ACC 255 Exam 2 Practice Multiple Choice

ACC 255 Exam 2 Practice Multiple Choice 1. The two fundamental qualities of financial information A B C comparability and consistency relevance and faithful representation understandability and readability verifiability and timeliness D 2. What ama What amount should a company reports Total Property. Plant and Equipment on its classified balance sheet, based on the following selected account balances? Accumulated depreciation $300,000 Land $ 500.000 Buildings & equipment 1.250,000 Long-term investments 350.000 Trademark 100.000 A B C D. $2,500,000 $1.450.000 $1,750,000 $1,550.000 3. What is the amount of income from Operations that a company should report on its current year multiple step income statement based on the following data? Cost of goods sold S 250.000 Net sales $ 600,000 Income taxes expense 50 000 Selling general & Interest expense 25.000 administrative expenses 150.000 A $125,000 B. $175.000 C. $200,000 D. $350,000 4. All of the following are classified as Current Assets on a company's classified balance sheet except A Goodwill B. Accounts Receivable C Inventory D. Prepaid Insurance 5. A company sold merchandise on credit for $1,200; the cost of the merchandise was $700. The company's journal entry to record the sale will include A Debit Accounts Receivable $1,200, credit Inventory $700, and credit Profit on Sale $500 B. Debit Accounts Receivable $1,200 and credit Sales Revenue $1.200 C. Debit Salos Revenue $1,200 and credit Inventory $1,200 D. Debit Cost of Goods Sold $1,200 and credit Sales Revenue $1,200 HICCAN VERSION 12 6. A company has 10,000 shares of common stock outstanding and reports total stockholders' equity of $35,000, net sales for the year of $150.000, and net income for the year of $21,000. What is the amount of the company's earnings per share? A $2.10 B $0.48 C. $15.00 D. $350 7. A company estimates uncollectible accounts using the percentage of receivables basis. Prior to adjustment, the company has an accounts receivable balance of $900.000 and the allowance has a credit balance of $2.000. If the allowance is estimated to be 2% of recolvables. What is the amount of bad debt expense? A $20.000 B. $16,000 C. $17.960 D. $18,000 8. On December 1. The Bank lends a customer $20,000 and accepts a 4-month, 6% promissory note. What is the December 31 year-end adjusting entry recorded by The Bank to accrue interest on the note? A Debit interest Expense $100 and credit Interest Payable $100 B. Debit Interest Receivable $100 and credit Interest Revenue $100 C. Debit Notes Receivable $20,000 and credit Cash $20,000 D. Debit interest Receivable $300 and credit Interest Revenue $300 Use the following information to answer the next two questions! A company has the following inventory data: July 1 Beginning inventory 20 units @ $20 $ 400 7 Purchases 70 units $21 1,470 22 Purchases 10 units @ $22 220 Goods available for sale 100 units $ 2.090 During July, the company sold 70 units, which left 30 units on hand at the end of July. 9. If the company uses the FIFO costing method, what is July's cost of goods sold? A $1,480 B. $1,470 C. $1,450 D. $640 10. If the company uses the average cost method, what is July's cost of goods sold? A $627 B. $630 C. $1,463 D. $1,470 ACC 255 Exam 2 Practice Multiple Choice 1. The two fundamental qualities of financial information A B C comparability and consistency relevance and faithful representation understandability and readability verifiability and timeliness D 2. What ama What amount should a company reports Total Property. Plant and Equipment on its classified balance sheet, based on the following selected account balances? Accumulated depreciation $300,000 Land $ 500.000 Buildings & equipment 1.250,000 Long-term investments 350.000 Trademark 100.000 A B C D. $2,500,000 $1.450.000 $1,750,000 $1,550.000 3. What is the amount of income from Operations that a company should report on its current year multiple step income statement based on the following data? Cost of goods sold S 250.000 Net sales $ 600,000 Income taxes expense 50 000 Selling general & Interest expense 25.000 administrative expenses 150.000 A $125,000 B. $175.000 C. $200,000 D. $350,000 4. All of the following are classified as Current Assets on a company's classified balance sheet except A Goodwill B. Accounts Receivable C Inventory D. Prepaid Insurance 5. A company sold merchandise on credit for $1,200; the cost of the merchandise was $700. The company's journal entry to record the sale will include A Debit Accounts Receivable $1,200, credit Inventory $700, and credit Profit on Sale $500 B. Debit Accounts Receivable $1,200 and credit Sales Revenue $1.200 C. Debit Salos Revenue $1,200 and credit Inventory $1,200 D. Debit Cost of Goods Sold $1,200 and credit Sales Revenue $1,200 HICCAN VERSION 12 6. A company has 10,000 shares of common stock outstanding and reports total stockholders' equity of $35,000, net sales for the year of $150.000, and net income for the year of $21,000. What is the amount of the company's earnings per share? A $2.10 B $0.48 C. $15.00 D. $350 7. A company estimates uncollectible accounts using the percentage of receivables basis. Prior to adjustment, the company has an accounts receivable balance of $900.000 and the allowance has a credit balance of $2.000. If the allowance is estimated to be 2% of recolvables. What is the amount of bad debt expense? A $20.000 B. $16,000 C. $17.960 D. $18,000 8. On December 1. The Bank lends a customer $20,000 and accepts a 4-month, 6% promissory note. What is the December 31 year-end adjusting entry recorded by The Bank to accrue interest on the note? A Debit interest Expense $100 and credit Interest Payable $100 B. Debit Interest Receivable $100 and credit Interest Revenue $100 C. Debit Notes Receivable $20,000 and credit Cash $20,000 D. Debit interest Receivable $300 and credit Interest Revenue $300 Use the following information to answer the next two questions! A company has the following inventory data: July 1 Beginning inventory 20 units @ $20 $ 400 7 Purchases 70 units $21 1,470 22 Purchases 10 units @ $22 220 Goods available for sale 100 units $ 2.090 During July, the company sold 70 units, which left 30 units on hand at the end of July. 9. If the company uses the FIFO costing method, what is July's cost of goods sold? A $1,480 B. $1,470 C. $1,450 D. $640 10. If the company uses the average cost method, what is July's cost of goods sold? A $627 B. $630 C. $1,463 D. $1,470