable 4,000
Notes Payable—long term 25,000
Accounts Payable 3,200
Unearned Revenue 2,000
Interest Payable 2,500

The unearned revenue is the amount of cash received for services to be rendered in January, 2016. What are the total current liabilities shown on the balance sheet?

$5,700
$10,400
$12,900
$11,700

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17  of 25

Martin Supply Service received $1,000 cash from a customer which was owed to the business from the previous month. What is the effect of the cash receipt on the accounts of the business?

Accounts Receivable decreases; Martin, Capital decreases.
Cash account increases; Accounts receivable decreases.
Accounts Payable increases; Martin, Capital decreases.
Cash increases; Accounts Payable decreases.

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18  of 25

Which of the following journal entries would be recorded if Christy Jones started a business and deposited cash of $3,000 into the business’s bank account?

Cash 3,000  
               Christy Jones, Capital   3,000
Accounts Payable 3,000  
               Cash   3,000
Christy Jones, Capital 3,000  
               Cash   3,000
Christy Jones, Capital 3,000  
               Accounts Payable   3,000

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19  of 25

Better Buy has six CD players in inventory on December 31. The players were purchased in November for $170. The price lists from suppliers indicate the current replacement cost of a CD player to be $168. What is the effect on gross profit if Better Buy values its ending merchandise inventory using the lower-of-cost-or-market rule?

The gross profit would increase by $2.
The gross profit would not be affected.
The gross profit would decrease by $12.
The gross profit would increase by $12.

Question

20  of 25

Two weeks previously, a business rendered services to one of its customers on account for which the payment was received today. Which of the following entries would be recorded if the company uses accrual basis accounting?

Cash 1,000  
               Accounts Receivable   1,000
Salary Expense 1,000  
               Cash   1,000
Cash 1,000  
               Service Revenue   1,000
Supplies 1,000  
               Cash   1,000

Question

21  of 25

The following information is available for Able Company’s Office Supplies account.

Beginning balance $2,000
Office Supplies expensed $8,000
Ending balance $3,000

From the above information, calculate the amount of office supplies purchased.

$9,000
$8,000
$2,000
$3,000

Question

22  of 25

Lush Lawns earned $1,000 for lawn mowing services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this transaction?

Accounts payable
Supplies
Cash
Accounts receivable

Question

23  of 25

A company purchased inventory for $75,000 from a vendor on account, FOB shipping point, with terms of 3/10, n/30. The company paid the shipper $1,500 cash for freight in. The company paid the vendor nine days after the sale. If there was no beginning inventory, the cost of inventory would be (assume a perpetual inventory system)

$74,250.
$76,500.
$71,295.
$73,500.

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24  of 25

Samson Company had the following balances and transactions during 2014:

Beginning Merchandise Inventory 10 units at $95
March 10 Sold 8 units
June 10 Purchased 20 units at $100
October 30 Sold 15 units

What is the amount of the company’s Merchandise Inventory, as disclosed in the December 31, 2014 balance sheet as per the periodic first-in, first-out (FIFO) costing method?

$475
$500
$665
$700

Question

25  of 25

WAXS-D, merchandisers of musical instruments, has provided the following details:

Mar.5 Inventory purchased $800,000
Mar.8 Freight In 40,000
Mar.13 Purchase returns 60,000
Mar.14 Allowances by vendor 15,000
Mar.20 Payment made to vendor for purchases on March 5 ?

Credit terms are: 3/20, n/45, FOB shipping. Calculate the net cost of inventory purchased assuming that there are no other inventory related transactions during the month.

$785,000
$740,000
$725,000
$743,250

Answer

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