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final exam review
what is depreciation
sales taxes recorded at time of sale is
final exam review
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Answers
1
sales taxes recorded at time of sale is
revenue
expense
liability
unearned revenue
2
what is depreciation
adjust to market value over time
cash accumulation approach
cost allocation method
valuation approach
3
which is not a typical prepaid expense?
supplies
insurance
wages
rent
4
par value
established for a share after issued
represents original selling price per share
represents what share is worth
the value assigned per share in corporate charter
5
part of annual report represents opinion of fairness of financial position and income
balance sheet
financial statements
auditor's opinion
income statement
6
factoring is
% of a/r to be collected
selling a/r to others for discount
setting allowance for bad debt amount
average collection period
7
using straight line depreciation, which is not a factor to compute depreciation
useful life
cost
book value
salvage value
8
what term is used for bonds that have assets pledged as collateral
callable bonds
secured bonds
convertible bonds
discount bonds
9
time period for classifying liability is 1 yr or operating cycle, whichever is
possible
longer
shorter
probable
10
a revenue account
increases with debits
increases with credits
has a normal debit balance
decreased by credits
11
what is the sales discount based?
invoice - returns
invoice + freight in
invoice + freight out
invoice - discount
12
Which is an example of a cash flow from investing activities
payment of cash for inventory
cash sale of equipment
payment to repurchase stock
cash from issuance of bonds
13
most critical part of managing accounts receivables
monitoring receivables
setting payment terms
which method for bad debts
who gets credit
14
$800 estimated uncollectible A/R under the allowance method
debit to allowance for doubtful accounts $800
debit to bad debt expense $800
credit to allowance for doubtful accounts $800
credit to accounts receivable $800
15
permanent decline in market value of asset is called
disposal
write down
capital expenditure
impairment
16
debits
decrease assets & liabilities
increase both assets & liabilities
decrease assets & increase liabilities
increase assets & decrease liabilities
17
Which is an example of cash inflow from operations
pay vendors for inventory
payment to stockholders for dividends
receipt of cash from sale of stock
none of these
18
In perpetual inventory, which accounts are credited when customer returns goods
a/r & cogs
sales returns
sales returns & allowance, & inventory
inventory & cogs
19
order the current assets on the balance sheet
cash, a/r, inventory, short investments, prepaids
cash, short investments, prepaids, a/r
cash, short investments, a/r, inventory, prepaids
cash, a/r, prepaids, inventory, short investments
20
which will result in an journal entry from a bank reconciliation
deposits in transit
bank errors
outstanding checks
NSF checks
21
which accounts normally have debit balances
assets, expenses, revenues
assets, expenses, retained earnings
assets, liabilities, dividends
assets, dividends, expenses
22
which is not a typical current liability
interest payable
current maturities of long term debt
salaries payable
mortgage payable
23
Using allowance method, the entry to record estimated uncollectible amount of $800 is
dr allowance for bad debt 800; cr a/r 800
dr bad debt exp 800; cr allowance for bad debt 800
dr bad debt exp 800; cr a/r 800
dr a/r 800; cr allowance for bad debt 800
24
which is considered property, plant & equipment
supplies
copyright
investment in Intel corporate stock
land
25
which on is not a depreciable assets
land
building
equipment
driveway
26
a major disadvantage of a corporation is
limited liability of stockholders
additional taxes
none of the above
transferable ownership rights
27
example of an intangible
property, plant & equipment
prepaid expenses
accounts receivable
trademarks
28
Which is an example of cash inflow from financing
none of these
pay vendors for inventory
receipt of cash from sale of stock
payment to stockholders for dividends
29
cash received before services performed, recorded as a debit to cash and credit to ...
none of these
accrued revenue
unearned revenue
unrecorded revenue
30
Overstatement of beginning inventory results in
no effect on net income
understatement of net income
overstatement of net income
a need to adjust cogs
31
difference between asset cost and its accumulated depreciation is
book value
real value
fair value
market value
32
which is the correct sequence of financial statements
income st, balance sheet, retained earnings, cash flows
income st, retained earnings, balance sheet, cash flows
balance sheet, cash flows, income st, retained earnings
balance sheet, retained earnings, cash flows, income st.
33
What decreases when treasury stock is purchased?
authorized shares
outstanding shares
issued shares
treasury shares
34
which is part of the entry to record a write-off using allowance method
dr loss on a/r
dr bad debt expense
dr a/r
dr allowance for bad debt
35
Cash sales are $2000, sales tax $155, journal entry to record
dr cash 2000, cr sales tax exp. 155, cr sales 1155
dr cash 2155, cr sales 2000; cr sales tax pay. 155
dr cash 2155, cr sales 2155
dr cash 2000, cr sales 2000
36
What is the method to record treasury stock?
cost
par value
legal value
stated value
37
which is effective control over cash disbursements
prenumbered checks
store blank checks securely
all are correct
separation of check authorization and check writing
38
which of these have a normal debit balance
sales returns & allowances
neither sales discounts & sales returns & allowances
sales discounts
sales discounts & sales returns & allowances
