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UARK ACCT I FINAL REED (All Chapters) QUESTIONS AND
CORRECT ANSWERS!!
McCarthy and Company had the following final balances after the first year of operations: assets, $35,900; stockholders' equity, $14,700; dividends, $2,200; and net income, $9,900. What is the amount of McCarthy and Company's liabilities? a. $22, b. $35, c. $10, d. $21,200 - ANSWER>>d. $21,
The accounting equation is defined as: a. Assets = Liabilities + Stockholders' Equity. b. Assets = Liabilities − Stockholders' Equity. c. Net Income = Revenues − Expenses. d. Liabilities + Revenues = Assets. - ANSWER>>a. Assets = Liabilities + Stockholders' Equity.
Use the following appropriate amounts to calculate net income: Revenues, $12,800; Liabilities, $3,800; Expenses, $4,700; Assets, $18,200; Dividends, $1,900. a. $2, b. $8, c. $7, d. $6,200 - ANSWER>>b. $8,
Nina Corp. had the following net income (loss) in the first three years of operation: $6,700, ($1,000), and $2,400. If the Retained Earnings balance at the end of year three is $500, what was the total amount of dividends paid over these three years?
a. $8, b. $ c. $ d. $7,600 - ANSWER>>d. $7,
Financial accounting: a. Provides information primarily for external decision-makers. b. Provides information primarily for a company's employees. c. Provides information primarily for the use of managers of the company. d. Is primarily used to compute a company's tax obligation. - ANSWER>>a. Provides information primarily for external decision-makers.
One advantage of the corporate form of business is: a. Limited liability. b. Less capital invested. c. Must have at least 20 investors to establish. d. Double taxation. - ANSWER>>a. Limited liability.
Net income can best be described as: a. Net cash received by a company during the year. b. Revenues minus expenses. c. The amount of profits retained in a company for the year. d. Resources of a company. - ANSWER>>b. Revenues minus expenses.
Using the information below from the accounting records of Thomas Corporation, owners' claims to the company's resources amount to: Assets $1,200, Liabilities $800,
A company received a bill for newspaper advertising services received, $390. The bill will be paid in 10 days. How would the transaction be recorded today? a. Debit accounts payable $390, credit cash $ b. Debit accounts payable $390, credit advertising expense $ c. Debit advertising expense $390, credit accounts payable $ d. Debit advertising expense $390, credit cash $390 - ANSWER>>c. Debit advertising expense $390, credit accounts payable $
When a company pays utilities of $1,820 in cash, the transaction is recorded as: a. Debit utilities expense $1,820, credit utilities payable $1,820. b. Debit utilities expense $1,820, credit cash $1,820. c. Debit cash $1,820, credit utilities expense $1,820. d. Debit utilities payable $1,820, credit cash $1,820. - ANSWER>>b. Debit utilities expense $1,820, credit cash $1,820.
Summer Leasing received $10,300 for 24 months rent in advance. How should Summer record this transaction? a. Debit cash; credit unearned revenue b. Debit cash; credit service revenue c. Debit rent expense; credit cash d. Debit prepaid rent; credit rent expense - ANSWER>>a. Debit cash; credit unearned revenue
Assume that $17,400 cash is paid for insurance to cover the next year. The appropriate debit and credit are: a. Debit insurance expense $17,400, credit prepaid insurance $17,400. b. Debit prepaid insurance $17,400, credit insurance expense $17,400. c. Debit prepaid insurance $17,400, credit cash $17,400. d. Debit cash $17,400, credit prepaid insurance $17,400. - ANSWER>>c. Debit prepaid insurance $17,400, credit cash $17,400.
The accounts payable account has a beginning balance of $10,600 and the company purchased $45,000 of supplies on account during the month. The ending balance was $19,500. How much did the company pay to creditors during the month? a. $74, b. $36, c. $65, d. $46,100 - ANSWER>>b. $36,
When a company pays $2,100 dividends to its stockholders, the transaction should be recorded as: a. Debit dividends; credit cash. b. Debit dividends; credit accounts payable. c. Debit cash; credit dividends. d. Debit retained earnings; credit dividends. - ANSWER>>a. Debit dividends; credit cash.
Clement Company paid an account payable related to a previous utility bill of $950. This transaction should be recorded as follows on the payment date: a. Debit utilities expense $950, credit cash $950. b. Debit accounts payable $950, credit cash $950. c. Debit cash $950, credit accounts payable $950. d. Debit cash $950, credit utilities expense $950. - ANSWER>>b. Debit accounts payable $950, credit cash $950.
On July 7, Saints Inc. received $9,000 in cash from a customer for services to be provided on October 10. Which of the following describes how the transaction should be recorded on July 7? a. Debit cash $9,000, credit service revenue $9, b. Debit unearned revenue $9,000, credit cash $9,
a. Debit to Salaries Expense for $32,000. b. Credit to Salaries Expense of $8,000. c. Debit to Salaries Payable for $24,000. d. Credit to Salaries Payable for $8,000. - ANSWER>>d. Credit to Salaries Payable for $8,000.
At the beginning of December, Global Corporation had $2,000 in supplies on hand. During the month, supplies purchased amounted to $5,000, but by the end of the month the supplies balance was only $1,000. What is the appropriate month-end adjusting entry? a. Debit Cash $4,000, credit Supplies $4,000. b. Debit Supplies $6,000, credit Supplies Expense $6,000. c. Debit Supplies Expense $6,000, credit Supplies $6,000. d. Debit Cash $2,000, credit Supplies $2,000. - ANSWER>>c. Debit Supplies Expense $6,000, credit Supplies $6,000.
Adam's Apples opened for business on January 1, 2019, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Adam's Prepaid Insurance account as of December 31, 2019? a. $ 9,000. b. $18,000. c. $30,000. d. $48,000. - ANSWER>>b. $18,000.
Border Inc. took out a 1-year, 8%, $100,000 loan on March 31, 2019. Interest is due upon maturity of the loan. The loan and interest must be paid back on March 31, 2020. As of December 31, 2019, what amount, if any, should Border Inc. report for interest payable? a. $6,000. b. $2,000. c. $0.
d. $8,000. - ANSWER>>a. $6,000.
The following financial information is from Daily Construction Company: Accounts Payable $15, Buildings 80, Cash 10, Accounts Receivable 9, Sales Tax Payable 4, Retained Earnings 47, Supplies 40, Notes Payable (due in 18 months) 35, Interest Payable 3, Common Stock 35,
What is the amount of current assets, assuming the accounts above reflect normal activity? a. $20,000.
What is the amount of current liabilities? a. $63,000. b. $28,000. c. $45,600. d. $22,000. - ANSWER>>b. $28,000.
The following table contains financial information for Trumpeter Inc. before closing entries: Cash $12, Supplies 4, Prepaid Rent 2, Salary Expense 4, Equipment 65, Service Revenue 30, Miscellaneous Expenses 20, Dividends 3, Accounts Payable 5, Common Stock
Retained Earnings 8, What is Trumpeter's net income? a. $3,500. b. $2,500. c. $5,000. d. $5,500. - ANSWER>>d. $5,500.
On September 1, 2019, Gold Magazine sold 400 one-year subscriptions for $90 each. The total amount received was credited to Unearned Revenue. What would be the required adjusting entry at December 31, 2019? a. Unearned Revenue 36, Service Revenue 36,
b. Service Revenue 24, Unearned Revenue 24,
c. Unearned Revenue 24, Service Revenue 24,
d. Unearned Revenue 12, Service Revenue 12,000 - ANSWER>>d. Unearned Revenue 12, Service Revenue 12,
Earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The company declared a dividend of $1.3 million during the year. What was the net income earned during the year? a. $1.9 million.
Bank service fees 60
What is the amount of cash that should be reported in the balance sheet as of August 31? a. $20,700. b. $17,200. c. $18,700. d. $19,300. - ANSWER>>d. $19,300.
The following information pertains to Monterey Company's cash balance and bank reconciliation as of August 31: Company balance before reconciliation $3, Checks outstanding $ Notes collected by the bank $ Service fee $ Deposits outstanding $1, What is the correct cash balance for Monterey Company? a. $3,680. b. $3,180. c. $4,250. d.$3,220. - ANSWER>>c. $4,250.
On November 30, Steeler Corporation's Cash account showed a balance of $12,
before the bank reconciliation was prepared. After examining the November bank statement and items included with it, the company's accountant found the following items: Checks outstanding $2, Deposits outstanding 1, NSF check 150 Service fees 40
Error: Steeler Corp. wrote a check for $30 but recorded it incorrectly for $300.
What is the amount of cash that should be reported in the company's balance sheet as of November 30? a. $9,860. b. $12,080. c. $10,130. d. $10,410. - ANSWER>>b. $12,080.
The following data were obtained from the bank statement and from the process of reconciling it: Bank service charges = $ 20 Deposit outstanding = $ Interest earned on the bank account = $ Checks outstanding = $
Which items should be deducted from and added to the bank balance in completing the reconciliation? a. Deduct checks outstanding; add service charges and deposit outstanding. b. Deduct interest earned; add deposit outstanding. c. Deduct checks outstanding; add deposit outstanding.
c. Prepare federal and state tax returns d. Both measure and communicate financial information to external parties. - ANSWER>>d. Both measure and communicate financial information to external parties.
When net income is greater than dividends a. Assets always increase. b. Liabilities always decrease. c. Stockholders' equity always increases. d. Cash flows are always positive - ANSWER>>c. Stockholders' equity always increases
On 12/31/2017 Myers Inc. reported total assets of $5,670; total liabilities of $2,950; dividends of $257; revenues of $2,870 and total expenses of $1,170. What was the firm's net income and total stockholders' equity? Net income Stockholders' equity a. $1,700 $2, b. $1,443 $2, c. $1,700 $2, d. $1,957 $2,720 - ANSWER>>a. $1,700 $2,
At the beginning of the year (January 1), the firm has $15,300 of common stock outstanding and retained earnings of $3,300. During the year, the company reports net income of $3,010 and pays dividends of $2,640. There were no other relevant changes. Calculate Men at Work Inc.'s ending total stockholders' equity a. $24, b. $18, c. $21, d. Cannot be determined without liabilities and stockholders' equity. - ANSWER>>b. $18,
Which of the following accounts is not found on a balance sheet? a. Assets b. Liabilities c. Stockholders' equity d. Dividends - ANSWER>>d. Dividends
When a company pays dividends to its stockholders, the transaction should be recorded as: a. Debit dividends; credit cash. b. Debit dividends; credit accounts payable. c. Debit cash; credit dividends. d. Debit retained earnings; credit dividends. - ANSWER>>a. Debit dividends; credit cash.
In 2015, Falco reported $35,000 in salaries expense. On December 31st 2015, the company had a $3,000 balance in its salaries payable. On January 15th the firm paid salaries of $12,000 cash. The journal entry to record this transaction will include a. Debit salaries expense $12, b. Debit salaries expense $9, c. Credit cash $9, d. Credit cash $3,000 - ANSWER>>b. Debit salaries expense $9,
The following amounts are reported in the ledger of Mariah Company: Assets of $80,000; Liabilities of $36,000; and Common Stock of $32,000. What is the balance in Retained Earnings? a. $12, b. $22, c. $34, d. The correct answer is not listed. - ANSWER>>a. $12,
Examine the following accounts receivable T account. What is the ending balance in the account? Accounts Receivable 3,400 4, 6, a. 5, b. 7, c. 8, d. Cannot be determined - ANSWER>>a. 5,
Thomas Dolby provides services to customers totaling $6,300, for which it billed the customers. How would the transaction be recorded? a. Debit cash $6,300, credit service revenue $6, b. Debit accounts receivable $6,300, credit service revenue $6, c. Debit service revenue $6,300, credit accounts receivable $6, d. Debit accounts receivable $6,300, credit cash $6,300 - ANSWER>>b. Debit accounts receivable $6,300, credit service revenue $6,
On April 1st Boy George provided music lessons for $500 on account. On April 15th he received full payment. What is the journal entry required on April 15th? a. Cash 500 Accounts Receivable 500 b. Cash 500 Service Revenue 500 c. Accounts Receivable 500 Service Revenue 500 d. Accounts Receivable 500 Cash 500 - ANSWER>>a. Cash 500 Accounts Receivable 500
On January 1st John Waite Company purchased a 2 year insurance policy for $5,000. What is the journal entry the firm would make to record this transaction. a. Cash 5, Prepaid Insurance 5, b. Unearned Revenue 5, Cash 5, c. Prepaid Insurance 5, Cash 5, d. Insurance Expense 5, Prepaid Insurance 5,000 - ANSWER>>c. Prepaid Insurance 5, Cash 5,
Which of the following steps would come first in the accounting cycle? a. Prepare a trial balance b. Prepare financial statements c. Make adjusting entries d. Record external transactions - ANSWER>>d. Record external transactions
At the beginning of 2017, Flock of Seagulls Company reported a balance in retained earnings of $2,600. The firm's income statement reported net income for 2017 of $5, and the cash flow statement reported cash dividends of $1,000. What was the balance in Retained Earnings on December 31, 2017? a. $7, b. $6, c. $8, d. $6000 - ANSWER>>b. $6,
Receiving cash for an accounts receivable:
