PLEASE ANSER ALL THE QUESTIONS OR I WILL MARK AS INCOMPLETE

61. Outstanding checks, deposits in transit, and bank service charges are added to the beginning balance of the bank statement to determine the adjusted bank balance.

True or False?

62. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is:

Multiple Choice

a. Debit Merchandise Inventory $1,600; credit Cash $1,600.

b. Debit Merchandise Inventory $200; credit Accounts Payable $200.

c. Debit Merchandise Inventory $200; credit Sales Returns $200.

d. Debit Accounts Payable $200; credit Merchandise Inventory $200.

e. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600.

63. Plant assets can be disposed of by discarding, selling, or exchanging them. True or False?

64. Fields Company purchased equipment on January 1 for $180,000. This system has a useful life of 8 years and a salvage value of $20,000. The company estimates that the equipment will produce 40,000 units over its 8-year useful life. Actual units produced are: Year 1 4,000 units; Year 2 6,000 units; Year 3 8,000 units; Year 4 5,000 units; Year 5 4,000 units; Year 6 5,000 units; Year 7 7,000 units; Year 8 3,000 units. What would be the depreciation expense for the final year of its useful life using the units-of-production method?

Multiple Choice

a. $164,000.

b. $12,000.

c. $33,750.

d. $24,000.

e. $4,000.

65. A company's cost of inventory was $219,500. Due to phenomenal demand the market value of its inventory increased to $221,700. This company should record the inventory at its market value. True or False?

66. If a check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period, in preparing this period's reconciliation, the amount of this check should be:

Multiple Choice

a. Added to the book balance of cash as an outstanding check.

b. Deducted from the book balance of cash as an outstanding check.

c. Added to the bank balance of cash as an outstanding check.

d. Deducted from the bank balance of cash as an outstanding check.

e. Ignored in preparing the period's bank reconciliation as an outstanding check.

67. If an asset is sold above its book value, the selling company records a loss. True or False?

68. Gracey's Department Stores has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. Gracey's also has $600,000 of common stock outstanding. During its first year, the company paid cash dividends of $30,000. This dividend should be distributed as follows:

Multiple Choice

a. $15,000 preferred; $15,000 common.

b. $6,000 preferred; $24,000 common.

c. $30,000 preferred; $0 common.

d. $12,000 preferred; $18,000 common.

e. $0 preferred; $30,000 common.

69. Each sales transaction for a seller that uses a perpetual inventory system involves recognizing both revenue and cost of merchandise sold. True or False?

70. The full disclosure principle requires that the notes to the financial statements report any change in the method of accounting for inventory. True or False?

71. A corporation with $10 par common stock issues a small stock dividend. The capitalization of retained earnings is equal to:

Multiple Choice

• The par value of the shares to be distributed.

• The par value of the shares outstanding.

• The market value of the shares to be distributed.

• The market value of the shares outstanding.

• There is no capitalization of retained earnings in the case of a small stock dividend

72. An asset's book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record:

Multiple Choice

a. A loss on sale of $12,000.

b. A gain on sale of $12,000.

c. Neither a gain nor a loss is recognized on this transaction.

d. A gain on sale of $3,000.

e. A loss on sale of $3,000.

73. Accounting principles require that inventory be reported at the market value (cost) of replacing inventory when cost is lower than market value. True or false?

74. Credit terms for a purchase include the amounts and timing of payments from a buyer to a seller. True or false?

75. The costs of goods purchased will vary under the different inventory methods of specific identification, FIFO, LIFO, and weighted average. True or False?

76. A company had the following purchases and sales during its first month of operations:

January 1	Purchased 10 units at $4.00 per unit
January 9	Sold 6 units at $12.00 per unit
January 17	Purchased 8 units at $5.50 per unit
January 27	Sold 7 units at $12.00 per unit

Using the Perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)

Multiple Choice

a. $40.00.

b. $59.00.

c. $25.00.

d. $24.00.

e. $23.35.

77. Paid and declared preferred dividends are called dividends in arrears. True or False?

78. When a corporation has only one class of stock, the stock is called:

Multiple Choice

a. Preferred stock.

b. Common stock.

c. Par value stock.

d. Stated value stock.

e. No-par value stock.

79. A company issued 60 shares of $100 par value common stock for $7,000 cash. The journal entry to record the issuance is:

Multiple Choice

a. Debit Cash $7,000; credit Common Stock $7,000.

b. Debit Investment in Common Stock $7,000; credit Cash $7,000.

c. Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000.

d. Debit Common Stock $6,000, debit Investment in Common Stock $1,000; credit Cash $7,000.

e. Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000.

80. Each sale of merchandise has two parts: the revenue side and the cost side. True or False?