Solved by verified expert :• The objectives of
financial reporting are to provide information Answer• Question
20 out of 6.29 points 2.
Investors and creditors are interested in the probability that their
original investment or loan will eventually be returned, and that they will
receive a reasonable return while their funds are invested or borrowed. These
expectations are collectively referred to as:Answer • Question
36.29 out of 6.29 points 3.
The basic purpose of generally accepted accounting principles is to:Answer • Question
46.29 out of 6.29 points 4.
The concept of adequate disclosure means that:Answer • Question
50 out of 6.29 points 5.
Which of the following is correct if a company purchases equipment for
$70,000 cash?Answer • Question
60 out of 6.29 points 6.
If a transaction causes an asset account to decrease, which of the
following related effects may occur?
Answer • Question
70 out of 6.29 points 7.
If cash increases during a year, it must mean that: A) There was positive net income on the income
statement B) Retained earnings increased C)
The net worth of a company increased. D) None of the three statements above must
necessarily be true.Answer • Question
86.29 out of 6.29 points 8.
On June 27, Healthy Life Services, Inc. performed extensive tests on lab
specimens submitted by several customers and sent invoices totaling $5,200, due
in 30 days:Answer • Question
96.29 out of 6.29 points 9.
Master Equipment has a $17,400 liability to Arrow Paint Co. When Master
Equipment makes a partial payment of $7,600 on this liability, which of
following is true about the journal entry made by Master to record this
transaction?Answer • Question
106.29 out of 6.29 points 10.
On June 18, Baltic Arena paid $6,600 to Marvin Maintenance, Inc. for
cleaning the arena following a monster truck show held on June 9th. This
transaction: Answer • Question
116.29 out of 6.29 points Use the following to answer
questions 11-13:Montauk Oil Co. reports these account balances at December
31, 2010 Accounts
Payable………………………………………….. $
110,000Accounts Receivable………………………………………. 100,000Buildings………………………………………………………. 240,000Capital
Stock…………………………………………………. 340,000Cash……………………………………………………………. 80,000Equipment…………………………………………………….. 160,000Land……………………………………………………………. 200,000Notes
Payable……………………………………………….. 260,000Retained
Earnings………………………………………….. 70,000On January 2, 2011, Montauk Oil collected $50,000 of its
accounts receivable and paid $20,000 on its accounts payable. 11. Refer to the above data. In a trial balance prepared at December
31,2010, the total of the debit column is: A) $1,540,000. B) $700,000. C) $1020,000. D) $780,000. Answer • Question
126.29 out of 6.29 points Use the following to answer
questions 11-13:Montauk Oil Co. reports these account balances at December
31, 2010:Accounts
Payable………………………………………….. $
110,000Accounts
Receivable………………………………………. 100,000Buildings………………………………………………………. 240,000Capital
Stock…………………………………………………. 340,000Cash……………………………………………………………. 80,000Equipment…………………………………………………….. 160,000Land……………………………………………………………. 200,000Notes
Payable……………………………………………….. 260,000Retained Earnings………………………………………….. 70,000On January 2, 2011, Montauk Oil collected $50,000 of its
accounts receivable and paid $20,000 of its accounts payable. 12. Refer to the above data. In a trial balance prepared on January 3,
2011, the total of the debit column is: A) $740,000. B) $1,570,000. C) $760,000. D) $370,000. Answer • Question
136.29 out of 6.29 points Use the following to answer
questions 11-13:Montauk Oil Co. reports these account balances at December
31, 2010:Accounts
Payable………………………………………….. $
110,000Accounts
Receivable………………………………………. 100,000Buildings………………………………………………………. 240,000Capital
Stock…………………………………………………. 340,000Cash……………………………………………………………. 80,000Equipment…………………………………………………….. 160,000Land……………………………………………………………. 200,000Notes
Payable……………………………………………….. 260,000Retained Earnings………………………………………….. 70,000On January 2, 2011, Montauk Oil collected $50,000 of its
accounts receivable and paid $20,000 of its accounts payable. 13. Refer to the above data. On January 3, 2011, total liabilities are: A) $370,000. B) $350,000. C) $300,000. D) $70,000. Answer • Question
140 out of 6.29 points 14.
The concept of materiality:Answer • Question
156.286 out of 6.286 points 15.
As of January 31, Logan Company owes $600 to We-Rent-All for equipment
used during January. If no adjustment is
made for this item at January 31, how will Logan’s financial statements be
affected?Answer • Question
166.29 out of 6.29 points 16.
Rose Corp. has a note receivable from Jewel Co for $80,000. The note
matures in 5 years and bears interest of 6%. Rose is preparing financial
statements for the month of June. Rose should make an adjusting entry :Answer • Question
176.286 out of 6.286 points Use the following to answer
questions 17-19:Rockville Company adjusts its accounts at the end of each
month. The following information has
been assembled in order to prepare the required adjusting entries at December
31:(1) A one-year bank loan of $360,000 at an annual interest
rate of 12% had been obtained on December 1.(2) The company’s pays all employees up-to-date each
Friday. Since December 31 fell on
Tuesday, there was a liability to employees at December 31 for two day’s pay
amounting to $5,900.(3) On December 1 rent on the office building had been paid
for four months. Monthly rent is $3,000.(4) Depreciation of office equipment is based on a lifetime
of six years. The balance in the Office
Equipment account is $7,200; no change has occurred in the account during the
year.(5) Fees of $7,600 were earned during the month for clients
who had paid in advance. 17. What amount of interest expense has accrued
on the bank loan? A) $2,400 B) $3,000. C) $3,600. D) $4,200. Answer • Question
180 out of 6.29 points Use the following to answer
questions 17-19:Rockville Company adjusts its accounts at the end of each
month. The following information has been assembled in order to prepare the
required adjusting entries at December 31:(1) A one-year bank loan of $360,000 at an annual interest
rate of 12% had been obtained on December 1.(2) The company’s pays all employees up-to-date each Friday.
Since December 31 fell on Tuesday, there was a liability to employees at
December 31 for two day’s pay amounting to $5,900.(3) On December 1 rent on the office building had been paid
for four months. Monthly rent is $3,000.(4) Depreciation of office equipment is based on a lifetime
of six years. The balance in the Office Equipment account is $7,200; no change
has occurred in the account during the year.(5) Fees of $7,600 were earned during the month for clients
who had paid in advance. 18. By what amount
will the book value of the office equipment decline after the appropriate
December adjustment is recorded? A) $1,200. B) $0. C) $100. D) Some other amount.
Answer • Question
190 out of 6.286 points Use the following to answer
questions 17-19:Rockville Company adjusts its accounts at the end of each
month. The following information has
been assembled in order to prepare the required adjusting entries at December
31:(1) A one-year bank loan of $360,000 at an annual interest
rate of 12% had been obtained on December 1.(2) The company’s pays all employees up-to-date each
Friday. Since December 31 fell on
Tuesday, there was a liability to employees at December 31 for two day’s pay
amounting to $5,900.(3) On December 1 rent on the office building had been paid
for four months. Monthly rent is $3,000.(4) Depreciation of office equipment is based on a lifetime
of six years. The balance in the Office
Equipment account is $7,200; no change has occurred in the account during the
year.(5) Fees of $7,600 were earned during the month for clients
who had paid in advance. 19. Failure to make the appropriate adjustment
to the Salary Expense account will result in: A) Understating net income for December by
$5,900. B) Understating net income for January by
$5,900. C) Overstating total liabilities at December
31. D) Overstating the balance in Cash at December
31. Answer • Question
206.286 out of 6.286 points Use the following to answer questions 20-21:Shown below is a trial balance for Dependable, Inc., on
December 31, after the first year of operations, after adjusting entries: Trial Balance
Dependable, Inc.December 31, 2005Cash $ 6,200 Accounts receivable 5,100 Office equipment 9,000 Accumulated Depreciation
$ 2,400Accounts payable
3,100Capital Stock 9,000Retained earnings
-0-Dividends 3,000 Fees earned 18,200Salaries expense 6,400 Advertising expense 1,300 Depreciation expense 1,700
$32,700 $32,700 20. Refer to the above data. Net income for the period equals: Answer • Question
210 out of 6.286 points 21. Refer to the above data. Retained earnings at December 31 equals;Answer • Question
226.286 out of 6.286 points 22.
If current assets are $140,000 and current liabilities are $100,000, the
current ratio will be: A) 71%. B) $40,000. C) 1:4:1. D) $240,000Answer • Question
236.286 out of 6.286 points 23.
If current assets are $90,000 and current liabilities are $30,000,
working capital will be: A) 33.3%. B) 3:1. C) $60,000. D) $120,000.Answer • Question
246.286 out of 6.286 points 24.
The following information is available:Sales…………………………………………………… $300,000Net Income………………………………………….. $
15,000Retained Earnings………………………………….. $
30,000Avg. Stockholders’ Equity……………………….. $100,000Dividends…………………………………………….. $
5,000 What is
the return on equity? A) 5%. B) 20%. C) 25%. D) 15%. Answer • Question
256.29 out of 6.29 points 25.
The cost of delivering merchandise to the customer is:Answer • Question
266.286 out of 6.286 points 26.
Emily Products uses a perpetual inventory system. At year-end the
Inventory account had a balance of $257,000, but a complete year-end physical
inventory indicated goods on hand costing only $251,000. Emily should:Answer • Question
270 out of 6.286 points 27.
At the beginning of the year, California Coat Co. had an inventory of
$100,000. During the year, the company purchased merchandise costing $650,000.
Net sales for the year totaled $1,000,000, and the gross profit rate was 45%.
The cost of goods sold and the ending inventory, respectively, were:Answer • Question
286.286 out of 6.286 points 28.
At the beginning of 2005, Hudson Hardware has an inventory of $200,000.
Because sales growth was strong during 2004, the owner wants to increase
inventory on hand to $250,000 at December 31, 2005. If net sales for 2005 are
expected to be $1,000,000, and the gross profit rate is expected to be 35%,
compute the cost of the merchandise the owner should expect to purchase during
2005. A)
$600,000. B) $700,000. C) $900,000. D) Some other amount.Answer • Question
290 out of 6.286 points 29.
If cost of goods sold is $240,000 and the gross profit rate is 40%, what
is the gross profit? A) $160,000 B) $560,000 C) $240,000 D) Some other amount.Answer • Question
300 out of 6.286 points 30.
In order to achieve internal control over cash receipts:Answer • Question
316.286 out of 6.286 points Use the following to answer
questions 31-32:The Cash account in the ledger of Novake, Inc. showed a
balance of $9,300 at June 30. The bank statement, however, showed a balance of
$11,700 at the same date. The only reconciling items consisted of a $2,100
deposit in transit, a bank service charge of $20, and a large number of
outstanding checks. 31. Refer to the above data. What is the “adjusted cash balance”
at June 30? Answer • Question
320 out of 6.286 points 32.
Refer to the above data. Upon
completion of the bank reconciliation, a journal entry will be required to
update the depositor’s accounting records. This entry will include:Answer • Question
330 out of 6.286 points 33.
Romeo Inc. had accounts receivable of $250,000 and an allowance for
doubtful accounts of $9,700 just before writing off as worthless an account
receivable from Juliet Company of $1,500. After writing off this receivable what
would be the balance in Romeo’s Allowance for Doubtful Accounts?Answer • Question
346.286 out of 6.286 points 34.
On January 1, Pierce Farms established a petty cash fund of $450, which
it replenishes at the end of each month. When a surprise count of the petty
cash fund is made on March 5, the petty cash box contains $80 in cash and
receipts for the following items:Delivery expense…………………………………… $28Typewriter repairs…………………………………. 45Office supplies……………………………………… 26 This
situation indicates: A) Approximately $270 of petty cash has been
invested in cash equivalents. B) There were approximately $270 in cash
disbursements made from the petty cash fund for the first two months of the
year. C) The petty cash expense recognized for the
month of March is approximately $270. D) There is approximately $270 of petty cash
that is missing and unaccounted for at March 5. Answer • Question
356.286 out of 6.286 points 35.
Juliet Inc. had accounts receivable of $300,000 and an allowance for
doubtful accounts of $18,500 just before writing off as worthless an account
receivable from Arrow Company of $1,200. The net realizable values of the
accounts receivable before and after the write-off were: A)
$281,500 before and $280,300 after. B) $281,500 before and $281,500 after. C) $300,000 before and $298,800 after. D) $318,500 before and $317,300 after.Answer
