A bookkeeper has debited an asset account for $5,500 and credited a liability account for $3,000. Which of the following would be an incorrect way to complete the recording of this transaction?

Multiple Choice

• Debit another asset account for $2,500.

• Credit the owner's capital account for $2,500.

• Credit another asset account for $2,500.

• Credit a revenue account for $2,500.

• Credit another liability account for $2,500.

• A company recorded 2 days of accrued salaries of $1,750 for its employees on January 31. On February 9, it paid its employees $7,700 for these accrued salaries and for other salaries earned through February 9. Assuming the company does not prepare reversing entries, the January 31 and February 9 journal entries are:

  Multiple Choice

• 1/31	Salaries Expense	1,750
  	Salaries Payable		1,750
  2/9	Salaries Expense	7,700
  	Cash		7,700

• 1/31	Salaries Payable	1,750
  	Salaries Expense		1,750
  2/9	Salaries Expense	5,950
  	Salaries Payable	1,750
  	Cash		7,700

• 1/31	Salaries Expense	1,750
  	Salaries Payable		1,750
  2/9	Salaries Payable	7,700
  	Salaries Expense	1,750
  	Cash		7,700

• 1/31	Salaries Expense	1,750
  	Cash		1,750
  2/9	Salaries Expense	7,700
  	Cash		7,700

• 1/31	Salaries Expense	1,750
  	Salaries Payable		1,750
  2/9	Salaries Expense	5,950
  	Salaries Payable	1,750
  	Cash		7,700

• On March 12, Klein Company sold merchandise in the amount of $8,600 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,900. Klein uses the perpetual inventory system and the net method of accounting for sales. On March 15, Babson returns some of the merchandise, which is not defective. The selling price of the returned merchandise is $680 and the cost of the merchandise returned is $390. The entry or entries that Klein must make on March 15 is (are):

  Multiple Choice

• Sales returns and allowances	666
  Accounts receivable		666
  Merchandise inventory	382
  Cost of goods sold		382

• Sales returns and allowances	666
  Accounts receivable		666
  Merchandise inventory	390
  Cost of goods sold		390

• Accounts receivable	680
  Sales returns and allowances		680
  Cost of Goods Sold	390
  Merchandise inventory		390

• Sales returns and allowances	390
  Accounts receivable		390

• Accounts receivable	680
  Sales returns and allowances		680

Cushman Company had $838,000 in sales, sales discounts of $12,570, sales returns and allowances of $18,855, cost of goods sold of $398,050, and $288,270 in operating expenses. Net income equals:

Multiple Choice

• $806,575.

• $408,525.

• $183,105.

• $120,255.

• $151,680.

• Jeff Jackson opened Jackson's Repairs on March 1 of the current year. During March, the following transactions occurred:

• Jackson invested $29,000 cash in the business.
• Jackson contributed $104,000 of equipment to the business.
• The company paid $2,400 cash to rent office space for the month of March.
• The company received $20,000 cash for repair services provided during March.

• Based on this information, net income for March would be:

  Multiple Choice

• $8,000.

• $17,400.

• $5,700.

• $13,500.

• $17,500.

• On October 1, Goodwell Company rented warehouse space to a tenant for $3,700 per month and received $18,500 for five months rent in advance on that date, with the lease beginning immediately. The cash receipt was credited to the Unearned Rent account. The companys annual accounting period ends on December 31. The Unearned Rent account balance at the end of December, after adjustment, should be:

  Multiple Choice

• $14,800.

• $18,500.

• $7,400.

• $3,700.

• $11,100.

• The assets of a company total $714,000; the liabilities, $207,000. What is the amount of equity?

  Multiple Choice

• $507,000.

• $714,000.

• $921,000.

• It is impossible to determine unless the amount of the owners' investment is known.

• $207,000.

• Arrow's net income of $118 million and average assets of $1,500 million results in a return on assets of 7.87%.

  Group startsTrue or False

  True, unselectedFalse, unselected

• On September 12, Ryan Company sold merchandise in the amount of $6,600 to Johnson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,400. Ryan uses the periodic inventory system and the net method of accounting for sales. Johnson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Ryan makes on September 18 is:

  Multiple Choice

• Cash	6,600
  Accounts receivable		6,600

• Cash	6,468
  Sales discounts	132
  Accounts receivable		6,600

• Cash	4,312
  Sales discounts	88
  Accounts receivable		4,400

• Cash	6,468
  Accounts receivable		6,468

• Cash	4,400
  Accounts receivable		4,400

A company's quick assets are $179,000 and its current liabilities are $159,000. This company's acid-test ratio is 1.13.

Group startsTrue or False

True, unselectedFalse, unselected

Based on the following information from Schrute Company's balance sheet, calculate the current ratio.

Current assets	$	93,000
Investments		51,200
Plant assets		270,000
Current liabilities		41,000
Long-term liabilities		92,000
A. Schrute, Capital		281,200

Multiple Choice

• 1.08.

• 3.11.

• 3.52.

• 2.27.

• 0.44.

• The company paid $6,600 for salaries for the month of March.
• The company provided $3,400 of services to customers on account.
• The company paid cash of $900 for utilities for the month of March.
• The company received $3,500 cash in advance from a customer for repair services to be provided in April.
• Jackson withdrew $5,400 for his personal use from the company.