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Three accounting issues associated with accounts receivable are

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Question 1  
Description: Question 1 text

Three accounting issues associated with accounts receivable are
Answer
Description: Question 1 answers
A.
depreciating, returns, and valuing.
B.
recognizing, valuing, and disposing.
C.
depreciating, valuing, and collecting.
D.
accrual, bad debts, and disposing.
 Question 2
Description: Question 2 text

The percentage of receivables basis for estimating uncollectible accounts emphasizes
Answer
Description: Question 2 answers
A.
the relationship between sales and accounts receivable.
B.
the relationship between accounts receivable and bad debts expense.
C.
cash realizable value.
D.
income statement relationships.
 Question 3
Description: Question 3 text

Deborah Company's account balances at December 31 for Accounts Receivable and Allowance for Doubtful Accounts were $2,100,000 and $35,000 (Cr.), respectively. An aging of accounts receivable indicated that $126,000 are expected to become uncollectible. The amount of the adjusting entry for bad debts at December 31 is
Answer
Description: Question 3 answers
A.
$210,000.
B.
$126,000.
C.
$91,000. 
D.
$161,000.


Question 4
Description: Question 4 text

Jeff Retailers accepted $75,000 of Citibank Visa credit card charges for merchandise sold on July 1. Citibank charges 4% for its credit card use. The entry to record this transaction by Jeff Retailers will include a credit to Sales of $75,000 and a debit(s) to
Answer
Description: Question 4 answers
A.
Accounts Receivable $72,000 and Service Charge Expense $3,000.
B.
Accounts Receivable $75,000.
C.
Cash $72,000 and Interest Expense $3,000.
D.
Cash $72,000 and Service Charge Expense $3,000.
 Question 5
Description: Question 5 text

Prepare journal entries to record the following transactions entered into by Valente Company:
2012


June
1

Received a $10,000, 12%, 1-year note from Doreen Borke as full payment on her account.

Nov.
1

Sold merchandise on account to Lyleen, Inc. for $12,000, terms 2/10, n/30.

Nov.
5

Lyleen, Inc. returned merchandise worth $500.

Nov.
9

Received payment in full from Lyleen, Inc.

Dec.
31

Accrued interest on Borke's note.


2013


June
1

Doreen Borke honored her promissory note by sending the face amount plus interest. No interest has been accrued in 2013.





 Question 6
Description: Question 6 text

Depreciation is the process of allocating the cost of a plant asset over its service life in
Answer
Description: Question 6 answers
A.
an equal and equitable manner.
B.
an accelerated and accurate manner.
C.
a systematic and rational manner.
D.
a conservative market-based manner.
 Question 7
Description: Question 7 text

The book value of an asset is equal to the
Answer
Description: Question 7 answers
A.
replacement cost of the asset.
B.
asset's cost less accumulated depreciation.
C.
blue book value relied on by secondary markets.
D.
asset's fair value less its historical cost.
 Question 8
Description: Question 8 text

A machine with a cost of $240,000 has an estimated salvage value of $15,000 and an estimated useful life of 5 years or 15,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?
Answer
A.
$80,000
B.
$65,000
C.
$45,000
D.
$75,000Description: Question 8 answers

 Question 9
Description: Question 9 text

Ron's Quik Shop bought machinery for $50,000 on January 1, 2012. Ron estimated the useful life to be 5 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2013, Ron decides that the business will use the machinery for a total of 6 years. What is the revised depreciation expense for 2013?
Answer
Description: Question 9 answers
A.
$4,000
B.
$8,000
C.
$6,667
D.
$10,000
 Question 10
Description: Question 10 text

On July 1, 2012, Hale Kennels sells equipment for $110,000. The equipment originally cost $300,000, had an estimated 5-year life and an expected salvage value of $50,000. The accumulated depreciation account had a balance of $175,000 on January 1, 2012, using the straight-line method. The gain or loss on disposal is
Answer
Description: Question 10 answers
A.
$15,000 gain.
B.
$10,000 loss.
C.
$15,000 loss.
D.
$10,000 gain

Question 11
Description: Question 11 text

A truck that cost $48,000 and on which $40,000 of accumulated depreciation has been recorded was disposed of for $12,000 cash. The entry to record this event would include a
Answer
Description: Question 11 answers
A.
credit to Accumulated Depreciation for $40,000.
B.
loss of $4,000.
C.
gain of $4,000.
D.
credit to the Truck account for $8,000.
 Question 12
Description: Question 12 text

On July 4, 2012, Wyoming Mining Company purchased the mineral rights to a granite deposit for $1,200,000. It is estimated that the recoverable granite will be 400,000 tons. During 2012, 100,000 tons of granite was extracted and 60,000 tons were sold. The amount of the Depletion Expense recognized for 2012 would be
Answer
Description: Question 12 answers
A.
$150,000.
B.
$180,000. 
C.
$300,000.
D.
$90,000.
 Question 13
Description: Question 13 text

A plant asset acquired on October 1, 2012, at a cost of $400,000 has an estimated useful life of 10 years. The salvage value is estimated to be $40,000 at the end of the asset's useful life.

Instructions
Determine the depreciation expense for the first two years using:
(a)
the straight-line method.
(b)
the double-declining-balance method.




 Question 14
Description: Question 14 text

A current liability is a debt that can reasonably be expected to be paid
Answer
Description: Question 14 answers
A.
out of currently recognized revenues.
B.
between 6 months and 18 months.
C.
out of cash currently on hand.
D.
within one year or the operating cycle, whichever is longer.
 Question 15
Description: Question 15 text

Sales taxes collected by a retailer are recorded by
Answer
Description: Question 15 answers
A.
debiting Sales Taxes Payable.
B.
debiting Sales Taxes Expense.
C.
crediting Sales Taxes Revenue.
D.
crediting Sales Taxes Payable.
 Question 16
Description: Question 16 text

The amount of income taxes withheld from employees is dependent on each of the following except the
Answer
Description: Question 16 answers
A.
employee's gross earnings.
B.
length of the pay period.
C.
employee's net pay.
D.
number of allowances claimed by the employee.
 Question 17
Description: Question 17 text

Julie's Boutique has total receipts for the month of $30,660 including sales taxes. If the sales tax rate is 5%, what are Julie's sales for the month?
Answer
Description: Question 17 answers
A.
$29,127
B.
$29,200 
C.
$32,193
D.
It cannot be determined.
 Question 18
Description: Question 18 text

Reliable Insurance Company collected a premium of $30,000 for a 1-year insurance policy on May 1. What amount should Reliable report as a current liability for Unearned Insurance Revene at December 31?
Answer
Description: Question 18 answers
A.
$10,000. 
 
B.
$20,000.
C.
$30,000.
D.
$0.
 Question 19
Description: Question 19 text

Shaw Company sells 3,000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $50 per unit. In the year of sale, warranty contracts are honored on 60 units for a total cost of $3,000. What amount should Shaw Company accrue on December 31 for estimated warranty costs?
Answer
Description: Question 19 answers
A.
$4,500 
B.
$1,500
C.
$3,000
D.
$22,500
 Question 20
Description: Question 20 text

Gary Dittman, an employee of Hopkins Company, has gross earnings for the month of October of $6,000. FICA taxes are 8% of gross earnings, federal income taxes amount to $952 for the month, state income taxes are 2% of gross earnings, and authorizes voluntary deductions of $15 per month to the United Way. What is the net pay for Gary?
Answer
Description: Question 20 answers
A.
$4,452
B.
$4,448
C.
$4,442
D.
$4,433
 Question 21
Description: Question 21 text

The individual assets invested by a partner in a partnership
Answer
Description: Question 21 answers
A.
determine that partner's share of net income or loss for the year.
B.
determine the scope of authority of that partner.
C.
are jointly owned by all partners.
D.
revert back to that partner if the partnership liquidates.
 Question 22
Description: Question 22 text

In a partnership, mutual agency means
Answer
Description: Question 22 answers
A.
each partner acts on his own behalf when engaging in partnership business.
B.
the act of any partner is binding on all other partners, only if partners act within their scope of authority.
C.
an act by a partner is judged as binding on other partners depending on whether the act appears to be appropriate for the partnership.
D.
that partners must pay taxes on a mutual or combined basis.

 Question 23
Description: Question 23 text

Bob is investing in a partnership with Andy. Bob contributes as part of his initial investment, Accounts Receivable of $120,000; an Allowance for Doubtful Accounts of $18,000; and $12,000 cash. The entry that the partnership makes to record Bob's initial contribution includes a
Answer
Description: Question 23 answers
A.
credit to Bob, Capital for $132,000.
B.
debit to Accounts Receivable for $102,000.
C.
debit to Allowance for Doubtful Accounts for $18,000.
D.
credit to Bob, Capital for $114,000. 
 Question 24
Description: Question 24 text

Partners Acer and Barr have capital balances in a partnership of $80,000 and $120,000, respectively. They agree to share profits and losses as follows:

Acer
Barr

As salaries
$20,000
$24,000
As interest on capital at the beginning of the year
10%
10%
Remaining profits or losses
50%
50%

If income for the year was $100,000, what will be the distribution of income to Barr?
Answer
Description: Question 24 answers
A.
$40,000
B.
$20,000
C.
$54,000
D.
$46,000

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