Question

1 of25

Smart Art is a new establishment. During the first year, the company had credit sales of $40,000 and collections of credit sales of $36,000. One account for $650 was written off. The company decided to use the percent-of-sales method to account for bad debts expense and decided to use a factor of 2% for their year-end adjustment of bad debts expense. At the end of the year, what is the ending balance in Accounts Receivable?

$4,000

$3,600

$3,350

$3,200

Question

2 of25

A truck costs $300,000, and is expected to run 100,000 miles during its 5-year life. Residual value is expected to be zero because the truck was used when acquired. If the truck runs 24,000 miles the first year, how much depreciation should the company record under the units-of-production method?

$85,000

$24,000

$72,000

$47,000

Question

3 of25

The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debt expense. The company's management estimates that 2% of net credit sales will be uncollectible for the year 2015. Net credit sales for the year amounted to $250,000. What will be the balance of the Allowance for Bad Debts reported on the balance sheet at December 31, 2015?

$7,275

$3,075

$7,000

$5,285

Question

4 of25

Patricia Event Planning Service collects fees from their customers in advance. On January 1, 2015, the balance of the Unearned Revenue account was $6,000 (Cr.). During January and February, Patricia collected $3,000 and $1,000 as advance fees. During the two-month period, she rendered services of $6,500. What is the balance in Unearned Revenue at the end of February?

Debit balance of $6,000

Credit balance of $6,000

Debit balance of $3,500

Credit balance of $3,500

Question

5 of25

Sarah's Net Income for the year is $25,000. The withdrawals Sarah made during the year amounted to $30,000. Which of the following statements is true of the effect of these transactions on Sarah, Capital?

Sarah, Capital account decreases by $25,000.

Sarah, Capital account decreases by $5,000.

Sarah, Capital account increases by $30,000.

Sarah, Capital account increases by $25,000.

Question

6 of25

The data of Franklin Brothers Corp. for two years are given below:

	2014	2015
Cash and cash equivalents	$5,400	$12,500
Total current liabilities	24,000	30,000

Based on the above information, which of the following statements is true?

Cash ratio has increased from 0.02 in 2014 to 0.03 in 2015.

Cash ratio has increased from 0.05 in 2014 to 0.08 in 2015.

Cash ratio has increased from 0.417 in 2014 to 0.225 in 2015.

Cash ratio has increased from 0.225 in 2014 to 0.417 in 2015.

Question

7 of25

Multi Corporation sold merchandise for $4,450 to Susan on credit. The cost of goods sold was $1,185. Assuming that the firm is following a perpetual inventory system, it will record $4,450 in the

general journal.

Accounts Receivable DR, Sales Revenue CR column of the sales journal.

Merchandise Inventory DR column of the purchases journal.

Accounts Receivable CR column of cash receipts journal.

Question

8 of25

Nobells Inc. has acquired a property that included both land and a building for $500,000. The company hired an appraiser who has determined that the market value of the land is $300,000 and that of the building is $400,000. At what amount should the company record the cost of land?

$147,368

$52,632

$250,000

$214,286

Question

9 of25

Ronald Company had the following balances and transactions during 2014.

Beginning merchandise inventory	10 units at $95
March 10	Sold 8 units
June 10	Purchased 20 units at $92
October 30	Sold 15 units

What is the amount of the company's Merchandise Inventory, as disclosed in the December 31, 2014 balance sheet as per the periodic weighted-average costing method?

$186

$140

$398

$651

Question

10 of25

Rocco worked 43 hours at his job during the first week of March, 2015. He is paid $14.50 per hour and receives overtime at the rate of time-and-one-half for hours worked over 40. What is Rocco's gross pay for the week?

$623.50

$628.00

$645.25

$935.25

Question

11 of25

A company has $130,000 in current assets, $500,000 in total assets, $90,000 in current liabilities, and $110,000 in total liabilities. The company has a current ratio of

1.44.

1.48.

1.73.

1.18.

Question

12 of25

A company's cash ledger shows an ending balance of $4,000. Reconciling items included a bookkeeper error of $100 (a $500 check recorded as $600), two outstanding checks totaling $820, a service charge of $25, a deposit in transit of $280, and interest revenue of $31. What is the adjusted book balance?

$3,894

$3,460

$4,106

$4,540

Question

13 of25

The following are the current month's balances for Toys Galore:

Accounts Payable	$8,000
Revenue	10,000
Cash	5,000
Expenses	1,750
Furniture	12,000
Accounts Receivable	14,000
Jones, Capital	8,250
Notes Payable	6,500

What is the net income for Toys Galore for the current month?

$10,000

$8,250

$11,750

$15,000

Question

14 of25

Acer Investments plans to develop a shopping center. In the first quarter they spent the following amounts:

Acquisition of land	$15,000
Surveys and legal fees	600
Land clearing	200
Fencing	1,000
Install lighting and signage	860

What amount should be recorded as the cost of land in the books of the company?

$16,800

$15,800

$16,660

$16,200

Question

15 of25

A company has four vendors, and the accounts payable subsidiary ledger shows the following balances:

Alpha	$275,821
Beta	143,474
Gamma	78,943
Delta	34,187

Calculate the accounts payable balance in the general ledger.

$419,295

$532,425

$275,821

$256,604

Question

16 of25

Bike World offers warranties on all their bikes. They estimate warranty expense at 3.5% of sales. At the beginning of 2013, the Estimated Warranty Payable account had a credit balance of $1,200. During the year, Bike World had $295,000 of sales and had to pay out $5,300 in warranty payments. How much Warranty Expense will be reported on the 2013 income statement?

$6,225

$6,500

$9,125

$10,325

Question

17 of25

Refer to the following trial balance.

	Debit	Credit
Cash	$15,000
Accounts Receivable	42,000
Merchandise Inventory	60,000
Supplies	15,000
Land	300,000
Accounts Payable		$3,000
Notes Payable		25,000
Smith, Capital		326,000
Smith, Withdrawals	3,000
Sales Revenues		480,000
Sales Returns and Allowances	6,000
Sales Discounts	9,000
Cost of Goods Sold	240,000
Salaries Expense	15,000
Utility Expense	69,000
Rent Expense	54,000
Interest Expense	6,000
Totals	$834,000	$834,000

How much are net sales revenues?

$465,000

$480,000

$102,000

$96,000

Question

18 of25

The following information is from the 2015 records of Armand Camera Shop:

Accounts Receivable, December 31, 2015	$40,000 (debit)
Allowance for Bad Debts, December 31, 2015 prior to adjustment	1,500 (debit)
Net credit sales for 2015	175,000
Accounts written off as uncollectible during 2015	15,000
Cash sales during 2015	27,000

Bad debts expense is estimated by the percent-of-sales method. The management estimates that 3% of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2015.

$5,250

$3,450

$2,250

$2,850

Question

19 of25

Berkley's gross pay for the month is $5,400. His deduction for federal income tax is based on a rate of 18%. He has no voluntary deductions. His yearly pay is under the limit for OASDI. What is the amount of Berkley's net pay? (Assume a FICAOASDI Tax of 4.2% and FICAMedicare Tax of 1.45%.)

$4,122.90

$5,400.00

$5,094.90

$4,428.00

Question

20 of25

Assume that a company has only four customers: A, B, C, and D. The accounts receivable balance in the general ledger is $7,983, and the accounts receivable subsidiary ledger of customers A, C, and D has $1,246, $2,596, and $3,240 respectively. Calculate the amount in the accounts receivable subsidiary ledger account of customer B.

$7,082

$2,147

$1,391

$901

Question

21 of25

A $40,000, four-month, 6.5% note payable was issued on October 1, 2015. Which of the following would be included in the journal entry required on the note's maturity date by the borrower?

A credit to Note payable for $40,867

A credit to Cash for $40,000

A debit to Interest expense for $217

A debit to Interest payable for $217

Question

22 of25

The following details are provided by Blue Bell Merchandisers.

Net Sales	$198,000
Purchases	92,000
Purchases Returns and Allowances	1,800
Purchases Discounts	1,250
Freight In	1,590
Beginning Merchandise Inventory	63,000
Ending Merchandise Inventory	37,000

Calculate the amount of net purchases.

$151,950

$87,360

$88,950

$106,000

Question

23 of25

A company uses weighted-average method of inventory valuation under the periodic inventory system. The company began the year with a zero inventory balance. They had the following transactions during the year.

1. Purchased 65 units at $5 per unit
2. Purchased 100 units at $5 per unit
3. Sold 80 units at a price of $12 per unit
4. Purchased 55 units at $6 per unit
5. Sold 80 units at a price of $12.75 per unit

At the end of the year, they counted the inventory and found 60 units remaining. Calculate the Cost of Goods Sold for the year. (Round your intermediate calculations to two decimal places.)

$420

$315

$577

$840

Question

24 of25

The following information is available for Jack's Unlimited Company for the current month.

Book balance end of the month	$6,875
Outstanding checks	655
Deposits in transit	3,500
Service charges	85
Interest revenue	35

What is the adjusted book balance on the bank reconciliation?

$9,600

$7,480

$6,755

$6,825

Question

25 of25

The following information is needed to reconcile the cash balance for Fire Steel Inc.

• A deposit of $5,800 is in transit.
• Outstanding checks total $1,500.
• The book balance is $6,800 at February 28, 2013.
• The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent.
• The bank balance at February 28, 2013 was $18,000.
• A deposit of $400 was credited by the bank for $4,000.
• A customer's check for $3,700 was returned for nonsufficient funds.
• The bank service charge is $60.

What was the adjusted book balance?

$18,720

$18,060

$18,700

$18,820