Term
| Posting, Adjusting, Closing, Reversing |
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Definition
The correct order of the following steps of the accounting cycle is:
A) Posting Adjusting, closing, reversing
B) posting, closing, adjusting, reversing
C) Posting, Reversing, adjusting, closing
D) Adjusting, posting, closing, reversing |
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Term
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Definition
Which account does a merchandiser use that a service company does not use?
A) Cost of Goods Sold
B) Merchandise inventory
C) Sales Revenue
D) All of the above |
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Term
| Current Assets / Current Liabilities |
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Definition
What is current ratio?
A) current liabilities / current assets
B) current assets / current liabilities
C) (current assets - inventories - prepaid items) / current liabilities
D) working capital / current liabilities
E) (current assets - inventories - prepaid items) / current assets |
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Term
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Definition
Which inventory costing method assigns to ending merchandise inventory the newest - the most recent - costs incurred during the period?
A) LIFO
B) FIFO
C) Specific identification
D) weighted average |
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Term
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Definition
At year-end, ABC Inc. has cash of $11,600, current account receivable of $48,900, merchandise inventory of $37,900, and prepaid expenses totaling $5,100. Liabilities of $55,000 must be paid next year. What is ABC's acid-test ratio?
A) 0.21
B) 1.76
C) cannot be determined
D) 1.08 |
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Term
| (Cash + Cash equivalents + marketable securities + accounts receivable) / current liabilities |
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Definition
| what is acid test (quick) ratio? |
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Term
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Definition
How should you record a capital expenditure?
A) Debit an asset
B) Debit Capital
C) Debit an expense
D) Debit a liability |
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Term
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Definition
According to the conceptual framework, predictive value is a characteristic of:
A) understandability
B) faithful representation
C) relevance
D) both relevance and faithful representation |
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Term
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Definition
The following information is available for XYZ Company for the current year: [net sales $1,800, freight in $45, purchase discount $25, ending inventory $120] The gross margin is 30% of net sales. What is the cost of good available for sale?
A) $840
B) $1,220
C) $960
D) $1,200
E) none of the above |
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Term
| Units of production method |
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Definition
Which method is used to compute depletion?
A) Depletion method
B) units of production method
C) straight line method
D) double - declining balance method |
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Term
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Definition
XYZ Corp uses the allowance method (Income statement approach) for bad debts. During 2012 XYZ charged $25.2 to bad debt expense, and wrote off $30 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of:
A) $0
B) $ 25.2
C) $30
D) $4.8
E) None of the above |
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Term
| Aging the accounts receivable accounts |
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Definition
A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on:
A) direct write-off
B) credit sales
C) aging the accounts receivable accounts
D) cost of goods sold
E) none of the above |
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Term
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Definition
A truck costs $50 when new and has accumulated depreciation of $35. ABC company exchanges the truck for a new truck. The new truck has a market value of $60, and ABC pays cash of $40. Assume the exchange has commercial substance. What is the result of this exchange?
A) no gain or loss
B) gain of $5
C) loss of $5
D) gain of $45 |
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Term
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Definition
Where should goods in transit that were recently sold/ purchased f.o.b. destination be included in?
A) buyer's long-term investments
B) buyer's inventory
C) sellers inventory
D) not on any balance sheet |
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Term
| total goods available for sale minus the net purchases |
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Definition
In a periodic inventory system that uses the weighted average cost flow method, the beginning inventory is the:
A) net purchases minus the ending inventory
B) net purchase minus the cost of goods sold
C) total goods available for sale minus the cost of goods sold
D) total goods available for sale minus the net purchases |
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Term
| interest collected by the bank on a note receivable |
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Definition
After completing the bank reconciliation, for which of the following items would an adjusting entry be necessary?
A) interest collected by the bank on a note receivable
B) our company's outstanding checks
C) deposit in transit
D) none of the above |
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Term
| 3 month certificate of deposits (CDs) |
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Definition
The measurement of cash on hand classified as CASH, EXCEPT:
A) personal checks
B) 3-month certificates of deposits
C) negotiable checks
D) unrestricted funds on deposit with a bank
E) petty cash |
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Term
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Definition
Server Solutions paid $209,000 to acquire Tabletz Inc,. At the time of the acquisition, Tabletz's balance sheet reported total assets of $209,000 and liabilities of $104,500. The fair market value of tablet's assets was $209,000. the fair market value of tablets liabilities was $104,500. How much goodwill did server solutions purchase as part of the acquisition of tablets.
A) $209,000
B) $104,500
C) $52,250
D) $156,750 |
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Term
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Definition
In a period of deflation, the inventory method which tends to die the highest report net income is:
A) LIFO
B) FIFO
C) Weighted average
D) Dollar value LIFO |
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Term
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Definition
at 1/1/16, ABC had a credit balance of $325 in its allowance for uncollectible accounts. Based on past experience, 2% of ABC's credit sales have been uncollectible. During 2016, ABC wrote off $325 of accounts receivable. Credit sales for 2016 were $9000. In its 12/31/16 balance sheet, what amount should ABC report as allowance for uncollectible accounts?
A) $440
B) $245
C) $180
D) $115
E) none of the above |
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Term
| debit cost of goods sold and credit merchandise |
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Definition
When a company uses the perpetual inventory method, which of the following would be the entry to adjust inventory to lower of cost or market?
A) debit loss on inventory and credit merchandise inventory
B) debit cost of goods sold and credit merchandise
C) debit merchandise inventory and credit inventory adjustment
D) debit merchandise inventory and credit cost of goods sold |
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Term
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Definition
Which of the following is not a temporary account?
A) goodwill
B) dividends distributed
C) cost of goods sold
D) depreciation expense
E) dividend revenue |
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Term
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Definition
As per the ____________ , the entity will remain in operation for the foreseeable future.
A) going concern assumption
B) economic entity concept
C) monetary unit assumption
D) historical cost principle |
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Term
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Definition
Unearned revenue is an account of:
A) Liability
B) Asset
C) Revenue
D) Expense
E) none of the above |
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Term
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Definition
Which method can be used to generate cash from accounts receivable?
A) Pledging
B) factoring
C) both |
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Term
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Definition
If beginning inventory is overstated by $26, and ending inventory is overstated by $52, then what will be the result to cost of goods sold?
A) understated by $26
B) overstated by $26
C) understated by $78
D) overstated by $78 |
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