Hi, I am practicing and I would like a tutor to profread the attached document. Its a MCQ and my answers have been highlighted in green. Thanks

ACCOUNTING EXERCISE MC Questions 1. The account Discount on Notes Payable is: a. a contingent liability. b. an asset because it has a debit balance. c. a contra liability. d. amortized to reduce interest expense over the life of a note. 2. On July 1, Tau, Inc., purchased a machine for $12,000 and issued in payment a one-year note payable for $13,200. On August 31, the company's fiscal year-end, the proper entry would be: a. Interest Expense 200 Discount on Notes Payable 200 b. Machinery 200 Interest Expense 200 c. Discount on Notes Payable 200 Interest Expense 200 d. Notes Payable 200 Discount on Notes Payable 200 3. Moore Realty just completed the purchase of an apartment complex on August 1 for $100,000 down and an 11%, 20-year, $400,000 mortgage note. The note requires monthly principal and interest payments of $4,129, with interest computed on the unpaid note balance. The entry to record the September 1 payment would be: a. Mortgage Note Payable 4,129 Cash 4,129 b. Interest Expense 2,064 Mortgage Note Payable 2,065 Cash 4,129 c. Interest Expense 454 Mortgage Note Payable 3,667 Cash 4,129 d. Interest Expense 3,667 Mortgage Note Payable 462 Cash 4,129 4. On March 1, 19X4, Grand Junction Railroad issued $50,000 of 8%, 10-year bonds dated March 1 for $43,769. Interest is payable on March 1 and September 1. If Grand Junction uses the straight-line method of amortization, how would these bonds appear on the September 1, 19X4, balance sheet? (Round all calculations to the nearest dollar.) a. Long-term liabilities: Bonds payable $50,000 Less: Discount on bonds payable 6,231 $43,769 b. Long-term liabilities: Bonds payable $43,769 Plus: Discount on bonds payable 6,231 $50,000 c. Long-term liabilities: Bonds payable $50,000 Less: Discount on bonds payable 5,919 $44,081 d. Long-term liabilities: Bonds payable $44,081 Plus: Discount on bonds payable 5,919 $50,000 5. Milton Corporation has 20,000 shares of $5 par-value common stock and 60,000 shares of 9%, $2 parvalue preferred stock issued and outstanding. The preferred stock is cumulative. How much are preferred dividends per year? a. $10,800. b. $120,000. c. $100,000. d. $9,000. 6. Media Services' accounting records reflected the following journal entry: Nov. 1 Cash 14,000 Common Stock ($1 Par) 2,000 Paid-in Capital in Excess of Par Value 12,000 From the entry, one can conclude that the company: a. earned $14,000 of revenue. b. has a $12,000 gain on the sale of its stock. c. has a $12,000 increase in total paid-in capital. d. sold 2,000 shares of common stock at $7 per share. 7. How is treasury stock shown in the financial statements? a. As an asset. b. As a reduction of paid-in capital. c. As a reduction of total stockholders' equity. d. It depends on the reason that the treasury stock was acquired. 8. Prost Products has excelled on past treasury stock transactions, selling the stock at above cost resulting in a balance of $1,250 in Paid in Capital from Treasury Stock account. Currently, the company is holding 460 shares of its $2 par-value common stock, reacquired for $2,000. If the stock is reissued for $500, what journal entry will the company's accountant make? a. Cash 500 Treasury Stock 500 b. Cash 500 Loss on Treasury Stock 1,500 Treasury Stock 2,000 c. Cash 500 Paid-in Capital from Treasury Stock 1,500 Treasury Stock 2,000 d. Cash 500 Paid-in Capital from Treasury Stock 1,250 Retained Earnings 250 Treasury Stock 2,000 9. The following journal entry was found in the accounting records of the Sullivan Corp.: Retained Earnings 10,000 Dividends payable 10,000 On what date would the entry have been made? a. Date of declaration. b. Date of record. c. Ex-dividend date. d. Date of payment. 10. Luther Lumber Corporation has 1,000,000 shares of common stock authorized, of which 550,000 shares are issued and outstanding. The common stock has a $10 par value, a $12 book value, and a $13 market value when the corporation declared a 10% stock dividend. What journal entry is required on that date? a. None. b. Retained Earnings 550,000 Dividends Payable 550,000 c. Retained Earnings 660,000 Stock Dividend Distributable 550,000 Paid-in Capital in Excess of Par Value 110,000 d. Retained Earnings 715,000 Stock Dividend Distributable 550,000 Paid-in Capital in Excess of Par Value 165,000 11. Gilbert Corporation's board of directors approved a 2-for-1 common stock split. The common stock had a $10 par value before the split. At what amount should retained earnings be reduced for the additional shares issued? a. Retained earnings is not affected by a stock split. b. Par value of the new shares. c. Market value of the new shares on the declaration date. d. Market value of the new shares on the distribution date. 12. Which of the following items is included on the statement of retained earnings? a. The effects of extraordinary items. b. The effects of discontinued operations. c. The effects of a change in accounting principle. d. Prior period adjustments. 13. Depreciation is a process of: a. Accumulating replacement funds. b. Cost replenishment. c. Cost accrual. d. Cost allocation. 14. On-time Trucking reported the following data for 19X4: Beginning stockholders' equity Capital stock issued Revenues Expenses Dividends paid $32,000 20,000 70,000 25,000 9,000 The company's ending stockholders' equity for 19X4 would be: a. $36,000. b. $45,000. c. $66,000. d. $88,000. 15. Which of the following pairs of accounts are usually current liabilities? a. b. c. d. accounts payable, accounts receivable. prepaid expenses, wages payable. income taxes payable, unearned revenue. notes receivable, bonds payable. 16. If beginning inventory is understated, then: a. goods available for sale will be overstated. b. gross profit will be overstated. c. net income will be understated. d. stockholders' equity will be correct because the error will have been reversed. 17. When preparing a bank reconciliation, deposits in transit are: a. added to the balance per bank statement. b. subtracted from the balance per bank statement. c. added to the balance per company records. d. subtracted from the balance per company records. 18. CC owns a $600,000 building that was purchased four years ago. The firm was recording depreciation under straight line method, estimating a 20-year service life and a $40,000 residual value. At the beginning of this, the 5th year, CC determined that the residual value should be $60,000. As a result of this revision, depreciation in the current year would be: a. $24,250. b. $26,750. c. $27,000. d. $30,500. 19. Using the income statement approach, an estimate of uncollectible accounts may be calculated by taking a percentage of: a. net income. b. allowance for doubtful accounts. c. outstanding accounts receivable. d. credit sales. 20. The following data have been taken from the 19X4 accounting records of Kirby Corp.: Dr. Total sales for 19X4 Credit sales for 19X4 Accounts receivable, 12/31/X4 Allowance for Doubtful Accounts, 12/31/X4 Cr. $450,000 360,000 $63,000 3,000 Kirby estimates that 6% of its accounts receivable will be uncollectible. How much should Kirby record as bad debt expense for 19X4? a. $780. b. $2,700. c. $3,780. d. $6,780. 21. On November 1, 19X8, Forte Company received a $12,000, 3-month, 10% note. How much interest revenue should be reported in 19X8 on this note? a. $100. b. $200. c. $300. d. $1,200. 22. Host, Inc., stocks a variety of inventory items. The company began to stock item no. 675 in February of the current year and made the following purchases: Feb. 9 June 8 Oct. 3 200 units at $10.00 500 units at $10.50 300 units at $10.75 If Host uses the first-in, first-out method of inventory valuation and 350 units were on hand as of December 31, the firm's cost of goods sold would amount to: a. b. c. d. $3,575. $3,750. $6,725. $6,900. 23. Oxford Company had a beginning inventory of 700 units that cost $9.00 each. Purchases were made in June (3,600 units) and October (5,800 units) at costs of $9.50 and $9.80, respectively. If Oxford uses LIFO and a physical count revealed 1,100 units on hand, the company's balance sheet would disclose an ending inventory valuation of: a. b. c. d. $10,100. $10,780. $86,560. $87,240. 24. Jackson's inventory cost on the balance sheet was lower when using first-in, first-out than when using lastin, first-out. Assuming no beginning inventory, in which direction did the cost of purchases move during the year? a. b. c. d. Up. Down. Steady. Cannot be determined. 25. Palmer Products purchased a new delivery truck. The truck had a manufacturer's listed retail price of $14,000 and a negotiated purchase price of $13,200. The purchase was subject to terms of 2/10, n/30, but Palmer did not remit payment until 22 days after the purchase. At what amount should Palmer record the truck on its books? a. b. c. d. $12,936. $13,200. $13,720. $14,000. 26. Hanley Manufacturing purchased a new machine on January 1, 19X4, for $47,000 plus $8,000 of freight and installation costs. Hanley uses the double declining method of recording depreciation, and estimates the machine will last 10 years and have a residual value of $5,000. What amount of depreciation will Hanley record in 19X5? a. b. c. d. $6,720. $8,800. $7,520. $8,000. 27. When comparing the accounting treatments that accompany exchanges of similar assets and exchanges of dissimilar assets, one will find that: a. gains on exchanges of similar assets are recognized. b. losses on exchanges of similar assets are not recognized. c. gains on exchanges of dissimilar assets are not recognized. d. losses on exchanges of dissimilar assets are not recognized. 28. For the month ended January 31, Ponzi Plastic Co. had net sales of $100,000, total goods available for sale of $70,000, and an estimated gross profit percentage of 40%. Ponzi's estimated inventory at the end of January is: a. b. c. d. $10,000 $30,000 $40,000 $60,000 29. Grant's Garage recently remodeled its repair shop and performed major overhauls on existing equipment costing $30,000. If these overhauls extended the assets' lives by an average of six years, the proper journal entry would be: a. Equipment 30,000 Cash 30,000 b. Remodeling Expense 30,000 Cash 30,000 c. Accumulated Depreciation: Equipment 30,000 Cash 30,000 d. Building 30,000 Cash 30,000 30. On March 1, 19X5, Curtis Corporation accepted a $20,000, 6 month, 10% note on account from Gloria Lawless. Assume that Gloria defaults on the note on August 31. The entry to reflect the default will include: a. b. c. d. Debit note receivable $21,000. Debit accounts receivable $21,000. Debit note receivable $20,000. Debit accounts receivable $20,000. Answer Sheet Answers for Multiple Choice questions: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30