Accounting 301 Final Stein

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  1. Petty Cash
    principle for controling cash disbursments is that all payments must be made by checks. An exception to the rule is petty cash: small payments required for items such as postage, courier fees, minor repairs, and low cost supplies. Part of the imprest system which designates advance money to establish the fund, to withdraw from the fund and to reimburse the fund. A check is recorded with a debit/Petty Cash and Credit/Cash. Cashed and given to the employee designated to keep the petty cash. Prenumbered petty cash reciept must be given and placed in petty cash box.
  2. Management use of Internal Controls
    Urge aadherence to company policies, protects assets, ensure reliable accounting, promote efficient operations
  3. Cash is 100, but the cash recipts/sales equaled 102. How to record cash sales and shortage,
    Debit cash 100, debit cash over and short 2, and credit sales 102
  4. Jackson CO needs to replenish its petty cash fund. It contains 11 in cash and reciepts for supplies for 40 and delivery expense for 49. The fund was initially established with 100. How does the journal entry look?
    Delivery Expense is debited for 49, supplies is debited for 40, and cash is credited for 89
  5. Journalize a new petty fund set up for 200.
    Petty cash is debited for 200 and cash is credit for 200
  6. Internal controld policies and procedure limitations:
    Human Fraud: Involves intent by people to defeat internal controls for personal gains, Cost Benefit Priniciple: Dictates that the costs of internal controls must not exceed their benefits, Human error: can occur from negligence, fatigue, misjudgement or confusion, Internal Control Environment: Management must convey commitment to internal control policies and procedures.
  7. How is the petty cash fund created by the business?
    A check is drawn by the company cassier to establish the petty cash fund. The sum of all petty cash reciepts plus the remaining cash should equal the total of the fund amount at any given time. The petty cashier is reponsible for keeping the fund safe. The petty cashier is responsible for making payments from the petty cash fund. * the petty cash fund is not affected by the replenishment of the journal entry
  8. Proper internal control responsibility assigned
    Proper internal control means that responsibility for a task is clearly established and assigned to one person
  9. Journalize $4 remaining in petty cash and recipets of 50 and 44. 100 beginning.
    Cash is credited for $96
  10. Technology impacts with internal control systems
    Technology advanced systems can record who made the entry, reduced the number of processing errors, designed to require the use of password before access to the system is granted, encouraged the growth of ecommerce, so there is a higher risk of credit card number theft.
  11. Define liquidity
    Referes to a companys ability to pay for its near-term obligations
  12. What is the formula for Day sales uncollected
    Days' sales uncollected = Accounts recievables/net sales * 365
  13. Identify goo cash management techniques:
    Plan cash recipts to meet cash payments when due. Keep minimum level of cash necessary to operate.
  14. Cash Management principles
    Encourage collection of recievables. Delay payment of liabilities. Keep only necessary levels of assets. Plan expenditures. Invest excess cash.
  15. Impacts of internal control companies?
    Requires that managers document all internal control processes that can impact financial reporting. Requires that companies must assess the effectiveness of their internal controls. Requires that each companys annual report contain an internal control report.
  16. What is the flow of the voucher system?
    A purchash requistition is filled out and placed in the voucer. A purchase order is completed and a copy is placed in voucher. A receiving report is completed when the order arrives and placed in voucher. The accounting department approves payment of the invoice and approval is placed in the voucher. The cashier issues a check for the amount of the invoice.
  17. What is a voucher?
    A voucher is an internal document or file used to accumulate information to control cash disbursments and to ensure that a transaction is properly recorded.
  18. Why are liquid assets needed in a business?
    Liquid assets must be readily available to settle near-term debt or obligations.
  19. Control principle of separating recordkeeping from custody of assets.
    A person who controls or has access to an asset must not keep that assets accounting records.
  20. Key principles for Internal Controls
    Apply technoligical controls. insure assets. seperate recordkeeping from custody of assets. establish responsibilities, maintain adequate records. perform regular and independant reviews
  21. Summerize maintaining adequate records
    Keeping detailed records makes it unlikely that assets are list or stolen without detection. Reliable records are a source of information that managers use to monitor activities.
  22. What is a voucher system for
    is a set of procedures and approvals designed to control cash disbursements
  23. Describe dividing responsibility principle?
    Helps to make sure that the work of one individual acts as a check on another individuals work on a related transaction. Often called seperation of duties. Examples are responsibilities placing purchase orders and paying vendors.
  24. When is NOT the petty cash fund debited or credited
    When the account is replenished.
  25. Describe what the Days sales uncollected ration assesses
    It measures how quickly a company can convert its accounts receiveables into cash
  26. Internal controls designed to control cash disbursements
    Use of a vouchers system. Only authorized individuals should be allowed to sign checks. All disbursements should be made by check. Use of a petty cash system.
  27. Cash or cash equivalents
    customer checks, money orders, certified checks. currency and coins. savings accounts called timed deposits.
  28. Good Internal Control designed to protect over the counter reciepts
    Clerks should be required to give the customer a receipt for each sale. The cleck tand the cashier have access to cash but not to the accounting records. Clerks should be required to enter each sale beofre wrapping merchandise.
  29. The Statement of Cash Flows reports:
    Cash inflows and outflows for an accounting period
  30. The section in the Statement of Cash Flows for reporting the purchase of equipment for cash is
    Investing activities
  31. The appropriate section in the Statement of Cash Flows for reporting the cash payment of wages is
    Operating activities
  32. The appropriate section in the Statement of Cash Flows for reporting issuance of common stock for cash is
    financing activities
  33. A companys transactions with its creditors to borrow mone and or to repay the principal amounts of loans are reported as cash flows
    Financing Activities
  34. Activities that involve the production or purchase of merchandise and the sale of goods and services to customers including expenditures related to administering the business, are classified as
    Operating activities
  35. The appropriate section in the Statement of Cash Flows for reporting the receipt of cash dividends from investments in securities is:
    Operating Activities
  36. Cash flows from selling trading securities are reported in the Statement of Cash Flows as part of
    Operating Activities
  37. Cash flows from interest received are reported in the Statement of Cash Flows as part of
    Operating activities
  38. The accounting principle that requires significant noncash finincing and investing activities be reported on the V is the
    Full Disclosure Principle
  39. The appropriate secition of cash flows for reporting the purchas of land in exchange for common stock is
    Schedule of noncash investing or financing activity
  40. The indirect method for the preparation of the operating activities section of the Statement of Cash Flows
    Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities.
  41. The direct method for the preparation of the operating activities section of the statement of cash flows
    Separetly lists each major item of operating cash receipts and cash payments
  42. If a company borrows money form a bank, the interest paid on this loan should be reported on the statement of cash flows
    Financing Activities
  43. When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?
    Decrease in income taxes payable
  44. A machine with a cost of $130000 and accumulated depreciation of $85000 is sold for $50000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is
    $50.000 (only the cash in investing activities)
  45. Which of the following items is reported on the Statement of Cash Flows under financing activites: Declaration of a cash dividend; Payment of a cash dividend; Declaration of a stock dividend; Payment of a stock dividend; stock split
    Payment of a cash dividend
  46. The first line item in the operating activities section of a spreadsheet for a Statement of Cash Flows prepared using the indirect method is:
    Net Income
  47. The accouting records of Miller COcmpany provided the date below: Net Income 17500, Depreciation exp: 84000, Increase in a/r 4400, decrease in inventory 6400, Decrease in prepaid insurance 15000, Decrease in salaries payable 2700, increase in interest payable 900
    27600??
  48. Financial Reportin referes to
    The communication of relevant financial information to decidsion makers
  49. The ability to meet short term obligations and to efficienty generate revenues is called
    Liquidity and efficiency
  50. The ability to generate future revenues and meet long term obligations is reffered to as
    solvency
  51. The ability to provide financial reqards sufficient to attract and retain financing is called
    profitability
  52. Intracompany standards for financial statement analysis
    Are often based on a companys prior preformance.
  53. Industry standards for financial statement analysis
    Are set by the financial performance and condition of the companys industry
  54. The 3 most common tools of financial analysis are
    Horizontal analysis, vertical analysis, ratio analysis
  55. The Comparison of a companys financial condition and performance across time is known as
    Horizontal analysis
  56. THe measurement of key relations amoung financial statement items is know as
    Ration Analysis
  57. The comparison of a companys financial conditions an performance to a base amount is knows as
    Vertical analysis
  58. Extraordinary items:
    Are unusual and infrequent
  59. Which of the following items in not likey to be considered an extraordinary item?
    Loss form an unexpected union strike
  60. Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in dollar amounts and percents are reffered to as
    Comparative statements
  61. A companys sales in 2009 were $250000 and in 2010 were $287500. Using 2009 as the base year, the sales trend percent for 2010 is
    115% 287500/250000 x 100
  62. Current assets minus current liabiities equals to
    Working capital (equity)
  63. Current assets divided by current liabilities is equal to the
    current ratio
  64. Quick assests divided by current liabilities is equal to the
    Acid test ratio
  65. Dividing accounts receivables by net sales and multiplying the results by 365 is equal to the
    Days sales uncollected
  66. Dividing ending inventory by cost of goods sold and multiplying the result by 365 is equal to the
    Days sales in inventory
  67. Net sales divided by average total assets is equal to the
    Total asset turnover
  68. Net income divided by net sales is equal to the
    Profit margin
  69. Which of the following is an internal control procedure used to safeguard a companys assets? Timely deposits of cash receits into a checking acct; seperation of duties, reconciliations of the bank statement
    All of them
  70. Net income divided by acerage total assets is equal to the
    Return on total assets
  71. Effective internal controlds for cash include:
    Making cash payments by prenumbered check, depositing cash in the bank on a timely basis, giving written cash receipts to customers as evidence of payment.
  72. Which of the following statements concerning internal controls is true?
    A strong internal control system provides reasonable assurances that the objectives of a company will be accomplisehed
  73. An internal control system consists of all of the following policiies and procedutes
    Protect assets, urge adherence to company policies, promot efficite opererations
  74. The principles of internal controls include:
    Establish responsibilities
  75. A properly designed internal control system
    Lowers the comapnys risk of loss
  76. When two clerks share the same cash register it is a violation of which internal control principle
    Establish responsibilities
  77. Internal control policies and procedures have limitations including
    Human error, human fraud, cost-benefit principle, collusion
  78. Cash, not including cash equivalents includes:
    Cash Currency and checking accounts
  79. Cash Equivaluents
    Are short term investment sufficiently close to their maturity date value is not sensitive to interest rate changes.
  80. Basic Bank serivces include
    Bank accounts, bank deposits, checking, electronic fund transfer
  81. A Bank statement includes
    THe begining and the ending balance of the depositors account.
  82. Preparing a bank reconciliation on a monthly basis is an example of
    Protecting assets by proving accuracy of cash records
  83. On the bank reconcilliation, an unrecorded debit memorandum for printing checks is
    deducted from the book balance of cash
  84. A company made a bank deposit on September 30 that did not appear on the bank statement dated as of Sept 30. In preparing the sept 30 book balance reconcilliation, the company should
    Add the deposit on the bank statement balance
  85. During the month of September, Norris Industries issued a check in the amount of $845 to a supplier on account. The check cleared the bank during Sept. The dibursement was recorded incorrectly as $854. The journal entry to correct this mistake when discovered will include
    A credit to Accounts Payable for $9
  86. The interest accured on $6500 at 6% for 60 days is
    65 6500x..065
  87. A promissor note
    is a written primise to pay a specified amount of money at a certain date
  88. A company borrowed 10000 by signing a 180 day promissory note at 11%. The maturity value of the not is
    10550 10000x180/360x5 = 550 + 10000
  89. The account receivable turnover measures
    How often, on average, receivables are received and collected during the period
  90. Tepsis account receivable turnover was 9.9 for this year and 11 for last year. Craigs turnover was 9.3 for this year 9.3 for last year. These results imply that.
    Tepsi has the better turnover for both years
  91. The matching principle prescribes
    The use of the allowance method of accounting for bad debts.
  92. The materiality constraint
    States that an amount can be ignored ifits effect on financial statements is unimportant the users business decisions
  93. A method of estimating bad debts expense that involces a detailed examinination of outstanding accounts and their length of time past die is the
    aging of accounts receivable method.
  94. On dec 31 of the current year, a companys unadjusted trial balance included the following accounts receivable, debit balance of $97250. Allowance for doubtful accounts, creid tbalance of $951. What amount should be debited to Bad Debts Expense assuming 6% of outstanding accounts rec at the end of the current year will be uncollectible
    4884 (If 6% of the outstanding receivables will be uncollectible then you need an allowance of $97,250 times 6%= $5,835. Right now you only have $951 in the Allowance so you need to debit the difference of $4,884 to Bad Debts exp)
  95. On Sept 1, a customers account balance of $2300 was determined to be uncollectible. What entry should be recorded on september 1 to record the write off assuming the comapny uses the allowance method.
    Debit Allowance for Doubtful accounts for 2300, credit accounts receivable 2300
  96. Sellers allow customers to use credit cards
    to avoid having to evaluate a customers credit standing for each sale, to lessen the risk of extending credit to customers who can not pay, to speed up receipt of cash from the credit sale, to increase total sales volume
  97. The accounting principle that requires financial statements (including note) to report all relevant information about operations and financial condition of a company is called
    Full Disclosure
  98. The maturity date of a note receivable
    Is the day the not is due to be repaid
  99. Failure by a promissory notes maker to pay the amount due at maturity is know as
    dishonoring a note
  100. The relevant factors in computing depreciation include
    Cst, salvage value, useful life, depreciation method
  101. Salvage value is
    Called residual value, scrap value, and estimat of the assets value at the end of its benefit period
  102. Many companies use an accelerated depresciation method because
    It yields larger depreciation expense in the arly years of an assets life
  103. The modified accelerated cost recover sustems MACRS
    Is included in the US federal income tax rules for depreciating assets.
  104. Land Improvements are
    Assets that increase the usefulness of land, but that have a limited useful life and are subjected to depreciation
  105. The cost of land can include
    the purchase price, assessments by local governements, costs of removing existing structures, fees for insuring the title.
  106. The formula for computing annual straight=line depreciation is
    cost less salvage value dividd by the useful life in years
  107. The total cost of an asset less its accumulated depreciation is called
    book value
  108. Another name for a capital expenditure is
    balance sheet expenditure
  109. Depletion
    Is the process of allocationg the cost of the natural resources to periods in which they are consumned
  110. Intangible assets include:
    Patents, copyrights, trademarks, goodwill
  111. Amoritization
    Is the systematic allocation of the cost of an intangible asset to expense over its estimationed useful life.
  112. Depreciation
    measures the physical deterioration of an an asset
  113. Once the estimated depreciation expense for an asset is calculated
    It may be revised based on new information
  114. The straightline depreciation methode and the double declining balance depreciation method
    are the only acceptable methodes of depreciation for financial reporting.
  115. A method that allocates an equal portion of the total depreciable cost for a plant asset to each unit produced is called
    Units of production depreciation
  116. Lomax Enterprises purchased a depreciable assets for 22000 on march 1, year 1. The assets will be depreciated using the straight line method over its four year useful life. Assuming the assets salvage value is 2000. Lomax Enterprises should recognize depreciation expense in Year 2 in the amount of
    22000-2000/4 = 5000
  117. A company purchased property for $100000. The property included a building, a parking lot, and land. The building was appraised at $62000; the land at 45000, and the lot at $18000. Land should be recorded in the accounting records with an allocated cost of
    • 62000 building .496
    • 45000 land .36
    • 18000 parking .144
    • = 125000 100$%

    =36000 for the land
  118. A merchandising company
    warns net income by buying and selling merchandise
  119. Cost of goods sold
    is the term used for the cost of buying and preparing merchandise for sale
  120. A company had expenses other than cost of goods csold of 250000. Determine sales and gross profit given cost of goods sold was 100000 and net income was 150000.
    • Sales $500000; gross profit 400000
    • Netsales 500000
    • Cogs 100000
    • Gross profit 400000
    • Expenses 250000
    • Net income 150000
  121. Merchandise inventory
    is a current asset
  122. The current periods ending inventory is
    The next periods beginning inventory
  123. Beginning Inventory plus net cost of purchases is
    Merchandise available for sale
  124. The quick assets are defined as
    cash, shorterm investments and current receivables
  125. A companys current assets were 17980, its quick assets were 11420 and its current liabilities were 12190. Its quick ration equals
    • .94
    • To calculate the quick ratio, take the current assets and subtract the inventory (current assets minus inventory is often referred to as the "quick assets"). What you are left with are the items that can be converted into cash immediately. Divide the result by the current liabilities.
    • Quick assets / current liabilities 11420/12190 = 0.94
  126. The acid test ratio differs from the current ratio in that
    Prepaid expenses and inventory are excluded form the calculation of the acid test ratio
  127. The gross margin ratio
    Measures a merchadising firms ability to earn a profit form the sale of inventory
  128. JC Penny had net sales of 28496 million, its cogs was 19092 million and its net income was 997 million. Its gross margin ration equals
    • 33%
    • Formula Gross Profit 9404 / Net Sales 28496
    • Net Sales 28496
    • COGS 19092
    • GROSS PROFIT 9404
    • EXPENSES 8407
    • NETINCOME 997
  129. The credit terms 2/10, n/30 are interpreted as
    2% cash discount if the amount is paid within 10 days, with the balance diue in 30 says
  130. A company uses the perpetual inventory system and recorded the following entry

    Accounts Payable 2500
    Merch inventory 50
    Cash 2450
    The entry reflects a
    Payment of the account payable and recognition of a cash discount taken
  131. A company purchased 1800 if merchandise on dec 5. On dec 7. it returned 200 worth of merchandise. On december 8, it paid the balance in full, taking a 2% disc, The amount if the cash paid on dec 8 equals
    1568

    1800-200 = 1600 x .02% 32. 1600-32 = 1568
  132. Sales returns
    refer to merchasise that customers return to the sellers after the same
  133. Sales less sales discounts less sales returns and allowances equals
    Net sales
  134. On october 1, robertson co sold merch in the amt of 5800 to alberts, with credit terms of 2/10 n/30. The cost of the items sold is 4000, Robertson use the perpetual inventory system. The journal entry or entries that robertson will make on october 1 is
    • A/R 5800
    • Sales 5800

    COGS 4000

    Merch inventory 4000
  135. On oct 1 robertson co sold merchasise in the amt of 5800 to alberts with credit terms of 2/10 n/30. The cost of the items sold is 4000, Robertson uses the perpetual inventory system. Alberts pays the invoice on Oct 8 and takes the discount. The journa entry that robertson makes on oct 8
    • Cash 5684
    • Sales disc 116
    • A/r 5800
  136. OCt 1 robertson co sold merch in the amnt of 5800 to alberts, with terms of 2/10 2/30.. The cost of the items sold is 4000. Robertso uses the perpetual inventory sustem. On oct 4, alberts returns some of the merch. The selling price of the merch is 500 and the cost of the merch returned is 350. The entry of entries that robertson must make on oct 4 are
    • Sales returns and allowances 500
    • Accounts receiveable 500

    • Merch inventory 350
    • COGS 350
  137. An income statement that includes cost of goods sold as another expense and shows only one subtotal for toal expenses is a
    Single step income statement
  138. Multiple step income statements
    Contain more detail than a simple listing of revenues and expenses
  139. An account used in the periodic inventory system that is not used in the perpetual inventory system is
    Purchases
  140. A company pruchased merch inventory at a cost of 4300 with credit terms 3/15, net 45. iF the comany elects to pay within the disc period, what would be the appropriate journal entry.
    • Accts Payable 4300
    • merch inventory 4171
    • cash 129
  141. A company has sales of 1500000 sales disc of 102000 sales returns and allowances of 123000 shipping charges of 15000, slaes commish 34000, net income totaled 263500 and COGS sold of 420000, What is the gross profit/margin ratio?
    • profit margin ratio= net sales-cogs1275000-420000/net sales1275000 = 67.1%
    • net sales 1500000-102000-123000= 1275000
    • COGS 420000
    • gross profit 1080000
    • other expenses 816500
    • net income 263500
  142. acid test ratio
    cash and cash equivelents + short term investments + current receivables/ current liabilities
  143. Merchandise inventory includes
    All goods owned by a company and held for sale
  144. Goods in transit are included in a pruchasers inventory
    when the purchaser is responsible for paying freight charges
  145. Physince inventory counts
    Are necessary under the perpetual system
  146. During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is
    LIFO
  147. The inventory valuation method that tends to smooth out erratic changes in costs is
    Weighted average
  148. Which inventory valuation method assigns a value to the inventory on the balance sheet that approximates current cost and also mimics the actual flow of goods for most businesses
    FIFO
  149. The inventory valuation method that results in the lowest taxable income in a period of inflation is
    LIFO
  150. The consistency principle
    Requires a company to consistently use the same accounting method of inventory valuation unless a change will improve financial reporting
  151. The full disclosure principle
    Requires that when a chage in inventory valuation methode is made, the notes to the financial statements report the type of change, why it was mode and its effect on net income
  152. An overstatement of ending inventory will cause
    An overstatement of assets and equity on the nalance sheet
  153. The inventory turnover ratio
    Measures how quickly a company turns over its merchasdise invenrory
  154. Days sales in inventory is calucuated a
    s ending inventory divided by cost of goods sold times 365
  155. Toysrus had cost of goods sold of 9421 million, ending inventory of 2089 million and average inventory of 1965 million. THe inventory turnover equals
    Inventory turnover - COGS/Avg inventory

    9421 cogs/1965 avg inventory
  156. The inventory valuation method that identifies the invoice cost of each item in ending inventory to determine the cost assigned to that inventory is the
    Specific Identification method
  157. Generally accepted accounting principles require that the inventory of a company be reported at
    Lower of cost or market
  158. The conservatism prinicple
    Requires that when there are more than one equally likely estimates of amounts expected to be received or paid in the future, then the less optimistic amount shoud be used.
  159. A company normall sells its product for 40 per unit. However, the seling price has fallen to 30 per unit. The companys current inventory consists of 200 units purchased at 32 per unit replacement cost has now fallen to 26 per unit. Calculate the value of this companys inventory at the lower of cost or market.
    $5200 26x200
  160. Inder the FIFO cost flow assumption during a period of inflation, which of the following is true
    Income tax expenses with be higher than under LIFO, Gross margin will be highter than under lIFO, COGS will be highter the under LIFO
  161. The accounting process begins with
    Analysis of business transactions and source documents
  162. Unearned revenues are
    Liabilities created when a customer pays in advance for pruducts or services before the revenue is earned
  163. Prepaid expenses are
    assets that represent prepayments of future expenses
  164. A list of all accounts and the identification number assigned to each account used by a company is calle a
    Chart of accounts
  165. What is the normal balance of an expense
    debit
  166. Wages payable normal balance
    credit
  167. A credit entry
    Is always a decrease in an account
  168. Double entry accounting ia an accounting system
    That records the effects of transactions and other events in at least two accounts with equal debits and credits
  169. Rocky Industries received its telephone bill in the amnt of 300, and immediately paid it,. ROckys general journal entry to record this transaction will include
  170. Debit to telephone expense for 0300
  171. Wisconsin Rentals purchased office supplies on credit. The general journal entry to record this transaction will include
    Credit to accounts payable
  172. A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances is call
    Trial balance
  173. Which finacial statement reports an organizations financial position at a point in time
    Balance Sheet
  174. Inge Industries reveived 3000 from a customer for serives rendered and not previously recorded. Inges genral journal entry ot record this transaction will be
    Debit cash, credit serivces revenue
  175. Managment services, INc provides serices to clients. On May 1st a client prepaid mangagement services $60000 for 6 months services in advance. Management services general journal entry to record this tranaction will include a
    Credit to unearned management fees for 60000
  176. On sept 30 the cash account of value company had a normal balance of 5000. During september the account ws debited for a total of 12200 amd credited for a total of 11500. What was the balance in the cash account at the beginning of sept.
    A 4300 debit balance 12200-11500 = 700 - 5000 = 4300
  177. A simple account form widely used in accounting to illustrate how debits and credits work is called a
    T account
  178. The process of transferring general journal informaiton to the lefger is
    posting
  179. Which of the following is the usual final setp in the accounting cucle
    Preparing a post closing trial balance
  180. An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a
    contra account
  181. The periodic expense created by allocating the cost of plant and equipment in the periods in which tey are used, representing the expense of using the asset is called
    Depreciation
  182. A company had not office supplies available at the beginning of the year. During the year, the compabny purchased 250 worth of office supplies. On dec 31 $75 work of office supplies remained. How much should the company report as office supplies expense for the year?
    $175
  183. On Jan 1 a company purchased a five year insurance policy for 1800 with coverage starting immediately. If the pruchase was recorded in the prepaid insurance account and the company records adjustments only at year end, the adjustments only a year end the adjusting entry at the end of the first year is
    Debit insurance expense, 360 creidt prepaid insurance 360
  184. Unearned revenueis reported on the financial statement as
    An asset on the balance sheet
  185. What asset is not depreciated
    land
  186. what does not require an adjusting entry at year end
    Cash investments by stockholders
  187. The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is
    Debit salaries expense and credit salaries payable
  188. The difference between the cost of an asset and the accumulated depteciation for that asset is called
    Book value
  189. On Jan 1, Able Co purchased equipment costing 135000 with an estimated useful life of five years. What is the amount that should be recorded aws depreciation on dec 31
    27000 (135000/5)
  190. The adjusted trial balance contains information pretaining to
    All general ledger accounts
  191. Financial statements are typically prepared in the following order
    Income statement, statment of retained earnings, balance sheet
  192. Which of the following accounts would be closed at the end of the accounting period
    Fees earned
  193. What is not on the post closing trial balance
    dividends
  194. The special account used only in the closing process to temporaily hold the amounts of revenues and expenses before the net differences is added to (or subtracted from) the retained earnings account is the
    income statement
  195. After the closing entries have been journalized and posted what will be the balance in the retained earnings account
    Total revenues 125000
    Total expenses 60000
    Retained Earnings 80000
    Dividends 15000
    130000 (125000-60000+80000-15000)
  196. Which of the following accounts would nbot be impacted by adjusting journal entries
    cash
  197. A company earned 2000 in net income for october. Its net sales for october were 10000. Its profit margin is
    20%
  198. The current ratio
    is used to help evaluate a companys ability to pay its short term obligations

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