After the bank reconciliation is prepared, the entry to record bank service

QUESTION

Question
1:After the
bank reconciliation is prepared, the entry to record bank service charges would
have a credit to:
a. Bank Service Charge Expense
b. Cash
c. Petty Cash
d. Cash Short and Over
e. None of the above

Question
2:Annie Company
estimates uncollectible accounts using the percentage-of-receivables method and
expects that 5 percent of outstanding receivables will be uncollectible for
2010. The balance in Accounts Receivable is $200,000, and the allowance account
has a $3,000 credit balance before adjustment at year-end. The uncollectible
accounts expense for 2010 will be:
a $7,000
b. $10,000
c. $13,000
d. $9,850
e. None of the above

Question
3:Annie Company
issued its own $10,000, 90-day, non interest-bearing note to a bank. If the
note is discounted at 10 percent, the proceeds to Annie are:
a. $10,000
b. $9,000
c. $9,750
d. $10,250
e. None of the above

Question
4:On 2010 July
1, Annie Company purchased equipment for $400,000, and installation and testing
costs totaled $40,000. The equipment has an estimated useful life of 10 years
and an estimated salvage value of $40,000. If Annie uses the
double-declining-depreciation method, the depreciation expense for 2010 is:
a. $88,000
b. $72,000
c. $36,000
d. $44,000
e. $40,000

Question
5:The result of
recording a capital expenditure as a revenue expenditure is an:
a. Overstatement of current year’s expense
b. Understatement of current year’s expense
c. Understatement of subsequent year’s net
income
d. Overstatement of current year’s net income
e. None of the above

Question
6:A truck
costing $45,000 and having an estimated salvage value of $4,500 and an original
life of five years is exchanged for a new truck. The cash price of the new
truck is $57,000, and a trade-in allowance of $22,500 is received. The old
truck has been depreciated for three years using the straight-line method. The
new truck would be recorded at:
a. $55,200
b. $57,000
c. $34,500
d. $43,200
e. None of the above

Question
7:Which of the
following is not an advantage of the corporate form of organization?
a. Continuous existence of the entity
b. Limited liability of stockholders
c. Government regulation
d. Easy transfer of ownership

Question 8:Treasury
stock should be shown on the balance sheet as a(n):
a. Reduction of the corporation’s stockholders’ equity
b. Current asset
c. Current liability
d. Investment asset

Question 9:When
the stockholders invest cash in the business, what is the effect?
a Liabilities
increase and stockholders equity increases
b Both assets and liabilities increase
c Both assets and stockholders equity
increase
d None
of the above

Question
10:The ending
balance in retained earnings is shown in the:
a.
Income
statement
b.
Statement
of retained earnings
c.
Balance
sheet
d.
Both
(b) and (c)
e.
Both
(a) and (c)
f.
(a),
(b) and (c)

Question
11:A cash
dividend of $500 was declared and paid to stockholders. The correct journal
entry to record the declaration is:
a. DR Capital stock 500 and CR Cash 500
b. DR Cash 500 and CR Dividends 500
c. DR Dividends 500 and CR Cash 500
d. DR Cash 500 and CR Capital stock 500

Question
12:If $3,000
has been earned by a companys workers since the last payday in an accounting
period, the necessary adjusting entry would be:
a. Debit an expense and credit a liability.
b. Debit an expense and credit an asset.
c. Debit a liability and credit an asset.
d. Debit a liability and credit an expense.

Question
13:The accrual
basis of accounting:
a. Recognizes revenues only when cash is
received
b. Is used by almost all companies
c. Recognizes expenses only when cash is paid
out
d. Recognizes revenues when sales are made or
services are performed and recognizes expenses only when cash is paid out.

Question
14:The need for
adjusting entries is based on:
a. The matching principle
b. Source documents
c. The cash basis of accounting
d. Activity that has already been recorded in the proper accounts.

Question
15:Which of the
following statements is false regarding the closing process?
a. The Dividends account is closed to Income
Summary.
b. The closing of expense accounts results in a
debit to Income Summary.
c. The closing of revenues results in a credit
to Income Summary.
d. The Income Summary account is closed to the Retained Earnings
account.

Question
16:Which of the
following statements is true regarding the classified balance sheet?
a. Current assets include cash, accounts
receivable, and equipment.
b. Plant, property, and equipment is one
category of long-term assets.
c. Current liabilities include accounts payable,
salaries payable, and notes receivable.
d. Stockholders’ equity is subdivided into current and long-term
categories.

Question
17:The
underlying assumptions of accounting includes all the following except:
a. Business entity
b. Going concern
c. Matching
d. Money measurement and periodicity

Question
18:Annie
Company began the accounting period with $60,000 of merchandise, and net cost
of purchases was $240,000. A physical inventory showed $72,000 of merchandise
unsold at the end of the period. The cost of goods sold of Annie Company for
the period is:
a. $300,000
b. $228,000
c. $252,000
d. $168,000
e. None of the above

Question
19:A classified
income statement consists of all of the following major sections except for:
a. Operating revenues
b. Cost of goods sold
c. Operating expenses
d. Non-operating revenues and expenses
e. Current assets

Question 20:A
business purchased merchandise for $12,000 on account; terms are 2/10, n/30. If
$2,000 of the merchandise was returned and the remaining amount due was paid
within the discount period, the purchase discount would be:
a. $240
b. $200
c. $1,200
d. $1,000
e. $3,600

Question 21:Annie
Company began the accounting period with inventory of 3,000 units at $30 each.
During the period, the company purchased an additional 5,000 units at $36 each
and sold 4,600 units. Assume the use of periodic inventory procedure. The cost
of ending inventory using weighted-average is:
a. $114,750
b. $157,600
c. $122,400
d. $109,650
e. None of the above

Question 22:Annie
Company began the accounting period with inventory of 3,000 units at $30 each.
During the period, the company purchased an additional 5,000 units at $36 each
and sold 4,600 units. Assume the use of periodic inventory procedure. The cost
of goods sold using weighted-average is:
a. $147,200
b. $160,350
c. $155,250
d. $114,000
e. None of the above

Question
23:During a
period of rising prices, which inventory method might be expected to give the
highest net income?
a. Weighted-average
b. FIFO
c. LIFO
d. Specific identification
e. Cannot determine

Question 24:The
following information: related to the bank reconciliation of the Tony Company:

Balance per bank statement

$1,951.20

Balance per ledger

1,869.60

Deposits in transit

271.20

Outstanding checks

427.80

NSF check

61.20

Service charges

13.80

The adjusted/correct cash balance
is:
a. $1,794.60
b. $1,719.60
c. $1,638.00
d. $1,713.00
e. $1,876.20

Question
25:In
a bank reconciliation, deposits in transit should be:
a. Deducted from the balance per books
b. Deducted from the balance per bank statement
c. Added to the balance per ledger
d. Added to the balance per bank statement
e. Disregarded in the bank reconciliation

ANSWER

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