Please solve the following exercises

1. An economic entity sells on credit 10 chairs for 40$, VAT 19%, cost of conversion for sold chairs = 300 $. Journalize the sale of chairs.

2.Inventories:

a)are assets held to be sold to third parties in order to obtain income

b)are held for the long-term operations of the business

c)are tangible assets that enter the company only through production

d)are sold later on for less than the value at what they were obtained

3.The journal entry to record the contribution with building (valued at par value of shares) to share capital involves: a debit to Buildings and a credit to Share capital.

True

False

4.The difference between issue value and par value at the issuance of new shares will be register: a debit to Subscribed and not paid in share capital.

True

False

5.Unearned Revenue is an asset account.

True

False

6.The statement of changes in equity presents:

a)information of a non-financial nature such as measures of physical quantities of stocks and output

b)only income and expenses that affect the profit of the company

c)the financial position of an entity at a point in time

d)the modifications in equity for a specific period of time

7.When services are performed on credit, what is the effect?

a)accounts payable increases and revenues decreases

b)both cash and revenues increase

c)both cash and revenues decrease

d)both accounts receivable and revenues increase

8.In March, the company pays insurance for April, May, June (300 lei). Choose the correct accounting formula for the payment of insurance.

Expense insurance = Cash 300

Prepaid insurance = Cash 100

Cash = Prepaid insurance 300

Prepaid insurance = Cash 300

9.The financial statement that reports the portion of change in owner's equity resulting from revenues and expenses during a specified time interval is the:

a)income statement

b)cash flow statement

c)balance sheet

d)statement of retained earnings

10. A company incurred (received the bill for) electrical power costs for administrative purpose of 800 lei. Choose the correct accounting formula to register the invoice.

a)Suppliers of electrical power = Cash 800

b)Electrical expense = Suppliers 800

c)Electrical expense = Cash 800

d)Cash = Suppliers of electrical power 800

11. Which of the following methods of depreciation results in relatively larger amounts of depreciation in early years of assets file and smaller amounts in later years?

the accelerated method

the straight-line depreciation method

the units of production method

declining balance method

12.The journal entry to record the receiving a long-term loan involves: a debit to cash and a credit to Long term bank loans.

True

False

13. The journal entry to record the acquisition of raw materials on credit involves: a debit to Expenses and a credit to Raw materials

False

True

14. At the end of 2020, the company purchased a machinery at the price of 2.700 $, transportation 300 $. The useful life of machinery is 3 years, and the company use the straight line depreciation method. The formula for annual depreciation is:

a)Depreciation expense = Accumulated depreciation of machinery 1.000

b)Accumulated depreciation of machinery = Depreciation expense 1.000

c)Depreciation expense = Accumulated depreciation of machinery 900

d)Accumulated depreciation of machinery = Depreciation expense 900

15. The journal entry to record the interest liability involves: a debit to interest liability and a credit to interest expense.

False

True

16. In November, a company acquired on cash raw materials for 2.400 $. In December it issued half of the raw materials on hand for production. Choose the correct accounting formula for consumption of raw material.

a)Raw material expense = Raw material 2.400

b)Raw material = Cash 2.400

c)Raw material = Suppliers 1.200

d)Raw material expense = Raw material 1.200

17. A company purchases of 200 units of merchandise on credit. The price of the supplier is 60 $ per unit. If the company buys more than 100 units of merchandise, the supplier offers a trade discount of 1.50 $ per unit. The transportation cost incurred amounts at 100 $. You are asked to choose the correct accounting formula for the transaction:

a)Merchandise = Cash 11.700 AND Transportation expense = Suppliers 100

b)Merchandise = Cash 11.800

c)Merchandise = Suppliers 11.700 AND Transportation expense = Suppliers 100

d)Merchandise = Suppliers 11.800

18. A Company decided to incorporate the statutory reserves in amount of 800 $ into the share capital by issuing new shares (one new for five old). Choose the correct accounting formula to register the increase in share capital.

a)Statutory reserves = Share capital 800

b)Share capital = Statutory reserves 800

c)Statutory reserves = Treasury stock 800

d)Treasury stock = Share capital 800

19. Company A provides services to company B at the price of 1.500 $ on cash. Choose the correct accounting formula for the transaction.

a)Cash = Services rendered 1.500

b)Services expense = Cash 1.500

c)Customer = Services rendered 1.500

d)Cash = Services expense 1.500

20. Accounts Payable is a contra account.

True

False

21. Which of the following items are examples of cash flows from investing activities?

a)cash payments to and on behalf of employees

b)cash receipts from royalties, fees, commissions and other revenue

c)dividends and interest paid

d)cash payments to acquire property, plant and equipment

22. The initial cost of land (cost of purchase) would not include property taxes for the current period.

True

False

23. An economic entity produces on May 5, 20 chairs at the conversion cost of 10 $ / piece, on May 8 it produces 30 chairs at the conversion cost of 11 $/ piece, on May 14 it produces 16 chairs at the cost of conversion of 11.5 $ / piece. On May 12, it sells 35 chairs at the price of 20 $ / piece. Using the LIFO method, choose the right answer to journalize the download of chairs sold:

a)Finish goods = Revenue associated with cost of production 380

b)Revenue associated with cost of production = Finish goods 380

c)Revenue associated with cost of production = Finish goods 374

d)Finish goods = Revenue associated with cost of production 374

24. The company incurred wages for production personnel of 2.500 $. Choose the correct accounting formula to register the wages.

a)Wages = Wages expense 2.500

b)Cash = Wages expense 2.500

c)Wages expense = Wages 2.500

d)Wages = Cash 2.500

25. Which of the following will cause owner's equity to decrease?

a)revenue

b)net income

c)net loss

d)liabilities

26. The Balance Sheet is the financial statement that reports the revenues and expenses.

True

False

27.

Under the accrual basis of accounting, revenues are reported in the accounting period when the:

a)cash is received

b)cash is paid

c)at the end of the financial year

d)service or goods have been delivered

28. The inventory cost flow assumption where the cost of the most recent purchase is matched first against sales revenues is:

a)last-in last-out (LIFO)

b)neither

c)weighted average cost (WAC)

d)first-in first-out (FIFO)