Review Test Submission: Mid-Term Test 1 - Trial

23/05/13 2:16 PM

Financial Accounting - Dr. Sudhakar Balachandran / Prof. Ram T.S. Ramakrishnan - PP - Term - 1

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Review Test Submission: Mid-Term Test 1 - Trial

Review Test Submission: Mid-Term Test 1 - Trial

User Submitted Status Score Instructions

amanabbi abbi 5/23/13 2:19 PM Completed 100 out of 160 points

Question 1

0 out of 10 points

Failure to record amounts earned for services provided to customers but not yet paid results in which of the following
Selected Answer: Correct Answer:

No effect on total assets Total assets being understated

0 out of 10 points

Question 2

Tracy, Inc. adjusts its books each month but closes its books at the end of the year. The trial balance at July 31 before adjustments is as follows: Debit Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation - Equipment Unearned Service Revenue Capital Stock Retained Earnings Dividends Service Revenue Wages and Salaries Expense Utilities Expense Rent Expense 7,800 380 1,300 $64,000 $64,000 1,560 16,510 $12,920 9,620 1,300 3,120 26,000 $10,400 6,500 7,190 23,400 Credit

According to contracts, $4,810 of Unearned Service Revenue has been earned in July. Which of the following is the correct amount of Service Revenue to be reported in the July income statement?
Selected Answer: Correct Answer:

$16,510 $21,320
10 out of 10 points

Question 3

Masters Company borrowed on a one-year, 10%, $150,000 note on May 1, with interest and principal to be paid at maturity. How much interest payable will be reported on Masters balance sheet as of November 30 of the same year?
Selected Answer: Correct Answer:

$8,750 $8,750
10 out of 10 points

Question 4

What happens to the accounting equation when the adjustment that recognizes accrued interest revenue is recorded?
Selected Answer: Correct Answer:

Assets increase and stockholders equity increases Assets increase and stockholders equity increases
10 out of 10 points

Question 5

Which one of the following types of inventory accounts would be used by a wholesaler or retailer?
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Review Test Submission: Mid-Term Test 1 - Trial

23/05/13 2:16 PM

Which one of the following types of inventory accounts would be used by a wholesaler or retailer?
Selected Answer: Correct Answer:

Merchandise inventory Merchandise inventory

0 out of 10 points

Question 6

Chens Department Store is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: Sales Purchases Inventory (beginning) Inventory (ending) Purchase returns and allowances Purchase discounts Transportation-in Sales discounts Sales returns and allowances $175,000 90,000 23,000 17,000 3,000 7,000 4,000 8,000 5,000

Calculate Chens cost of goods purchased

Selected Answer: Correct Answer: Response Feedback:

$90,000 $84,000 $90,000 (Purchases) + $4,000 (Transportation-in) - $3,000 (Purchase returns and allowances) $7,000 (Purchase discounts) = $84,000
10 out of 10 points

Question 7

The following is from Silverstein Inc.s 2014 income statement. Purchases Transportation-In Inventory, January 1, 2014 Inventory, December 31, 2014 Purchase Returns and Allowances $182,000 11,000 26,500 28,800 8,400

How much will Silverstein report as its cost of goods sold in its 2014 income statement?
Selected Answer: Correct Answer:

$182,300 $182,300
10 out of 10 points

Question 8

Which inventory costing method results in the highest inventory balance during a period of rising prices?
Selected Answer: Correct Answer:

FIFO FIFO
0 out of 10 points

Question 9

Hedron Corp. invested cash in a 6-month certificate of deposit (CD) on November 1, 2014. If Hedron Corp. has an accounting period that ends on December 31, 2014, when should Hedron recognize interest revenue from the CD?
Selected Answer: Correct Answer:

On December 31, 2014 only Both December 31, 2014 and May 31, 2013

Question 10

Which one of the following statements is true?

Selected Answer: Correct Answer:

10 out of 10 points

The balance in the control account, Accounts Receivable, should be equal to the sum of the balances in the subsidiary ledger for accounts receivable. The balance in the control account, Accounts Receivable, should be equal to the sum of the balances in the subsidiary ledger for accounts receivable.
0 out of 10 points

Question 11
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Review Test Submission: Mid-Term Test 1 - Trial

23/05/13 2:16 PM
0 out of 10 points

Question 11

The following information was presented in the balance sheet of Gloria Company as of December 31, 2014: Trade accounts receivable, net of allowance for uncollectibles of $100,000 $1,600,000

Which one of the following statements is true?

Selected Answer: Correct Answer:

The balance in the Accounts Receivable account in Glorias general ledger is $1,600,000 The net realizable value of Glorias accounts receivable is $1,600,000
0 out of 10 points

Question 12

The comparative balance sheets of Farmore Corp. for 2014 and 2013 indicate that short-term trade notes receivable increased from $5,000 in 2013 to $75,000 in 2014. How will this change be reported on Farmores statement of cash flows (Farmore uses the indirect method)?
Selected Answer: Correct Answer:

It will be reported as a cash outflow in the investing activities section. It will be reported as a deduction from net income in the operating activities section.
10 out of 10 points

Question 13

Royal Company purchased a dump truck at the beginning of 2012 at a cost of $50,000. The truck had an estimated life of 5 years and an estimated residual value of $20,000. On January 1, 2014, the company made major repairs of $30,000 to the truck that extended the life 3 years. Thus, starting with 2014, the truck has a remaining life of 5 years and a new salvage value of $8,000. Royal uses the straight-line depreciation method When calculating depreciation for 2014, Royal should
Selected Answer: Correct Answer:

add the $30,000 to the book value at December 31, 2013 and then allocate the revised basis over the remaining adjusted useful life of 5 years. add the $30,000 to the book value at December 31, 2013 and then allocate the revised basis over the remaining adjusted useful life of 5 years.
10 out of 10 points

Question 14

A company should choose a depreciation method that

Selected Answer: Correct Answer:

best allocates the original cost of the asset to the periods benefited by the use of the asset. best allocates the original cost of the asset to the periods benefited by the use of the asset.
10 out of 10 points

Question 15

Depreciation is
Selected Answer: Correct Answer:

an effort to achieve proper matching of the cost of operating assets. an effort to achieve proper matching of the cost of operating assets.
10 out of 10 points

Question 16

Grover, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2013 and was used 2,700 hours in 2013 and 2,600 hours in 2014. If Grover uses the double-declining-balance depreciation method, what amount is the depreciation expense for 2014?
Selected Answer: Correct Answer:

$15,000 $15,000

Thursday, May 23, 2013 2:19:19 PM IST

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