The following Office Supplies account information is available for Able, Inc. Beginning balance $1,800 Office Supplies expensed 5,000 Ending balance 2,000 From the above information, calculate the amount of office supplies purchased. A) $5,200 B) $5,000 C) $1,800 D) $2,000 ANSWER A .Office Supplies: Ending balance $2,000 Add Office Supplies expensed 5,000 7,000 Less beginning […]
The asset account, Office Supplies had a beginning balance of $5,300. During the accounting period, office supplies were purchased, on account, for $4,900 A physical count, on the last day of the accounting period, shows $2,300 of office supplies on hand. What is the amount of Supplies Expense for the accounting period? A) $4,900 B) […]
The permanent accounts—assets, liabilities, and stockholders’ equity—are closed to the Common Stock account. Indicate whether the statement is true or false ANSWER FALSE
When using a four-column account, the posting reference column allows the user of the financial data to trace the amounts in the journal back to the ledger. Indicate whether the statement is true or false ANSWER FALSE
A company using the perpetual inventory system purchased inventory worth $550,000 on account with credit terms of 2/15, n/45. Defective inventory of $70,000 was returned 3 days later, and the accounts were appropriately adjusted If the company paid the invoice 25 days later, the journal entry to record the payment would be ________. A) $550,000 […]
The consistency principle states that businesses should report the same amount of ending merchandise inventory from period to period. Indicate whether the statement is true or false ANSWER FALSE
What does “2/10” mean, with respect to “credit terms of 2/10, n/30”? A) A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date. B) Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice. […]
On January 1, 2016, Prepaid Insurance of Maywood, Inc. had a beginning balance of $1,400. Three months of insurance premiums remain in the beginning balance On February 1, 2016, the company paid an annual insurance premium in the amount of $3,700 for the period beginning April 1. On February 28, 2016, the balance in Prepaid […]
A company reports in its financial statements that it uses the FIFO method of inventory costing. This is an example of the disclosure principle. Indicate whether the statement is true or false ANSWER TRUE
The adjusting process zeroes out all revenue accounts and all expense accounts. Indicate whether the statement is true or false ANSWER FALSE
