Exam 1-5.docx 5j3t2

Nigiri Inc. began operations on October 1, 2017. During October, Nigiri sold ordinary shares for ¥660,000,000, earned net income of ¥96,000,000, and paid dividends of ¥2,967,000. Equity at the end of October is ¥756,000,000. ¥93,033,000. ¥753,033,000. ¥96,000,000. ______________________ The ing process involves all of the following except

communicating financial information to s by preparing financial reports. recording non-quantifiable economic events. identifying economic events that are relevant to the business. analyzing and interpreting financial reports.

Most assets should be valued at cost because fair values are not relevant. may be higher or lower than historical cost. may not be representationally faithful. are not useful for decision-making.

Which of the following techniques is not used by ants to interpret and report financial information? Special memos for each class of external s. Ratios. Charts. Graphs. __________________________

Which of the following would not be considered internal s of ing data for a company?

Salesmen of a company. Creditors of a company. The president of a company. The controller of a company

O' Hara Company began operations on December 1, 2017. Presented below is selected information related to O' Hara Company at December 31, 2017. Equipment Cash Service Revenue

₤160,000 56,000 432,000

Utilities Expense s Receivable

₤ 24,000 108,000

Salaries and Wages Expense 188,000

Rent Expense

52,000

Notes Payable

40,000

s Payable

64,000

Dividends

60,000

Share Capital-ordinary 112,000 Retained earnings at December 31, 2017 is (Exclude s Payable and deduct all other expenses and dividents) £60,000. £108,000. £88,000. £220,000.

During July, its first period of operations, Aju Inc. sold ordinary shares for W1,060,000,000, earned net income of W130,000,000, and paid dividends of W27,000,000. Equity at the end of July is W1,033,000,000. W103,000,000. W1,163,000,000. W1,190,000,000.

The first step in solving an ethical dilemma is to

weigh the impact of each alternative on various stakeholders. identify and analyze the principal elements in the situation. identify the alternatives. recognize an ethical situation and the ethical issues involved

The Sarbanes-Oxley Act determines U.S tax regulations. internal control standards of U.S. publicly traded companies. internal control standards as enforced by the IASB. international tax regulations.

Harrod's Inc. purchased land for ₤50,000 in 2007. At December 31, 2017, an appraisal determined the fair value of the land is ₤65,000. If Harrod's follows the historical cost principle, in the 2017 financial statements, the land will be reported at ₤50,000 on the statement of financial position. ₤50,000 on the income statement. ₤65,000 on the income statement. ₤65,000 on the statement of financial position.

External s of ing information include all of following except all of these answer choices are correct. the shareholders of Air Italy. a potential customers of Olivetti. the management of Pirelli.

IFRS is considered to be more

rules-based and less principles-based than GAAP. principles-based and less rules-based than GAAP. none of these answer choices are correct. detailed than GAAP.

Your answer is correct. Which of the following would not be considered internal s of ing data for a company? Salesmen of a company. The president of a company. The controller of a company. Creditors of a company.

Which of the following is true? Transaction analysis is basically the same under GAAP and IFRS. IFRS companies have agreed to adopt the Sarbanes-Oxley Act related to internal control in 2015. Financial frauds have not occurred in U.S. companies because GAAP has detailed ing and disclosure requirements. Equity is defined under GAAP as the residual interest in the liabilities of the company.

The body that has the power to prescribe the ing practices and standards used by most US companies is the GAAP. IASB. IFRS. FASB.

Internal s of ing information include the International ing Standards Board. the Chief Financial officer of Credit Suisse. the shareholders of Royal Dutch Shell. the State istration of Taxation of China.

Which of the following techniques is not used by ants to interpret and report financial information? Special memos for each class of external s. Charts. Ratios. Graphs.

Internal s of ing information include all of following except the Shareholders of Airbus. CEO of Sony. Human Resources department at Hyundai. Marketing department at Braun.

Which of the following is an external of ing information? Finance directors. Managers. Labor unions. Company officers.

Sing Tao Inc. began operations on June 2, 2017. During June, Sing Tao sold ordinary shares for HK$22,900,000, earned revenue of HK$4,040,000, incurred expenses of HK$2,060,000, and paid dividends of HK$60,000. Retained earnings at June 30, 2017 HK$26,941,000. HK$1,920,000. HK$1,980,000. HK$24,820,000.

Which one of the following is not an external of ing information? Customers. All of these answer choices are correct. Investors. Regulatory agencies.

Which of the following events cannot be quantified into dollars and cents and recorded as an ing transaction?

Payment of income taxes. The sale of store equipment. The appointment of a new ing firm to perform an audit. The purchase of a new computer.

Which of the following would not be considered an internal of ing data for GHI Company? President of the employees' labor union. Merchandise inventory clerk. President of the company.

Production manager.

Bookkeeping primarily involves which of the following parts of the ing process? Recording. Identification. Communication. Analysis.

Saira’s Service Shop started the year with total assets of $300,000 and total liabilities of $240,000. During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and paid dividends of $60,000. Equity at the end of the year was $360,000. $240,000. $300,000. $270,000.

Nigiri Inc. began operations on October 1, 2017. During October, Nigiri sold ordinary shares for ¥660,000,000, earned net income of ¥96,000,000, and paid dividends of ¥2,967,000. Retained earnings at the end of October is ¥756,000,000. ¥753,033,000. ¥96,000,000. ¥93,033,000.

Most assets should be valued at cost because fair values may not be representationally faithful.

may be higher or lower than historical cost. are not relevant. are not useful for decision-making.

Harrod's Inc. purchased land for ₤50,000 in 2007. At December 31, 2017, an appraisal determined the fair value of the land is ₤65,000. If Harrod's follows the historical cost principle, in the 2017 financial statements, the land will be reported at ₤50,000 on the statement of financial position. ₤65,000 on the statement of financial position. ₤50,000 on the income statement. ₤65,000 on the income statement.

EI Greco Corporation began operations on January 1, 2017. Presented below is selected information related to EI Greco at December 31, 2017. Equipment

€435,000 Utilities Expense

€ 54,000

Cash

126,000 s Receivable

Service Revenue

972,000 Salaries and Wages Expense 363,000

Rent Expense

117,000 Notes Payable

s Payable

66,000 Dividends

123,000 144,000 135,000

Share Capital-Ordinary 252,000 Salaries and Wages Payable

24,000

Supplies

60,000

45,000 Advertising Expense

Net income (loss) reported on the income statement for the month of December is (Net income in income statement is revenue – expenses. Don’t subtract supplies and salaries payable) €378,000. €270,000. €243,000. €144,000.

The Duce Company has five plants nationwide that cost $300 million. The current fair value of the plants is $500 million. The plants will be recorded and reported as assets at

$300 million. $800 million. $200 million. $500 million.

Harrod's Inc. purchased land for ₤50,000 in 2007. At December 31, 2017, an appraisal determined the fair value of the land is ₤65,000. If Harrod's follows the historical cost principle, in the 2017 financial statements, the land will be reported at ₤65,000 on the income statement. ₤50,000 on the statement of financial position. ₤50,000 on the income statement. ₤65,000 on the statement of financial position

Sing Tao inc. began operations on June 2, 2017. During June, Sing Tao sold ordinary shares for HK$22,900,000, earned revenue of HK$4,040,000, incurred expenses of HK$2,060,000, and paid dividends of HK$60,000. Equity at the end of June is HK$26,941,000. HK$1,980,000. HK$24,820,000. HK$1,920,000

O' Hara Company began operations on December 1, 2017. Presented below is selected information related to O' Hara Company at December 31, 2017. Equipment Cash Service Revenue

₤160,000 56,000 432,000

Utilities Expense s Receivable

₤ 24,000 108,000

Salaries and Wages Expense 188,000

Rent Expense

52,000

Notes Payable

40,000

s Payable

64,000

Dividends

60,000

Share Capital-ordinary 112,000

At December 31, 2017, assets total £324,000. £388,000. £216,000. £280,000. ___________ The ing process includes each of the following except

recording. communication. convergence. identification.

Which of the following would not be considered internal s of ing data for a company?

Creditors of a company. Salesmen of a company. The president of a company. The controller of a company.

Convergence refers to

the process of reducing the differences between IFRS and GAAP. using the same ing principles from one period to the next. use of the same ing principles by all companies.

the elimination of all ing standard-setting bodies except the International ing Standards Board. ______________________________________ Benito Company began the year with equity of €630,000. During the year, the company recorded revenues of €900,000, expenses of €684,000, and paid dividends of €60,000. What was Benito’s equity at the end of the year?

€846,000. €918,000. €774,000. €1,458,000.

During July, its first period of operations, Aju Inc. sold ordinary shares for W1,060,000,000, earned net income of W130,000,000, and paid dividends of W27,000,000. Equity at the end of July is W1,163,000,000. W1,190,000,000. W1,033,000,000. W103,000,000.

Sing Tao Inc. began operations on June 2, 2017. During June, Sing Tao sold ordinary shares for HK$22,900,000, earned revenue of HK$4,040,000, incurred expenses of HK$2,060,000, and paid dividends of HK$60,000. Retained earnings at June 30, 2017 HK$24,820,000. HK$26,941,000. HK$1,920,000. HK$1,980,000

Bruni Corporation began operations on January 1, 2017. During January, Bruni earned revenue of €135,000, incurred expenses of €66,000, and paid dividends of €9,000. Retained earnings at the end the month is

€135,000. €69,000. €60,000. €78,000.

Which of the following is an external of ing information? Labor unions. Finance directors. Company officers. Managers.

During July, its first period of operations, Aju Inc. sold ordinary shares for W1,440,000,000, earned net income of W195,000,000, and paid dividends of W40,500,000. Retained earnings at the end of July is W154,500,000. W1,635,000,000. W1,399,500,000. W1,594,500,000.

When journalizing, the reference column is used to reference the source document. used to reference the journal page. used to reference the financial statements. left blank.

Omega Company pays its employees twice a month, on the 7th and the 21st. On June 21, Omega Company paid employee salaries of $4,000. This transaction would

be recorded by a $4,000 debit to Salaries and Wages Payable and a $4,000 credit to Salaries and Wages Expense. decrease the balance in Salaries and Wages Expense by $4,000. decrease net income for the month by $4,000. increase equity by $4,000.

One difference between GAAP and IFRS is that GAAP uses a different posting process than IFRS. IFRS uses more fair value measurement than GAAP. IFRS uses accruals ing concepts and GAAP uses primarily the cash basis of ing. the limitations of a trial balance are different between GAAP and IFRS.

Posting accumulates the effects of ledger entries and transfers them to the general journal. is done only for income statement activity; activity related to the statement of financial position does not require posting. is done only once per year. is done by posting all the debits and credits of one entry before moving on to the next entry.

The double-entry system requires that each transaction must be recorded in two sets of books. in a journal and in a ledger. first as a revenue and then as an expense. in at least two different s.

Robitaille Company received a cash advance of $500 from a customer. As a result of this event, assets increased by $500. equity increased by $500. liabilities decreased by $500. revenues increased by $500.

On August 13, 2017, Merrill Enterprises purchased equipment for $2,000 and supplies of $400 on . Which of the following journal entries is recorded correctly and in the standard format?

Equipment

2,000

Payable Supplies Equipment. Supplies

2,400 400 2,000 400

s Payable s Payable

2,400 2,400

Equipment

2,000

Supplies Equipment Supplies s Payable.

400 2,000 400 2,400

Which of the following journal entries is recorded correctly and in the standard format? Salaries and Wages Expense

1,000

Rent Expense

1,500

Cash

2,500

Salaries and Wages Expense

1,000

Rent Expense Cash Salaries and Wages Expense

1,500 2,500 1,000

Cash

2,500

Rent Expense

1,500

Cash

2,500 Salaries and Wages Expense

1,000

Rent Expense

1,500

A debit to an asset indicates a decrease in the asset. an increase in the asset. a credit was made to a liability . an error.

During 2017, its first year of operations, Yaspo’s Bakery had revenues of $200,000 and expenses of $110,000. The business paid dividends of $60,000. What is the amount of equity at December 31, 2017?

$60,000 debit $0 $90,000 credit $30,000 credit

Which of the following s is reported in the equity section of the statement of financial position? Dividends Share capital-ordinary Revenues All of these answer choices are correct

he usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the book of original entry, and transfer the information to the journal. journal, and transfer the information to the ledger s. ledger, and transfer the information to the journal. book of s, and transfer the information to the journal

Sternberg Company purchases equipment for $1,200 and supplies for $400 from Tran Co. for $1,600 cash. The entry for this transaction will include a debit to Equipment $1,200 and a debit to Supplies Expense $400 for Tran. credit to s Payable for Sternberg. debit to Equipment $1,200 and a debit to Supplies $400 for Sternberg. credit to Cash for Tran.

Which one of the following represents the expanded basic ing equation? Assets + Dividends + Expenses = Liabilities + Share Capital–Ordinary + Retained Earnings + Revenues. Assets = Revenues + Expenses – Liabilities. Assets = Liabilities + Share Capital–Ordinary + Retained Earnings + Dividends – Revenue – Expenses. Assets – Liabilities – Dividends = Share Capital–Ordinary + Retained Earnings + Revenues – Expenses.

When a company pays dividends

the dividend doesn't have to be cash, it could be another asset. the dividends will be decreased with a debit. the dividends will be increased with a credit. the retained earnings will be directly increased with a debit.

Posting is done only once per year. accumulates the effects of ledger entries and transfers them to the general journal. is done only for income statement activity; activity related to the statement of financial position does not require posting. is done by posting all the debits and credits of one entry before moving on to the next entry.

The double-entry system requires that each transaction must be recorded in a journal and in a ledger. first as a revenue and then as an expense. in at least two different s. in two sets of books.

A trial balance will not balance if a correct journal entry is posted twice. proves that transactions are recorded correctly. is the same under GAAP and IFRS. proves that all transactions have been recorded.

Which of the following statements is false concerning use of currency signs? Currency signs are not typically used in the trial balance. Currency signs do not appear in journals or ledgers. All of these answer choices are correct. Currency signs are generally only shown for the first item in a column and for the column total.

A journal provides the balances for each . information about a transaction in several different places. a chronological record of transactions. a list of all s used in the business.

The standard format of a journal would not include a date column. an title column. a T-. a reference column

Which of the following is the correct sequence of steps in the recording process? Analyzing, posting, journalizing Posting, journalizing, analyzing Journalizing, analyzing, posting Analyzing, journalizing, posting

The usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the ledger, and transfer the information to the journal. journal, and transfer the information to the ledger s. book of s, and transfer the information to the journal. book of original entry, and transfer the information to the journal.

The usual sequence of steps in the transaction recording process is: journal → analyze → ledger. analyze → journal → ledger. journal → ledger → analyze. ledger → journal → analyze.

Evidence that would not help with determining the effects of a transaction on the s would be a(n) check. bill. advertising brochure. cash sales tape.

Revenues are

impacted by debits and credits in the same way that expenses are impacted by debits and credits. a subdivision of equity, providing information about why equity increased. all of these answer choices are correct. reported on the statement of financial position as a current item.

The right side of an reflects all transactions for the ing period. is the correct side. is the credit side. shows all the balances of the s in the system.

The best interpretation of the word credit is the right side of an . decrease side of an . increase side of an . offset side of an .

One difference between GAAP and IFRS is that IFRS uses more fair value measurement than GAAP. GAAP uses a different posting process than IFRS. IFRS uses accruals ing concepts and GAAP uses primarily the cash basis of ing. the limitations of a trial balance are different between GAAP and IFRS.

For the basic ing equation to stay in balance, each transaction recorded must affect two or less s. affect two or more s. always affect exactly two s. affect the same number of asset and liability s.

Which one of the following is not a part of an ? Title Trial balance Credit side Debit sid

At December 1, 2017, Gibson Company’s s receivable balance was €7,200. During December, Gibson had credit revenues of €30,000 and collected s receivable of €24,000. At December 31, 2017, the s receivable balance is €37,200 debit. €13,200 credit. €7,200 debit. €13,200 debit.

The explanation column of the general ledger is used infrequently. shows titles. is completed without exception. is nonexistent.

A trial balance may balance even when each of the following occurs except when a journal entry is posted twice. incorrect s are used in journalizing. a transaction is not journalized. a transposition error is made.

Which of the following statements is true regarding simple and compound entries? Simple entries involve one , whereas compound entries involved 2 or more s. An example of a compound entry would be the purchase of a machine for $400 cash and a $2,000 note payable. Simple entries can be prepared by anyone whereas compound entries need to be prepared by a skilled ant. Simple entries are recorded on the income statement whereas compound entries are recorded on the statement of financial position.

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to equity. financial statements. ledger s. the company's bank

s maintained within the ledger that appear on the statement of financial position include all of the following except

Share Capital-Ordinary. Salaries and Wages Expense. Interest Payable. Supplies.

Posting is done only for income statement activity; activity related to the statement of financial position does not require posting. accumulates the effects of ledger entries and transfers them to the general journal. is done only once per year. is done by posting all the debits and credits of one entry before moving on to the next entry.

Taylor Industries purchased supplies for £1,000. They paid £500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset for ₤1,000, a credit to a liability for ₤500. Which of the following would be the correct way to complete the recording of the transaction? Credit the retained earnings for ₤500. Debit the retained earnings for ₤500. Credit an asset for ₤500. Credit another liability for ₤500.

Ayala Company showed the following balances at the end of its first year: Cash Prepaid insurance

$11,000 500

s receivable

2,500

s payable

2,000

Notes payable

6,000

Share capital-ordinary

4,000

Dividends

500

Revenues

15,000

Expenses

12,500

What did Ayala Company show as total credits on its trial balance?

$28,000

$27,500 $27,000 $26,500

The expanded ing equation under GAAP is as follows Assets + Liabilities = Common Stock + Retained Earnings - Dividends + Revenues - Expenses. Assets = Liabilities + Common Stock - Retained Earnings - Dividends + Revenues - Expenses. Assets = Liabilities + Common Stock + Retained Earnings - Dividends - Revenues - Expenses. Assets = Liabilities + Common Stock + Retained Earnings - Dividends + Revenues - Expenses.

Posting of journal entries should be done in number order. dollar amount order. alphabetical order. chronological order.

When only two s are required in one journal entry, the entry is referred to as a nominal entry. balanced entry. simple entry. posting.

Under U.S. GAAP share Capital-Ordinary is referred to as Retained Earnings. currency signs are generally used in the journal, ledger, trial balance, and financial statements. the rules of debits and credits, and the steps in the recording process are the same as under IFRS. the statement of financial position is often called the statement of changes in financial position.

Which of the following statements is true regarding debits and credits? The basic equation on the statement of financial position is Assets + Liabilities = Equity. On the income statement, debits are used to increase balances, whereas on the statement of financial position, credits are used to increase balances. On the income statement, revenues are increased by debits whereas on the statement of financial position retained earnings is increased by a credit. The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for liabilities.

An asset—expense relationship exists with revenue s. prepaid expense adjusting entries. liability s. accrued expense adjusting entries.

Hercules Company purchased a computer for $4,500 on December 1. It is estimated that annual depreciation on the computer will be $900. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: Debit Depreciation Expense, $900; Credit Accumulated Depreciation, $900. Debit Depreciation Expense, $75; Credit Accumulated Depreciation, $75. Debit Depreciation Expense, $3,600; Credit Accumulated Depreciation, $3,600. Debit Office Equipment, $4,500; Credit Accumulated Depreciation, $4,500.

________-Becki Jean Corporation issued a one-year, 6%, £500,000 note on April 30, 2017. Interest expense for the year ended December 31, 2017 was £22,500. £20,000. £17,500. £30,000.

When companies record transactions in the period in which the events occur, ______ is being applied. the time period assumption the matching of the income statement with the statement of financial position the expense recognition principle accrual-basis ing

Which statement is correct? The use of the cash basis of ing violates both the revenue recognition and expense recognition principles. The cash basis of ing is objective because no one can be certain of the amount of revenue until the cash is received. As long as management is ethical, there are no problems with using the cash basis of ing. As long as a company consistently uses the cash basis of ing, IFRS allow its use.

A candy factory's employees work overtime to finish an order that is sold and shipped on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in

either in February or March depending on when the pay period ends. February. the period when the workers receive their checks. March.

Y-B-2 Inc. pays its rent of €90,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true? Assets will be overstated by €15,000 and net income and equity will be understated by €15,000. Assets will be overstated by €7,500 and net income and equity will be overstated by €7,500. Expenses will be overstated by €7,500 and net income and equity will be understated by €7,500. Failure to make the adjustment does not affect the February financial statements.

CHS Company purchased a truck from JLS Corp. by issuing a 6-month, 8% note payable for $45,000 on November 1. On December 31, the accrued expense adjusting entry is: Interest 600 Expense................................ Interest Payable........................... 600 No entry is required. Interest 3,600 Expense................................ Interest Payable........................... 3,600 Interest 7,200 Expense................................ Interest Payable........................... 7,200

Which of the following is in accordance with IFRS? Neither accrual basis nor cash basis ing Cash basis ing Both accrual basis and cash basis ing Accrual basis ing

Which of the following reflect the balances of prepayment s prior to adjustment? Statement of financial position s are overstated and income statement s are understated. Statement of financial position s are overstated and income statement s are overstated. Statement of financial position s are understated and income statement s are understated. Statement of financial position s are understated and income statement s are overstated.

Sele, Inc. purchased a building on January 1, 2017 for ₤ 1,200,000. The useful life of the building is 10 years. The asset is reported on the December 31, 2017 statement of financial position at ₤ 1,080,000. What was the impact of the adjusting entry recorded by Sele, Inc.?

Decreased Equity ₤ 120,000. Increased Liabilities ₤ 120,000. Increased Assets ₤ 120,000. All of these answer choices are correct.

Iron Inn is a resort located in Canada. During December 2016 Wave Inn collects €200,000 cash related to a conference booked by the Spin Jammers. The conference is scheduled for February 12 and 13, 2017. Which of the following is true regarding how this transaction is reported on the December 31, 2016 statement of financial position?

Spin Jammers reports unearned revenue of €200,000. Iron Inn reports a prepaid asset of €200,000. Iron Inn reports unearned revenue of €200,000. All of these answer choices are correct.

Sherman Air Charter signed a four-month note payable in the amount of $12,000 on September 1. The note requires interest at an annual rate of 6%. The amount of interest to be accrued at the end of September is $180. $60. $720. $240.

Iron Inn is a resort located in Canada. During December 2017 Spin Jammers held its annual conference at the resort. The charges related to the conference total € 400,000, of which 25% has been paid by Spin Jammers. When Iron Inn makes the appropriate adjusting entry, which of the following is a part of the adjustment made to its December 31, 2017 statement of financial position? Debit Cash and credit revenue € 300,000. Credit revenues € 300,000. Credit Cash € 300,000. Debit Cash € 300,000.

If an adjusting entry is not made for an accrued revenue, revenues will be overstated. assets will be overstated. expenses will be understated. equity will be understated.

Adjusting entries are required when the company's profits are below the budget. when revenues are recorded in the period in which they are earned. when expenses are recorded in the period in which they are incurred. because some costs expire with the age of time and have not yet been journalized.

Depreciation expense for a period is computed by taking the market value of the asset ÷ useful life. original cost of an asset – accumulated depreciation. depreciable cost ÷ depreciation rate. cost of the asset ÷ useful life.

Monthly and quarterly time periods are called fiscal periods. interim periods. quarterly periods. calendar periods.

ing information should be verifiable in order to enhance comparability. faithful representation. relevance. consistency.

Unearned revenue is classified as an asset . a contra-revenue . a revenue . a liability .

The preparation of adjusting entries is straight forward because the s that need adjustment will be out of balance. often an involved process requiring the skills of a professional. optional when financial statements are prepared. only required for s that do not have a normal balance.

An item is considered material if the cost of reporting the item is greater than its benefits. it is of a tangible good. its size is likely to influence the decision of an investor or creditor. it doesn't cost a lot of money.

Bee-In-The-Bonnet Company purchased office supplies costing $8,000 and debited Supplies for the full amount. At the end of the ing period, a physical count of supplies revealed $2,200 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

Debit Supplies Expense, $5,800; Credit Supplies, $5,800. Debit Supplies, $5,800; Credit Supplies Expense, $5,800. Debit Supplies, $2,200; Credit Supplies Expense, $2,200. Debit Supplies Expense, $2,200; Credit Supplies, $2,200.

Hardwood Supplies Inc. purchased a 12-month insurance policy on March 1, 2017 for ₤ 3,000. At March 31, 2017, the adjusting journal entry to record expiration of this asset will include a debit to Prepaid Insurance and a credit to Insurance Expense for ₤ 300. debit to Insurance Expense and a credit to Prepaid Insurance for ₤ 250. debit to Insurance Expense and a credit to Cash for ₤ 250. debit to Prepaid Insurance and a credit to Cash for ₤ 3,000.

The time period assumption states that a transaction can only affect one period of time. the economic life of a business can be divided into artificial time periods. estimates should not be made if a transaction affects more than one time period. adjustments to the enterprise's s can only be made in the time period when the business terminates its operations.

If prepaid expenses are initially recorded in expense s and have not all been used at the end of the ing period, then failure to make an adjusting entry will cause

expenses to be understated. contra-expenses to be overstated. assets to be understated. assets to be overstated.

A company must make adjusting entries to for accruals or deferrals. all of these answer choices are correct. to ensure that the revenue recognition and expense recognition principles are followed. each time it prepares an income statement and a statement of financial position.

A company using the same ing principles from year to year is an application of consistency. full disclosure. materiality. timelines.

Alternative adjusting entries do not apply to prepaid expenses. accrued revenues and accrued expenses. unearned revenues. prepaid expenses and unearned revenues.

If unearned revenues are initially recorded in revenue s and have not all been earned at the end of the ing period, then failure to make an adjusting entry will cause revenues to be overstated. s receivable to be overstated. liabilities to be overstated. revenues to be understated.

Wing Company had the following transactions during 2016: • • • •

Sales of ¥72,000 on Collected ¥32,000 for services to be performed in 2017 Paid ¥10,000 cash in salaries Purchased airline tickets for ¥4,000 in December for a trip to take place in 2017

What is Wing's 2016 net income using cash basis ing?

¥18,000. ¥22,000. ¥90,000. ¥94,000.

If a company fails to make an adjusting entry to record supplies expense, then expense will be understated. assets will be understated. net income will be understated. equity will be understated.

Iron Inn is a resort located in Canada. Wave Inn collects cash when guests make a reservation. During December 2016, Iron Inn collected €150,000 of cash and recorded the receipt by recognizing unearned revenue. By the end of the month Iron Inn had earned one third of this amount, the other two thirds will be earned during January 2017. The adjusting entry required at December 31, 2016 would impact the statement of financial position by Increased Assets €150,000. Decreased Liabilities €50,000. Increased Equity €100,000. Decreased Equity €50,000.

Sele, Inc. purchased supplies costing ₤7,000 on January 1, 2017 and recorded the transaction by increasing assets. At the end of the year ₤2,600 of the supplies are still on hand. If Sele, Inc. does not make the appropriate adjusting entry, what is the impact on its statement of financial position at December 31, 2017? Assets overstated by ₤ 2,600. Equity understated by ₤ 4,400. Assets overstated by ₤ 4,400. Equity overstated by ₤ 2,600.

Which of the following statements is not true? Faithful representation is the quality of information that gives assurance that it is free from error. Relevant ing information must be capable of making a difference in the decision. The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decision. Comparability means using the same ing principles from year to year within a company.

Which one of the following is not an enhancing quality of useful information? Monetary Unit Understand ability Timelines Comparability

Adjusting entries include both accruals and deferrals. are necessary to enable the financial statements to conform to international Financial Reporting Standards (IFRS). ensure that the revenue recognition and expense recognition principles are followed. all of these answer choices are correct.

If a business has several types of Non-current assets such as equipment, buildings, and trucks, all the long-term asset s will be recorded in one general ledger . there should be only one accumulated depreciation . there should be a separate accumulated depreciation for each type of asset. there won't be a need for an accumulated depreciation .

A flower shop makes a large sale and provides flowers to a customer for $1,000 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The flower shop follows IFRS and applies the revenue recognition principle. When is the $1,000 considered to be earned? December 5. November 30. December 1. December 10.

The fiscal year of a business is usually determined by the business. shareholders. the IASB. a government agency.

Action Real Estate received a check for $24,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full

$24,000. Financial statements will be prepared on July 31. Action Real Estate should make the following adjusting entry on July 31: Debit Unearned Rent Revenue, $24,000; Credit Rent Revenue, $24,000. Debit Unearned Rent Revenue, $4,000; Credit Rent Revenue, $4,000. Debit Rent Revenue, $4,000; Credit Unearned Rent Revenue, $4,000. Debit Cash, $24,000; Credit Rent Revenue, $24,000.

Which of the following would not result in unearned revenue? Sale of two-year magazine subscriptions Rent collected in advance from tenants Services performed on Sale of season tickets to football games

Adjusting entries are required yearly. monthly. quarterly. every time financial statements are prepared.

Bread Basket provides baking supplies to restaurants and grocery stores. During December 2017, Bread Basket’s employees worked 2,400 hours at an average rate of €15 per hour. At December 31, 2017, Bread Basket has paid €21,000 of salary expense. If Bread Basket fails to make the appropriate adjusting entry, which of the following is true regarding its December 31, 2017 statement of financial position? Equity is understated by € 15,000. Liabilities are overstated by € 21,000. Equity is overstated by € 21,000. Liabilities are understated by € 15,000

Expenses sometimes make their contribution to revenue in a different period than when they are paid. When wages are incurred in one period and paid in the next period, this often leads to which appearing on the statement of financial position at the end of the time period? Salaries and Wages Expense. Due to Employer. Due from Employees. Salaries and Wages Payable.

Joyce’s Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of $50,000 with annual interest of

6%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

Interest Expense........................... Interest Payable.......................

7,500

Interest Expense........................... Interest Payable.......................

500

7,500

500

Interest 500 Expense........................... Cash....................................... Interest Expense........................... Note Payable...........................

500

500 500

Under International Financial Reporting Standards (IFRS) the cash-basis method of ing is accepted. a fiscal year is an ing time period encoming less than 12 months. events are recorded in the period in which the event occurs. interim period financial statements are either a calendar year or a fiscal year.

What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance balance before adjustment, € 41,000, and unexpired amounts per analysis of policies of € 8,000? Debit Insurance Expense, € 8,000; Credit Prepaid Insurance, € 8,000. Debit Prepaid Insurance, € 33,000; Credit Insurance Expense, € 33,000. Debit Insurance Expense, € 33,000; Credit Prepaid Insurance, € 33,000. Debit Insurance Expense, € 41,000; Credit Prepaid Insurance, € 41,000.

41000 – 8000 On July 1, Runner’s Sports Store paid $12,000 to Acme Realty for 4 months rent beginning July 1. Prepaid Rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by Runner’s Sports Store is: Debit Rent Expense, $3,000; Credit Prepaid Rent, $3,000. Debit Rent Expense, $12,000; Credit Prepaid Rent, $12,000. Debit Rent Expense, $12,000; Credit Prepaid Rent, $3,000. Debit Prepaid Rent, $3,000; Credit Rent Expense, $3,000.

Under accrual-basis ing

events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. the ledger s must be adjusted to reflect a cash basis of ing before financial statements are prepared under IFRS. cash must be received before revenue is recognized. net income is calculated by matching cash outflows against cash inflows.

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 145,000 $(5,000)

The entry to close the expense s includes

debit to Income Summary for $145,000. debit to Income Summary for $5,000. debit to Salaries and Wages Expense for $90,000. credit to Income Summary for $5,000.

The following data (in thousands) is available for Chang Company. Debit Mortgage payable Prepaid expenses Equipment Patents Short-term investments

¥ 2,829 ¥ 2,640 34,500 792 11,070

Notes payable in 2017 Cash

Credit

1,443 8,004

Accumulated depreciation

16,965

s payable

4,332

Notes payable after 2017

7,104

Share capital-ordinary

30,000

Retained earnings s receivable

9,189 5,088

Inventories

3,768

Total

¥ 65,862

¥ 65,862

The subtotal of the last asset classification on the 2017 Statement of Financial Position is

¥34,500. ¥17,535. ¥30,570. ¥27,930.

On March 8, Fernetti Company bought office supplies on from the Flint Company for $550. Fernetti Company incorrectly debited Equipment for $500 and credited s Payable for $500. The entries have been posted to the ledger. the correcting entry should be:

Supplies s Payable Equipment

550

Supplies Equipment

550

Supplies Equipment s Payable

550

Supplies s Payable

550

500 50 550 500 50 550

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending December 31, 2017: s payable s receivable Accumulated depreciation–equipment

¥ 72,000 44,000 112,000

Advertising expense

84,000

Cash

60,000

Share capital-ordinary Dividends Depreciation expense Equipment Insurance expense Note payable, due 6/30/18

168,000 56,000 48,000 840,000 12,000 280,000

Prepaid insurance (12-month policy)

24,000

Rent expense

68,000

Retained earnings (1/1/17)

240,000

Salaries and wages expense

128,000

Service revenue

532,000

Supplies

16,000

Supplies expense

24,000

The sub-classifications for assets on the company's classified statement of financial position would include all of the following except: Current Assets. Long-term Assets. Property, Plant, and Equipment. Intangible Assets.

Which listed below would be double ruled in the ledger as part of the closing process?

Accumulated Depreciation Cash Retained Earnings Dividends

The income statement and statement of financial position columns of Reed Company's worksheet reflect the following totals: Income Statement

Totals

Dr. $58,000

Cr. $45,000

Statement of financial position Dr. Cr. $34,000 $47,000

To enter the net income (or loss) for the period into the above worksheet requires an entry to the

income statement debit column and the income statement credit column. statement of financial position debit column and the statement of financial position credit column. income statement debit column and the statement of financial position credit column. income statement credit column and the statement of financial position debit column

When using a worksheet, adjusting entries are journalized

before the adjusted trial balance is extended to the proper financial statement columns. after the worksheet is completed and after financial statements are prepared. before the adjustments are entered on to the worksheet. after the worksheet is completed and before financial statements are prepared.

Which of the following is a true statement about closing the books of a corporation? Revenues and expenses are closed to the Income Summary . Expenses are closed to the Expense Summary . Only revenues are closed to the Income Summary . Revenues, expenses, and the dividends are closed to the Income Summary .

In order to close the Dividends , the

retained earnings should be credited. retained earnings should be debited. income summary should be debited. income summary should be credited.

An intangible asset

is worthless because it has no physical substance. is converted into a tangible asset during the operating cycle. cannot be classified on the statement of financial position because it lacks physical substance. does not have physical substance, yet often is very valuable.

The information for preparing a trial balance on a worksheet is obtained from

financial statements. general journal entries. business documents. general ledger s.

The income statement for the year 2017 of Poole Co. contains the following information:

Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 145,000 $(5,000)

The entry to close the expense s includes a

debit to Income Summary for $5,000. credit to Income Summary for $5,000. debit to Income Summary for $145,000. debit to Salaries and Wages Expense for $90,000.

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

Adjusted trial balance columns Income statement columns Adjustments columns Trial balance columns

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 145,000 $(5,000)

The entry to close the revenue includes a credit to Income Summary for $5,000. debit to Revenues for $150,000. debit to Income Summary for $5,000.

credit to Revenues for $150,000

On September 23, Riley Company received a $350 check from Jack Colaw for services to be performed in the future. The bookkeeper for Riley Company incorrectly debited Cash for $350 and credited s Receivable for $350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should debit Cash $350 and credit Unearned Service Revenue $350. debit s Receivable $350 and credit Cash $350. debit s Receivable $350 and credit Unearned Service Revenue $350. debit s Receivable $350 and credit Service Revenue $350.

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has suffered a net loss for the period. to make an adjusting entry. earned net income for the period. an error because debits do not equal credits.

The following information (in thousands) is for Zháng Office Supplies: Zháng Office Supplies Statement of Financial Position December 31, 2017 Trademark

¥280,000

Land

¥360,000

Share Capital

¥480,000

Retained Earnings 1,000,000

Buildings

¥400,000

¥1,480,000

Less:Accum. Depreciation Land Held for Investment

80,000

320,000

680,000 s Payable 300,000

240,000 Salaries Wages Payable

Prepaid Insurance

120,000

Inventory

280,000

s Receivable

200,000

Cash

260,000

40,000 Mortgage Payable

Total Assets

¥2,120,000

360,000

640,000 Total Equity and Liabilities

The total amount of liabilities to be classified as current liabilities is

¥ 2,120,000

¥240,000. ¥640,000. ¥280,000. ¥600,000.

Equipment is classified in the statement of financial position as a current asset. a long-term investment. property, plant, and equipment. an intangible asset.

Closing entries summarize the activity in every . reduce the number of permanent s. are prepared before the financial statements. cause the revenue and expense s to have zero balances.

Which of the following steps in the ing cycle would not generally be performed daily? Analyze business transactions Prepare adjusting entries Journalize transactions Post to ledger s

Which will appear last under the current assets classification on the Statement of Financial Position? Prepaid Expenses. cash. s Receivable. Short-term investments.

What amount will be reflected for Retained Earnings in the Statement of Financial Position columns of the worksheet?

Cash

Debit €5,712

Credit

s Receivable Supplies s Payable Unearned Service Revenue Share Capital-ordinary Retained Earnings Dividends Service Revenue Salaries and Wages Expense Miscellaneous Expense Supplies Expense Salaries and Wages Payable Total

3,904 480 €2,792 160 5,000 1,760 300 4,064 1,344 256 2,228 €14,224

448 €14,224

€2,060 €1,760 €1,996 €1,696

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 145,000 $(5,000)

After the revenue and expense s have been closed, the balance in Income Summary will be a credit balance of $5,000. a credit balance of $150,000. $0. a debit balance of $5,000.

The income statement for the month of June, 2017 of Taylor Enterprises contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense

£16,000 £4,000 3,000

Supplies Expense Advertising Expense Insurance Expense Total expenses Net income

600 400 200 8,200 £7,800

The entry to close the expense s includes a credit to Rent Expense for ₤3,000. debit to Income Summary for ₤7,800. credit to Income Summary for ₤8,200. debit to Salaries and Wages Expense for ₤2,000.

A worksheet is a multiple column form that facilitates the measurement process. preparation of financial statements. analysis process. identification of events.

The information for preparing a trial balance on a worksheet is obtained from business documents. general ledger s. financial statements. general journal entries

The temporary balances ultimately wind up in what ? Share Capital-ordinary. Comprehensive Income. Income Summary. Retained Earnings.

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense

$150,000 $90,000 32,000 12,000 12,000 5,000

Insurance Expense Total expenses Net income (loss)

4,000 155,000 $(5,000)

The entry to close Income Summary to Retained Earnings includes a debit to Revenue for $150,000. a credit to Income Summary for $5,000. a credit to Retained Earnings for $5,000. credits to Expenses totalling $145,000.

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 155,000 $(5,000)

At January 1, 2017, Poole reported Retained Earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2014, the company will report Retained Earnings of $80,000. $35,000. $75,000. $85,000.

Which of the following permanent is changed during the closing process? Share Capital-ordinary. Retained Earnings. Unearned Service Revenue. None of these answer choices are correct.

Which one of the following statements concerning the ing cycle is incorrect? The steps in the ing cycle are performed in sequence. The ing cycle includes only one optional step. The steps in the ing cycle are repeated in each ing period.

The ing cycle includes journalizing transactions and posting to ledger s.

The adjustments entered in the adjustments columns of a worksheet are not journalized. posted to the ledger but not journalized. not journalized until after the financial statements are prepared. journalized before the worksheet is completed.

A worksheet can be thought of as a(n) part of the general ledger. part of the journal. permanent ing record. optional device used by ants.

The following data (in thousands) is available for Chang Company. Debit Mortgage payable Prepaid expenses Equipment Patents Short-term investments

¥ 2,829 ¥ 2,640 34,500 792 11,070

Notes payable in 2017 Cash

Credit

1,443 8,004

Accumulated depreciation

16,965

s payable

4,332

Notes payable after 2017

7,104

Share capital-ordinary

30,000

Retained earnings

9,189

s receivable

5,088

Inventories

3,768

Total

¥ 65,862

¥ 65,862

The subtotal of the last asset classification on the 2017 Statement of Financial Position is: ¥34,500. ¥17,535.

¥27,930. ¥30,570.

The following information (in thousands) is for Zháng Office Supplies: Zháng Office Supplies Statement of Financial Position December 31, 2017 Trademark

¥280,000

Land

¥360,000

Share Capital

¥480,000

Retained Earnings 1,000,000

Buildings

¥400,000

¥1,480,000

Less:Accum. Depreciation

80,000

320,000

Land Held for Investment

680,000 s Payable 300,000

240,000 Salaries Wages Payable

Prepaid Insurance

120,000

Inventory

280,000

s Receivable

200,000

Cash

260,000

40,000 Mortgage Payable

Total Assets

¥2,120,000

360,000

640,000 Total Equity and Liabilities

¥ 2,120,000

The total amount of assets to be classified as investments is ¥600,000. ¥0. ¥720,000. ¥300,000.

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending December 31, 2017: s payable s receivable Accumulated depreciation–equipment

¥ 72,000 44,000 112,000

Advertising expense

84,000

Cash

60,000

Share capital-ordinary

168,000

Dividends

56,000

Depreciation expense

48,000

Equipment

840,000

Insurance expense

12,000

Note payable, due 6/30/18

280,000

Prepaid insurance (12-month policy)

24,000

Rent expense

68,000

Retained earnings (1/1/17)

240,000

Salaries and wages expense

128,000

Service revenue

532,000

Supplies

16,000

Supplies expense

24,000

The sub-classifications for assets on the company's classified statement of financial position would include all of the following except: Long-term Assets. Current Assets. Intangible Assets. Property, Plant, and Equipment.

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 155,000 $(5,000)

The entry to close Income Summary to Retained Earnings includes credits to Expenses totalling $145,000. a credit to Income Summary for $5,000. a debit to Revenue for $150,000. a credit to Retained Earnings for $5,000.

When constructing a worksheet, s are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional s be shown on the worksheet? They should be inserted in chart of order into the trial balance already given. They should be inserted on the lines immediately below the trial balance totals. They should be inserted in alphabetical order into the trial balance s already given.

They should not be inserted on the trial balance until the next ing period.

On May 25, Carlin Company received a $550 check from Andy Jeter for services to be performed in the future. The bookkeeper for Carlin Company incorrectly debited Cash for $550 and credited s Receivable for $550. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should: debit s Receivable $550 and credit Unearned Service Revenue $550. debit s Receivable $550 and credit Service Revenue $550. debit Cash $550 and credit Unearned Service Revenue $550. debit s Receivable $550 and credit Cash $550.

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending December 31, 2017: s payable s receivable Accumulated depreciation–equipment Advertising expense Cash Share capital-ordinary

¥ 72,000 44,000 112,000 84,000 60,000 168,000

Dividends

56,000

Depreciation expense

48,000

Equipment Insurance expense Note payable, due 6/30/18 Prepaid insurance (12-month policy) Rent expense

840,000 12,000 280,000 24,000 68,000

Retained earnings (1/1/17)

240,000

Salaries and wages expense

128,000

Service revenue

532,000

Supplies

16,000

Supplies expense

24,000

What is the book value of the equipment at December 31, 2017?

¥680,000 ¥840,000 ¥728,000 ¥952,000

The use of reversing entries

changes the amounts reported in the financial statements. simplifies the recording of subsequent transactions. is required for all adjusting entries. is a required step in the ing cycle.

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet? Adjustments columns Adjusted trial balance columns Trial balance columns Income statement columns

The following information (in thousands) is for Zháng Office Supplies: Zháng Office Supplies Statement of Financial Position December 31, 2017 Trademark

¥280,000

Land

¥360,000

Share Capital

¥480,000

Retained Earnings 1,000,000

Buildings

¥400,000

¥1,480,000

Less:Accum. Depreciation Land Held for Investment

80,000

320,000

680,000 s Payable 300,000

240,000 Salaries Wages Payable

Prepaid Insurance

120,000

Inventory

280,000

s Receivable

200,000

Cash

260,000

40,000 Mortgage Payable

Total Assets

¥2,120,000

360,000

640,000 Total Equity and Liabilities

The total amount of assets to be classified as property, plant, and equipment is

¥680,000. ¥980,000.

¥ 2,120,000

¥760,000. ¥1,280,000.

The steps in the preparation of a worksheet do not include

analyzing documentary evidence. preparing a trial balance on the worksheet. entering the adjustments in the adjustment columns. entering adjusted balances in the adjusted trial balance columns.

Which classification of assets will appear last in the Statement of Financial Position? Current Assets. Intangible Assets. Long-term investments. Property, Plant and Equipment.

The following data (in thousands) is available for Chang Company. Debit Mortgage payable Prepaid expenses Equipment Patents Short-term investments

¥ 2,829 ¥ 2,640 34,500 792 11,070

Notes payable in 2017 Cash

Credit

1,443 8,004

Accumulated depreciation

16,965

s payable

4,332

Notes payable after 2017

7,104

Share capital-ordinary

30,000

Retained earnings

9,189

s receivable

5,088

Inventories

3,768

Total

¥ 65,862

¥ 65,862

Total assets on the Statement of Financial Position for 2017 are:

¥46,257.

¥82,827. ¥65,862. ¥48,897.

The income statement and statement of financial position columns of Reed Company's worksheet reflect the following totals: Income Statement

Totals

Dr. $58,000

Cr. $45,000

Statement of financial position Dr. Cr. $34,000 $47,000

The net income (or loss) for the period is

$13,000 income. $13,000 loss. not determinable. $45,000 income.

The following information (in thousands) is for Zháng Office Supplies: Zháng Office Supplies Statement of Financial Position December 31, 2017 Trademark

¥280,000

Land

¥360,000

Share Capital

¥480,000

Retained Earnings 1,000,000

Buildings

¥400,000

¥1,480,000

Less:Accum. Depreciation Land Held for Investment

80,000

320,000

680,000 s Payable 300,000

240,000 Salaries Wages Payable

Prepaid Insurance

120,000

Inventory

280,000

s Receivable

200,000

Cash

260,000

40,000 Mortgage Payable

Total Assets

¥2,120,000

360,000

640,000 Total Equity and Liabilities

¥ 2,120,000

The total amount of assets to be classified as investments is

¥720,000. ¥0. ¥600,000. ¥300,000.

Computing net income on the worksheet occurs in step three. five. two. four.

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 145,000 $(5,000)

The entry to close the expense s includes a debit to Salaries and Wages Expense for $90,000. debit to Income Summary for $5,000. credit to Income Summary for $5,000. debit to Income Summary for $145,000.

The following information (in thousands) is for Zháng Office Supplies: Zháng Office Supplies Statement of Financial Position December 31, 2017 Trademark

¥280,000

Share Capital

¥480,000

Land

¥360,000

Retained Earnings 1,000,000

Buildings

¥400,000

¥1,480,000

Less:Accum. Depreciation

80,000

320,000

Land Held for Investment

680,000 s Payable 300,000

240,000 Salaries Wages Payable

Prepaid Insurance

120,000

40,000 Mortgage Payable

Inventory

280,000

s Receivable

200,000

Cash

260,000

Total Assets

¥2,120,000

360,000

640,000 Total Equity and Liabilities

¥ 2,120,000

The total amount of assets to be classified as investments is ¥720,000. ¥0. ¥600,000. ¥300,000.

Farr Company paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $75,000. The ant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $45,000 had been accrued at year end on December 31. The correcting entry is

Cash Salaries and Wages Expense

45,000

Salaries and Wages Payable Cash

45,000

Cash Salaries and Wages Expense

30,000

Salaries and Wages Payable Salaries and Wages Expense

45,000

45,000 30,000 45,000 45,000

Which of the following liabilities are not related to the operating cycle?

Salaries and wages payable s payable Utilities payable Bonds payable

The following information (in thousands) is for Zháng Office Supplies: Zháng Office Supplies Statement of Financial Position December 31, 2017 Trademark

¥280,000

Land

¥360,000

Share Capital

¥480,000

Retained Earnings 1,000,000

Buildings

¥400,000

¥1,480,000

Less:Accum. Depreciation

80,000

320,000

680,000

Land Held for Investment

s Payable 300,000

240,000 Salaries Wages Payable

Prepaid Insurance

120,000

40,000 Mortgage Payable

Inventory

280,000

s Receivable

200,000

Cash

260,000

Total Assets

¥2,120,000

360,000

640,000 Total Equity and Liabilities

The total amount of assets to be classified as current assets is ¥1,160,000. ¥580,000. ¥860,000. ¥720,000.

The following data (in thousands) is available for Chang Company. Debit Mortgage payable Prepaid expenses Equipment Patents Short-term investments

¥ 2,829 ¥ 2,640 34,500 792 11,070

Notes payable in 2017 Cash Accumulated depreciation

Credit

1,443 8,004 16,965

¥ 2,120,000

s payable

4,332

Notes payable after 2017

7,104

Share capital-ordinary

30,000

Retained earnings

9,189

s receivable

5,088

Inventories

3,768

Total

¥ 65,862

¥ 65,862

The subtotal of the first asset classification on the 2017 Statement of Financial Position is: ¥11,070. ¥30,570. ¥27,930. ¥792.

Which listed below would be double ruled in the ledger as part of the closing process? Accumulated Depreciation Cash Retained Earnings Dividends

The income statement for the year 2017 of Poole Co. contains the following information: Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Utilities Expense Insurance Expense Total expenses Net income (loss)

$150,000 $90,000 32,000 12,000 12,000 5,000 4,000 145,000 $(5,000)

After all closing entries have been posted, the Income Summary will have a balance of $75,000 credit. $5,000 debit. $0. $5,000 credit.

Ball Company sells merchandise on for ₤5,000 to Edds Company with credit of 2/10, n/30. Edds Company returns ₤1,000 of merchandise that was damaged, along with a check to settle the within the discount period. What is the amount of the check? ₤4,000 ₤4,920 ₤3,920 ₤4,900

Reese Company purchased merchandise with an invoice price of $3,000 and credit of 1/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit ? 18% 36% 10% 12%

Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. During December 10, 2017, Touch Tronix, Inc. sold €1,700,000 of goods to Advanced Communications, Inc. on for €2,200,000. Advanced Communications, Inc. was dissatisfied with 25% of the merchandise it receives due to inferior quality. On December 21, 2017, Advanced Communications, Inc. returns the goods to Touch Tronix, Inc. for credit. Which of the following is true regarding the statement of financial position and the income statement for Touch Tronix, Inc. at December 31, 2017? Assets will increase by €550,000 and income will decrease by €550,000. Assets will decrease by €425,000 and income will decrease by €425,000. Assets will decrease by €125,000 and income will decrease by €125,000. Assets will increase by €425,000 and income will decrease by €425,000.

Cole Company has sales revenue of ₤24,000, cost of goods sold of ₤16,000 and operating expenses of ₤6,000 for the year ended December 31. Cole's gross profit is ₤0. ₤2,000. ₤8,000. ₤18,000.

A company shows the following balances: Sales Revenue Sales Returns and Allowances Sales Discounts Cost of Goods Sold

¥1,500,000 270,000 30,000 900,000

What is the gross profit rate? 25% 60% 40% 75%

Rasner Co. returned defective goods costing $9,000 to Markum Company on April 19, for credit. The goods were purchased April 10, on credit, 3/10, n/30. The entry by Rasner Co. on April 19, in receiving full credit is:

s Payable Inventory

9,000 270

Cash s Payable

9,270 9,000

Inventory s Payable

9,000 9,000

Purchase Discounts

270

Cash s Payable

8,730 9,000

Inventory Cash

270 8,730

A sales invoice is a source document that provides evidence of incurred operating expenses. provides for credit sales. provides for goods purchased for resale. serves only as a customer receipt.

In preparing closing entries for a merchandising company, the Income Summary will be credited for the balance of

inventory. sales discounts. freight-out.

sales revenue

Cartier Company purchased inventory from Pissaro Company. The shipping costs were $400 and the of the shipment were FOB shipping point. Cartier would have the following entry regarding the shipping charges:

There is no entry on Cartier's books for this transaction. Freight Expense

400

Cash

400

Inventory

400

Cash

400

Freight-Out

400

Cash

400

The respective normal balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are credit, debit, debit. credit, debit, credit. credit, credit, credit. debit, credit, debit.

A buyer would record a payment within the discount period under a perpetual inventory system by crediting Inventory. Purchase Discounts. s Payable. Sales Discounts

Moses Company sells merchandise on for $8,000 to Lane Company with credit of 2/10, n/30. Lane Company returns $1,200 of merchandise that was damaged, along with a check to settle the within the discount period. What entry does Moses Company make upon receipt of the check? Cash

6,664

Sales Returns and Allowances 1,336 s Receivable Cash

8,000 7,840

Sales Discounts

160

Sales Returns and Allowances

1,200

s Receivable

6,800

Cash

6,800

s Receivable Cash

6,800 6,664

Sales Returns and Allowances 1,200 Sales Discounts

136

s Receivable

8,000

Company A sells ¥9,000 of merchandise on to Company B with credit of 2/10, n/30. If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check? ¥8,100 ¥8,820 ¥7,200 ¥6,300

During 2017, Yoder Enterprises generated revenues of $180,000. The company’s expenses were as follows: cost of goods sold of $90,000, operating expenses of $36,000 and a loss on the sale of equipment of $6,000. Yoder’s income from operations is $54,000. $90,000. $36,000. $180,000

Sales revenues are usually considered earned when goods have been transferred from the seller to the buyer. an order is received. adjusting entries are made. cash is received from credit sales.

If a company is given credit of 2/10, n/30, it should pay within the discount period and recognize a savings. hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time.

recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price. pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill.

During 2017, Yoder Enterprises generated revenues of $180,000. The company’s expenses were as follows: cost of goods sold of $90,000, operating expenses of $36,000 and a loss on the sale of equipment of $6,000. Yoder’s gross profit is

$180,000. $90,000. $54,000. $48,000.

Which of the following statements is true regarding International Financial Reporting Standards (IFRS) and U.S. GAAP? U.S. GAAP allows operating expenses to be reported by either function or nature, IFRS requires reporting by function. IFRS requires 2 years of income statements, U.S. GAAP requires 3 years of income statements. IFRS requires a single-step income statement, but U.S. GAAP allows either the single-step or the multiple-step income statement. IFRS allows both the perpetual and periodic systems, but U.S GAAP permits only the perpetual system.

The journal entry to record a return of merchandise purchased on under a perpetual inventory system would credit s Payable. Inventory. Purchase Returns and Allowances. Sales.

The Freight-in has a normal credit balance. increases the cost of merchandise purchased. is contra to the Purchases . is a permanent .

During August, 2017, Joe’s Supply Store generated revenues of $150,000. The company’s expenses were as follows: cost of goods sold of $60,000 and operating expenses of $10,000. The company also had rent revenue of $2,500 and a gain on the sale of a delivery truck of $5,000. Joe’s net income for August, 2017 is $87,500. $80,000. $82,500. $90,000.

Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. On December 10, 2017, Touch Tronix, Inc. sold €1,700,000 of goods to Advanced Communications, Inc. on for €2,200,000. of the sale were 2/10, net 30. On December 18, 2017, Advanced Communications, Inc. paid the in full. Advanced Communications, Inc. uses a perpetual inventory system. Which of the following is true regarding the impact on the statement of financial position for Advanced Communications, Inc. when the payment is made on December 18, 2017? Cash decreased by €1,666,000. s payable decreases by €1,700,000. Inventory decreased by €44,000. Inventory decreased by €34,000.

Which of the following statements is true regarding International Financial Reporting Standards (IFRS) and U.S. GAAP? IFRS allows both the perpetual and periodic systems, but U.S GAAP permits only the perpetual system. IFRS requires a single-step income statement, but U.S. GAAP allows either the single-step or the multiple-step income statement. U.S. GAAP allows operating expenses to be reported by either function or nature, IFRS requires reporting by function. IFRS requires 2 years of income statements, U.S. GAAP requires 3 years of income statements.

If a company is given credit of 2/10, n/30, it should recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price. pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill. hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time.

pay within the discount period and recognize a savings.

Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. During December 2017, Touch Tronix, Inc. sold €1,700,000 of goods to Advanced Communications, Inc. on for €2,200,000. Advanced Communications, Inc. was dissatisfied with 25% of the merchandise it received due to inferior quality. On December 21, 2017, Advanced Communications, Inc. returns the goods to Touch Tronix, Inc. for credit. Which of the following is true regarding the statement of financial position for Advanced Communications, Inc. at December 31, 2017? Assets will decrease by €425,000 and liabilities will decrease by €425,000. Assets will decrease by €550,000 and liabilities will decrease by €550,000. Assets will increase by €550,000 and liabilities will increase by €550,000. Assets will increase by €425,000 and liabilities will increase by €425,000.

Sampson Company's ing records show the following for the year ending on December 31, 2017: Purchase Discounts Freight-in Purchases Beginning Inventory Ending Inventory Purchase Returns

₤ 28,000 39,000 1,000,050 117,500 144,000 32,000

Using the periodic system, the cost of goods sold is

₤1,005,550. ₤994,550. ₤952,550. ₤1,047,550.

Maxwell Company's financial information is presented below. Sales Revenue Sales Returns and Allowances Net Sales The missing amounts above are: Sales Revenue Gross Profit

€730,000

€380,000

€ ???? 50,000 780,000

Cost of Goods Sold Gross Profit

€450,000 ????

€830,000

€380,000

€830,000

€330,000

€730,000

€330,000

Powers Company has the following balances: Purchases Sales Returns and Allowances Purchase Discounts Freight-in Delivery Expense

$99,000 12,800 8,000 6,000 8,000

The cost of goods purchased for the period is

$107,000. $97,000. $105,000. $92,200.

Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods are recorded in Freight Expense. Freight-Out. Inventory. Freight-In.

If a company has net sales of $800,000 and cost of goods sold of $520,000, the gross profit rate is 65%. 35%. 46%. 54%.

Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. On December 10, 2017, Touch Tronix, Inc. sold €1,700,000 of goods to Advanced Communications, Inc. on for €2,200,000. of the sale were 2/10, net 30. On December 18, 2017, Advanced Communications, Inc. paid the in full. Advanced Communications, Inc. uses a perpetual inventory system. Which of the following is true regarding the impact on the statement of financial position for Advanced Communications, Inc. when the payment is made on December 18, 2017? s payable decreases by €1,700,000.

Inventory decreased by €44,000. Cash decreased by €1,666,000. Inventory decreased by €34,000.

Which of the following s has a normal credit balance?

Freight-out Sales Returns and Allowances Sales Discounts Sales

Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. On December 10, 2017, Touch Tronix, Inc. sold €1,700,000 of goods to Advanced Communications, Inc. on for €2,200,000. of the sale were 2/10, net 30. On December 18, 2017, Advanced Communications, Inc. paid the in full. Advanced Communications, Inc. uses a perpetual inventory system. Which of the following is true regarding the impact on the statement of financial position for Advanced Communications, Inc. when the payment is made on December 18, 2017? Assets decreased by €2,200,000. Assets increased by €44,400. Liabilities decreased by €1,700,000. Liabilities decreased by €2,156,000.

The respective normal balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are credit, credit, credit. credit, debit, debit. credit, debit, credit. debit, credit, debit.

Mather Company made a purchase of merchandise on credit from Underwood Company on August 8, for $8,000, 3/10, n/30. On August 17, Mather makes the appropriate payment to Underwood. The entry on August 17 for Mather Company is: s Payable

8,000

Inventory Cash s Payable Purchase Returns and Allowances

240 7,760 8,000 240

Cash s Payable

7,760 7,760

Cash s Payable

7,760 8,000

Cash

8,000

Net income from operations is gross profit less financing expenses. operating expenses. other income and expense. other expenses.

On November 2, 2017, Griffey Company has cash sales of €7,000 from merchandise having a cost of €5,000. The entries to record the day's cash sales will include: a €5,000 credit to Cost of Goods Sold. a €5,000 credit to Inventory. a €7,000 debit to s Receivable. a €7,000 credit to Cash.

A credit sale of ₤6,400 is made on April 25, 2/10, n/30, on which a return of ₤400 is granted on April 28. What amount is received as payment in full on May 4? ₤6,272 ₤6,400 ₤6,000 ₤5,880

In of liquidity, inventory is less liquid than store equipment. more liquid than cash. more liquid than s receivable. more liquid than prepaid expenses.

Rowland Company reported the following balances at June 30, 2017: Sales Revenue Sales Returns and Allowances

$32,000 1,000

Sales Discounts Cost of Goods Sold

500 15,500

Net sales for the month is

$31,000. $32,000. $16,500. $30,500.

During 2017, Yoder Enterprises generated revenues of $180,000. The company’s expenses were as follows: cost of goods sold of $90,000, operating expenses of $36,000 and a loss on the sale of equipment of $6,000. Yoder’s gross profit is

$48,000. $90,000. $54,000. $180,000.

The primary source of revenue for merchandising companies is

the sale of merchandise. service fees. the sale of fixed assets the company owns. investment income.

Mineral Makers (MM) Company keeps its inventory records using a perpetual system. At December 31, 2017 the unadjusted balance in the Inventory is $64,000. Through a physical count on December 31, 2017, MM determines that its actual inventory at year-end is $62,500. Which of the following is true regarding the statement of financial position and the income statement of MM at December 31, 2017?

Inventory is decreased and cost of goods sold is increased by $1,500. Inventory is increased and cost of goods sold is increased by $1,500. Inventory is increased and cost of goods sold is decreased by $1,500. Inventory is decreased and cost of goods sold is decreased by $1,500.

Computers For You is a retailer specializing in selling computers and related equipment. During 2017, Computers For You sells $200,000 of merchandise to Sandcastles, Inc. Computers For You incurs $24,000 of freight costs associated with these sales. Which of the following is true regarding how this $24,000 is treated on the financial statements?

Sandcastles, Inc. will report the $24,000 as part of inventory on the statement of financial position. Computers For You will report the $24,000 as part of inventory on the statement of financial position. Computers For You will report the $24,000 as part of operating expenses on the income statement. Sandcastles, Inc. will report the $24,000 as an s receivable on the statement of financial position.

Which of the following is a true statement about inventory systems?

Perpetual inventory systems require more detailed inventory records. A periodic system requires cost of goods sold be determined after each sale. A perpetual system determines cost of goods sold only at the end of the ing period. Periodic inventory systems require more detailed inventory records.

Operating expenditures include salaries, utilities, advertising, and depreciation. Presentation of operating expenses by nature

provides very detailed information, with numerous line items. All of these answer choices are correct.

requires disclosures of additional details regarding the nature of certain expenses. aggregates costs into groupings based on the primary functional activities in which the company engages.

At the beginning of the year, Meng Company had an inventory of ¥500,000. During the year, the company purchased goods costing ¥2,000,000. If Meng Company reported ending inventory of ¥600,000 and sales of ¥2,500,000, the company’s cost of goods sold and gross profit rate must be

¥1,900,000 and 76%. ¥1,900,000 and 24%. ¥1,250,000 and 50%. ¥1,250,000 and 24%.

Computers For You is a retailer specializing in selling computers and related equipment. Which of the following would not be reported in the merchandise inventory reported on the statement of the financial position for Computers For You at December 31, 2017?

Computers purchased for resale during November 2017. Shelving materials purchased during December 2017. Freight costs related to the computers purchased in November. All of these answer choices are correct.

Net sales is sales revenue less sales returns and allowances. sales returns. sales discounts and sales returns and allowances. sales discounts.

In a worksheet for a merchandising company, Inventory would appear in the

trial balance, adjusted trial balance, and statement of financial position columns. trial balance and statement of financial position columns only. trial balance, adjusted trial balance, and income statement columns. trial balance and adjusted trial balance columns only.

Financial information is presented below: Operating Expenses Sales Returns and Allowances Sales Discounts Sales Revenue Cost of Goods Sold

€ 270,000 78,000 36,000 960,000 462,000

Gross profit would be

Gross Profit = Revenue - COGS – sales Returns –Sales Discounts €462,000. €420,000. €384,000. €498,000.

Cost of goods available for sale is computed by adding beginning inventory to the cost of goods purchased. beginning inventory to net purchases. net purchases and freight-in. purchases to beginning inventory.

Asset Classification

Assets Intangible assets

Equity and Liabilities Equity

Property, plant, and equipment Non-current liabilities Long-term investments Current assets

Current liabilities