I have a total of 100 questions and am unsure about my answers to these ones
3. Margaret is a customer of Tammy Company. The company wrote off her account of $1,200 on August
15. On October 12, she sent in a payment of $560. What will Tammy Company record first to reinstate
her account?
A. Debit Uncollectible Accounts Expense; credit Accounts Receivable/Margaret.
B. Debit Cash; credit Accounts Receivable/Margaret.
C. Debit Allowance for Doubtful Accounts; credit Accounts Receivable/Margaret.
D. Debit Accounts Receivable/Margaret; credit Allowance for Doubtful Accounts.
I said B
12. Research and development costs (R&D) are generally
A. listed as "long-term assets" on the balance sheet.
B. expensed and become part of the income statement.
C. listed as "other intangibles" on the balance sheet.
D. listed as "current assets" on the balance sheet.
I said A
18. Jewell Company has current assets of $56,000; long-term assets of $135,000; current liabilities of
$44,000; and long-term liabilities of $90,000. Jewell Company's debt ratio is
A. 78.6%.
B. 239.3%.
C. 127.3%.
D. 70.2%.
I said D
24. Which marketable securities are reported at cost on the balance sheet date?
A. Trading securities
B. Trading and held-to-maturity securities
C. Available-for-sale securities
D. Held-to-maturity securities
I said A
27. By not accruing warranty expense,
A. reported expenses will be understated, and net income will be understated.
B. reported expenses will be overstated, and reported liabilities will be understated.
C. reported liabilities will be overstated, and net income will be understated.
D. reported liabilities will be understated, and net income will be overstated.
I said A
30. Which of the following marketable securities are reported at market value on the balance sheet date?
A. Available-for-sale and trading securities
B. Held-to-maturities securities
C. Trading securities
D. Available-for-sale securities
I said D
42. Cash equivalents are
A. not liquid and carry little risk.
B. not liquid and carry high risk.
C. very liquid and carry high risk.
D. very liquid and carry little risk.
I said B
45. Tammy Industries inadvertently debited a $5,000 betterment as an ordinary expense. Which of the
following will occur as a result of this mistake?
A. The asset will be understated by $5,000.
B. The asset will be overstated by $5,000.
C. Net income will be overstated by $5,000.
D. Retained earnings will be overstated by $5,000.
I said C
52. Which of the following would not be a liability according to FASB's definition of a liability?
A. A note payable with no specified maturity date
B. The signing of a three-year employment contract at a fixed annual salary
C. An obligation that's estimated in amount
D. An obligation to provide goods or services in the future
I said A
58. Nick Company has cash of $33,000; net accounts receivable of $41,000; short-term investments of
$15,000; and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term
liabilities. The quick ratio for Nick Company is
A. 3.30.
B. 2.97.
C. 1.78.
D. 3.80.
I said B
61. Use the _______ principle to estimate warranty liabilities.
A. conservatism
B. objectivity
C. matching
D. entity
I said D
67. Which of the following would be considered a contingent liability?
A. Mortgage obligation
B. Sales tax obligation
C. Pending legal action
D. Accounts payable obligation
I said D
68. A repair that extends the useful life of an asset would be considered a/an
A. ordinary repair.
B. capital expense.
C. betterment.
D. extraordinary repair.
I said B
76. A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $500. The
journal entry to record this transaction is
A. debit Cash for $500, debit Truck for $50,000, debit Loss on Disposal for $5,500, and credit Accumulated Depreciation—
Truck for $56,000.
B. debit Loss on Disposal $6,000, debit Accumulated Depreciation—Truck for $50,000, and credit Truck for $56,000.
C. debit Cash for $500, debit Accumulated Depreciation—Truck for $50,000, debit Loss on Disposal for $5,500, and credit
Truck for $56,000.
D. debit Cash for $500, debit Loss on Disposal for $55,500, and credit Truck for $56,000.
I said B
81. Brandon Company completed an aging of its accounts receivable and came up with an estimated
amount of $6,342. The credit sales for the period are $85,000. The balance in the allowance for doubtful
accounts is a debit of $817. If Brandon uses 5% of credit sales as its estimating uncollectible accounts, how
much will the credit be to the allowance for doubtful accounts if Brandon uses the percent of credit sales as its method of estimating uncollectible accounts?
A. $4,250
B. $7,159
C. $5,525
D. $5,067
I said A
90. Mackey Company has a five-year mortgage for $100,000. In the first year of the mortgage, Mackey
will report this liability as a
A. long-term liability of $100,000.
B. current liability of $100,000.
C. current liability of $80,000 and a long-term liability of $20,000.
D. current liability of $20,000 and a long-term liability of $80,000.
I said D
95. Ryan Corporation made a basket purchase of three items. Item A was appraised at $35,000; item B
was appraised at $55,000; and item C was appraised at $60,000. The purchase price was $125,000. The
amount at which item C should be recorded (rounded to the nearest dollar) is
End of exam
A. $72,000.
B. $29,167.
C. $83,300.
D. $50,000.
I said B
98. Meranda Corporation purchases a machine for $125,000. It has an estimated salvage value of $10,000
and is expected to produce 50,000 units in its lifetime. During the first year of operation, it produced
14,500 units. To the nearest dollar, the depreciation for the first year under the units of production method
will be
A. $35,500.
B. $33,350.
C. $36,250.
D. $31,250.
I said D
99. Which of the following is not a benefit to extending credit to customers?
A. Increased revenues
B. Bad-debt expenses
C. Increased profits
D. Wider range of customers
3 answers
A. 47304
B. 39230
C. 43267
D. 43217
3 answers