• On September 12, Ryan Company sold merchandise in the amount of $8,200 to Johnson Company, with credit terms of 3/10, n/30. The cost of the items sold is $5,200. Johnson uses the periodic inventory system and the net method of accounting for purchases. The journal entry that Johnson will make on September 12 is:

• Multiple Choice

• Purchases	7,954
  Accounts payable		7,954

• Purchases	8,200
  Accounts payable		8,200

• Merchandise inventory	7,954
  Accounts payable		7,954

• Accounts payable	8,200
  Merchandise inventory		8,200

• Merchandise inventory	5,200
  Accounts payable

  Using the following year-end information for Calvins Clothing, calculate the current ratio and acid-test ratio for the business:

  Cash	$ 62,000
  Short-term investments	17,500
  Accounts receivable	65,000
  Inventory	340,000
  Prepaid expenses	14,030
  Accounts payable	111,500
  Other current payables	40,000

  rev: 11_11_2020_QC_CS-239724

  Multiple Choice

• 3.29 and 0.95

• 3.45 and 1.05

• 2.45 and 1.00

• .29 and 1.00

• 2.45 and 0.95

• The credit purchase of a new oven for $6,100 was posted to Kitchen Equipment as a $6,100 debit and to Accounts Payable as a $6,100 debit. What effect would this error have on the trial balance?

  Multiple Choice

• The total of the Debit column of the trial balance will exceed the total of the Credit column by $12,200.

• The total of the Debit column of the trial balance will exceed the total of the Credit column by $6,100.

• The total of the Credit column of the trial balance will exceed the total of the Debit column by $6,100.

• The total of the Debit column of the trial balance will equal the total of the Credit column.

• The total of the Credit column of the trial balance will exceed the total of the Debit column by $12,200.

• A company's December 31 work sheet for the current period appears below. Based on the information provided, what is net income for the current period?

  		Unadjusted Trial Balance						Adjustments
  		Debit			Credit			Debit			Credit
  Cash		2,045
  Accounts receivable		1,070						945
  Prepaid insurance		1,670									720
  Supplies		400									185
  Equipment		8,390
  Accumulated depreciationequipment					790						260
  Accounts payable					1,210
  Owner, Capital					9,530
  Owner, Withdrawals		1,120
  Fees earned					7,320						945
  Rent expense		1,370
  Salaries expense		2,370
  Utilities expense		415
  Insurance expense								720
  Supplies expense								185
  Depreciation expenseequipment								260
  Totals		18,850			18,850			2,110			2,110

  Multiple Choice

• $2,260.

• $4,110.

• $2,945.

• $2,000.

• $3,165.

• A buyer of $8,900 in merchandise inventory failed to take advantage of the vendor's credit terms of 3/15, n/45, and instead paid the invoice in full at the end of 45 days. By not taking advantage of the cash discount, the buyer lost the discount of:

  Multiple Choice

• $267.

• $89.

• $1,335.

• $100.

• $890.

• After posting the entries to close all revenue and expense accounts, Marker Company's Income Summary account has a credit balance of $6,400, and its Marker, Withdrawals account has a debit balance of $2,700. These balances indicate that net income for the current accounting period amounted to $3,700.

  Group startsTrue or False

  True, unselectedFalse, unselected

• Mega Skateboard Supplier had net sales of $2.6 million, its cost of goods sold was $1.4 million, and its net income was $.9 million. Its gross margin ratio equals:

  Multiple Choice

• 64%.

• 186%.

• 54%.

• 46%.

• 35%.

• The following information is available for the Higgins Travel Agency. After closing entries are posted, what will be the balance in the C. Higgins, Capital account?

  Net Income	$	43,500
  C. Higgins, Capital		130,500
  C. Higgins, Withdrawals		12,400

  Multiple Choice

• $74,600.

• $161,600.

• $99,400.

• $130,500.

• $186,400.

• The Unadjusted Trial Balance columns of a company's work sheet shows the Store Supplies account with a balance of $400. The Adjustments columns show a credit of $225 for supplies used during the period. The amount shown as Store Supplies in the Balance Sheet columns of the work sheet is:

  Multiple Choice

• $400 credit.

• $175 debit.

• $400 debit.

• $175 credit.

• $225 debit.

• KLM Corporation's quick assets are $5,983,000, its current assets are $12,465,000 and its current liabilities are $8,059,000. Its acid-test ratio equals:

  Multiple Choice

• 0.48.

• 0.65.

• 1.35.

• 2.29.

• 0.74.

• Wilson Company paid $6,400 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $6,400, and no adjustments had been made previously. The adjusting entry required on December 31 is:

  Multiple Choice

• Debit Prepaid Insurance, $3,200; credit Insurance Expense, $3,200.

• Debit Insurance Expense, $1,600; credit Prepaid Insurance, $1,600.

• Debit Cash, $6,400; Credit Prepaid Insurance, $6,400.

• Debit Prepaid Insurance, $1,600; credit Insurance Expense, $1,600.

• Debit Insurance Expense, $3,200; credit Prepaid Insurance, $3,200.

• On September 1, Kennedy Company loaned $104,000, at 12% annual interest, to a customer. Interest and principal will be collected when the loan matures one year from the issue date. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end?

  Multiple Choice

• Debit Cash, $4,160; credit Interest Revenue, $4,160.

• Debit Interest Expense, $12,480; credit Interest Payable, $12,480.

• Debit Interest Receivable, $12,480; credit Cash, $12,480.

• Debit Interest Expense, $4,160; credit Interest Payable, $4,160.

• Debit Interest Receivable, $4,160; credit Interest Revenue, $4,160.

• The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Brendon, Capital?

  J. Brendon, Capital	$	162,000
  J. Brendon, Withdrawals		57,500
  Fees earned		270,000
  Depreciation ExpenseEquipment		17,550
  Wages expense		102,600
  Interest expense		5,000
  Insurance expense		16,800
  Rent expense		35,100

  Multiple Choice

• $104,500.

• $50,500.

• $35,450.

• $92,950.

• $53,000.

• For the year ended December 31, a company had revenues of $197,000 and expenses of $118,200. The owner withdrew $39,400 during the year. Which of the following entries could notbe a closing entry?

  Multiple Choice

• Debit Income Summary $78,800; credit Owner's, Capital $78,800.

• Debit revenues $197,000; credit Income Summary $197,000.

• Debit Income Summary $118,200, credit expenses $118,200.

• Debit Owners Capital $39,400; credit Owner Withdrawals $39,400.

• Debit Income Summary $197,000; credit revenues $197,000.

• Kline Company accrued wages of $8,650 that were earned by employees unpaid at the year-end. Assuming Kline uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year?

  Multiple Choice

• Debit Wages Payable $8,650; credit Cash $8,650.

• Debit Wages Expense $8,650; credit Cash $8,650.

• Debit Wages Payable $8,650; credit Wages Expense $8,650.

• Debit Wages Expense $8,650; credit Wages Payable $8,650.

• Debit Cash $8,650; credit Wages Expense $8,650.

• A company earned $2,205 in net income for October. Its net sales for October were $10,500. Its profit margin is:

  Multiple Choice

• 21%.

• 200%.

• 476%.

• 2%.

• 6%.