Florida International University - ACCOUNTING FINANCIAL

Test 1:

1)Which of the following statements describes the balance sheet?

2. The most fundamental qualities of useful information are?
3. Liabilities are defined as:
4. If total liabilities decreased by $75,000 and total assets decreased by 90,000 during the same accounting time period, what happened to the total () period?
5. Pair Inc. compiled the following financial information as of December 31, 2015: Pair Inc.’s total assets on December 31, 2015 are
6. Pair Inc. compiled the following financial information as of December 31, 2015: Pair Inc.’s net income or (loss) for the year ending in December 31, 2015 is
7. Which of the following combination of ratios is preferable?
8. Which of the following causes the accounting equation not to balance?
9. Which of the following accounts are reported on a company’s income statement and balance sheet?
10. In an accounting system, after a transaction has been journalized, it is transferred to the
11. On a trial balance, which of the following would indicate that an error has been made?
12. Office furniture, Wage Payable, and Expenses have normal balances of:
13. The trial balance:
14. The following comments each relate to the recording of journal entries. Which statement is true?
15. When a company pays an amount owed to one of its vendors:
16. A company paid cash for services received previously by debiting Expense for $1,000 and crediting Accounts Payable for $1,000. The entry needed to correct this error is
17. ABC Inc. earned revenues of $185,000 in cash and $220,000 on account during 2012. Of the $220,000 on account, 20% was collected in cash after the sale date. The company incurred expenses of $235,000 and made related cash payments of $70,000. Compute the

net income under (a) cash basis accounting and (b) the accrual basis accounting.

18. Faucet Plumbing receives a phone call from a customer needing a new water heater on October 29 and schedules a consultation for a free estimate on November 3. Johnson installs the new water heater on November 5. The customer pays for service on November 15. According to the revenue recognition principle, on which date should Johnson record service revenue?
19. On May 1, 2013, a two-year insurance policy was purchased for $48,000 with coverage to begin immediately. What is the amount of Prepaid insurance that appears on the company’s balance sheet on December 31, 2014?
20. On November 1, 2013, Stockton Co. receives $7,200 cash from Hans Co. for consulting services to be provided by Stockton Co. evenly over the period November 1, 2013, to April 30, 2014. The adjusting entry on December 31, 2013 (Stockton’s year-end) would include a
21. Which of the following is not a characteristic of adjusting entries?
22. A company started the year with $400 of supplies. During the year, the company purchased an additional $1860 of supplies. There was $750 of supplies on hand at the end of the year. How much Supplies Expense did the company reports that year?
23. Mason Inc. pays its employees every Friday for work rendered in that week between Mondays and Fridays. The payroll is typically $18,000 for one week. What adjusting journal entry would be recorded if the end of the accounting period occurred on a Wednesday?
24. Power company is preparing the closing entries at the end of its 2013 accounting period. Power company has normal balances in the following accounts:

Retained Earnings, beginning balance–$25,000 Service Revenue–$60,000

Salaries Expense–$12,000 Dividends–$5000

What are the balances in the following accounts after the closing journal entries are posted?

25. J&J Company failed to record interest revenue earned on a note receivable from a customer during the period when it closed its accounting period. J&J company will receive the interest revenue during the next accounting period. As a result, current period assets, liabilities, and income respectively, are:
26. Which one of the following is not an example of detective controls?
27. What is the concept behind segregation of duties in establishing internal control?
28. Which one of the following is not an objective of a system of internal controls?

29. What is bank reconciliation?
30. Cash and cash equivalents do not include
31. In comparing the activity on the April bank statement with entries in the accounting records, it is found that a check received by a customer was deposited and properly credited by the bank in the amount of $7,426 but was recorded improperly properly in the accounting records as $4,726. When preparing the April’s bank statement, the company should:
32. Which of the following will adjust the company’s book balance of cash in bank reconciliation?
33. If a bank reconciliation included a deposit from a customer in transit of $790, the entry to record the reconciling item in the books would include a
34. The total cost of the trading securities portfolio is $347,000 and the total fair market value is $364,000 at the end of the first year of operations. What should the financial statements show?
35. When a company sells a trading security, the Gain on the Sale of Trading Securities is reported in:
36. When a company sells a trading security, the gain on the sale of trading securities is reported in:
37. Promises to pay from customers that resulted from sales transactions are often called
38. Accounts receivable and the estimated uncollectible percentages revealed the following

$120,000 1-30 days  1%

$80,000 31-60 days  3%

$40,000 61-90 days  10%

$10,000 Over 90 days  50%

the pre-adjusted balance and allowance for uncollectible accounts was $13,800. Under aging-of-receivables method, the adjustment is debt expense for the period will include:

39. The allowance for uncollectible accounts Account has a year-end credit balance, prior to adjustment, of $450. The uncollectible expenses are estimated at 3% of $650,000, the net credit sales. After the appropriate adjusting entry, the allowance for uncollectible accounts should have a balance of:
40. The entry to record the right off of an uncollectible accounts receivable would be
41. SimonB Corp had gross sales total $300,000 during 2014, all sold on credit. Sales returns and allowances were $15,000 sales discounts of () taken on all of the current year’s credit sales and bad debt expense of $3000 was recorded during the period. What is the total () amount of net sales during 2014?
42. During 2014, XYZ Inc. sold merchandise worth $320,000. It has $60,000 of beginning accounts receivables and ($78,000) of ending accounts receivables. What is company’s days’ sales in receivables (rounded)?
43. Micro company receives a 180 day, 9% note receivable for $10,000 on November 1. How much interest should be accrued on December 31?
44. Which of the following is true of perpetual inventory system?
45. Michael Company has the following activity:

July 1 Beginning Inventory 75 units @ $25 each July 3 Purchases 348 units @ $27 each

July 15 Purchase 257 units @ $28 each July 23 Sales 575 units

Assume that Michael uses a FIFO inventory system. What is the value of Ending Inventory?

46. Sloan Corp have the following activity during the year: Beginning inventory January 1 1,000 units at $3.00 Purchased May 15  2,200 units at $3.20

Purchased November 30 4,000 units at $4.32 Sales during the year were 5,400 units.

Cost of Goods Sold using the weighted-average costing method would be:

47. Goods held on consignment are
48. Merchandise sold FOB Destination indicates that:
49. Maybell Inc. has the following items for the month of July (in millions): Sales revenue $12,890

Cost of goods sold $10,421 Beginning inventory $2,089 Ending inventory $1,841

Inventory turnover is:

50. Suppose Alex Corporation overstated its ending inventory amount. What effect will this have it in the year of the (error)?

51. Company had the following records: () $217,000

Beginning inventory 15,000

Net purchases 140,000

Ending inventory 20,000

What is the cost of goods sold and gross profit for this company?

52. When inventory costs are increasing, the LIFO costing method will yield a cost of goods sold that is:

Test 2:

1. Which of the following is a fundamental quality of accounting information?
2. The common characteristic possessed by all assets is
3. Which of the following causes the accounting equation not to balance?
4. A chart of accounts:
5. In recording an accounting transaction in a double-entry system
6. When a company sells merchandise, but the customer does not pay it immediately, it should
7. Sale of merchandise on a credit for $4000 was recorded by debiting cash and crediting sales. The entry needs to be corrected by:
8. Under accrual-basis accounting
9. Adjusting entries

10. Prior to recording adjusting entries; the supplies account has a $900 debit balance. A physical count of supplies shows $250 dollars of unused supplies still available. The () adjusting entry is:
11. Power company is preparing the closing entries at the end of its 2013 accounting period. Power company has normal balances in the following accounts:

Retained Earnings, beginning balance–$25,000 Service Revenue–$60,000

Salaries Expense–$15,000 Dividends–$5,000

What are the balances in the following accounts after the closing journal entries are posted?

12. At the end of the current accounting period, Johnson company failed to record utilities consumed during the period. Johnson will be billed for the () accounting period. As a result, current period assets, liabilities, equity, and income, respectively, are:
13. Which of the following is an example of detective control?
14. Which of the following is a primary concern of internal control?
15. What is a bank statement?
16. A customer’s check was returned for nonsufficient funds. Which of the following journal entries as needed to adjust for the NSF check?
17. Which of the following would not be reported on the balance sheet as a cash or cash equivalent?
18. In comparing the canceled checks on the bank statement with entries in the accounting records, It is found that check number 1348 for () drawn in the amount of

$7,426 but was recorded improperly and the accounting records as $4,726. One preparing the April bank statement ().

19. If a bank reconciliation and included outstanding checks of $10,880, the journal entry to record the reconciling item and the books would include a
20. The total cost of the trading securities portfolio is $364,000 and the total fair market value is $347,000 at the end of the first year of operations. What should the financial statements show?
21. Using the allowance method, the entry to record a write-off method of accounts receivable will include:
22. A company has net credit sales of $2,000,000, cost of goods sold of $1,490,000, a beginning imbalance of net receivables of $202,000 and an ending balance of net receivables of $245,000. What is the company’s days’ sales in receivables (rounded)?
23. Micro company received a 90 day, 6% note receivable for $10,000 on December 1. How much interest should be accrued on December 31?
24. Which of the following is true of perpetual inventory system?
25. Consider the following information: Sales, $150,000; beginning inventory, $30,000; ending inventory, $24,000; and purchases, $90,000 () gross margin percent, respectively?

Test 3:

1. If the assets of the company increased by $200,000 during the year and its equity decreased by $70,000 dollars during the year, then the change in liabilities of the company during the year must have been:

2. Which of the following accounts are reported on a company’s income statement and balance sheet?

3. Salary payable, land, and Retained Earnings have normal balances of:

4. Under cash-basis accounting:

5. Allied, Inc bought a 2-year insurance policy on August 1 for $3,600…
6. Hobbins received $6,000…
7. A company started the year with no supplies. During this year they bought $200 worth of supplies on account and later paid $150 dollars of this debt. If there is $40 of supplies left at the end of this year, what was the supply expense for the period?