Multiple choice question 51 A small neighborhood barber shop that is operated by its owner would likely be organized as a Proprietorship.

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1 FINAL EXAM Financial accounting Multiple choice question 92 The best definition of assets is the Resources belonging to a company that have future benefit to the company. Collections of resources belonging to the company and the claims on these resources Owners investment in the business Cash owned by the company. Multiple choice question 98 Which of the following is not a liability? Unearned service revenue Account payable Accounts receivable Interest payable Multiple choice question 99 Which of the following financial statements is divided into major categories of operating, investing, and financing activities? The retained earnings statement. The statement of cash flows The balance sheet. The income statement. Multiple choice question 101 Ending retained earnings for a period is equal to beginning Retained earnings net income + dividends. Retained earnings + net income + dividends Retained earnings net income dividends. Retained earnings + net income dividends. Multiple choice question 47 Which of the following is not an advantage of the corporate form of business organization? Easy to transfer ownership Easy to raise funds. Favorable tax treatment. No personal liability. Multiple choice question 48 An advantage of the corporate form of business is that Its owner s personal resources are at stake. It has limited life. Its ownership is easily transferable via the sale of shares of stock. It is simple to establish

2 Multiple choice question 51 A small neighborhood barber shop that is operated by its owner would likely be organized as a Partnership. Corporation. Joint venture. Proprietorship. Multiple choice question 59 If services are rendered for cash, then Liabilities will decrease. Liabilities will increase Assets will increase. Stockholders equity will decrease. Multiple choice question 67 A revenue generally Increases assets and decreases stockholders equity. Increases assets and liabilities Leaves total assets unchanged Increases assets and stockholders equity. Multiple choice question 103 A revenue account Is increased by debits. Is decreased by credits. Has a normal balance of a debit Is increased by credits. Multiple choice question 106 Which accounts normally have debit balances? Assets, expense, and retained earnings Assets, liabilities, and dividends Assets, expenses, and dividends Assets, expenses, and revenues Multiple choice question 109 In recording an accounting transaction in a double-entry system The number of debit accounts must equal the number of credit accounts. The amount of the debits must equal the amount of the credits. There must only be two accounts affected by any transaction.

3 There must always be entries made on both sides of the accounting equation. Multiple choice question 157 The usual sequence of steps in the transaction recording process is Journalize, analyze, post to the ledger. Analyze, journalize, post to the ledger. Journalize, post to the ledger, analyze Post to the ledger, journalize, analyze Multiple choice question 59 Under the expense recognition principle expenses are recognized when They are billed by the supplier. They are paid The invoice is received. They contribute to the production of revenue Multiple choice question 61 The revenue recognition principle dictates that revenue should be recognized in the accounting records: When cash is received. When the performance obligation is satisfied. At the end of the month. In the period that income taxes are paid. Multiple choice question 53 Merchandising companies that sell to retailers are known as Wholesalers. Service firms. Brokers. Corporations. Multiple choice question 57 Gross profit equals the difference between Sales revenue and cost of goods sold. Sales revenue and operating expenses. Sales revenue and cost of goods sold plus operating expenses. Net income and operating expenses. Multiple choice question 59 Net income will result if gross profit exceeds Cost of goods sold. Purchases. Cost of goods sold plus operating expenses Operating expenses Multiple choice question 105 Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account? Inventory Freight-in

4 Freight-out Freight expense Multiple choice question 162 Financial information is presented below: Operating expenses $ Sales revenue Cost of goods sold The profit margin ratio would be Multiple choice question 164 Financial information is presented below: Operating expenses $ Sales returns and allowances 9000 Sales discounts 4000 Sales revenue Cost of goods sold The gross profit rate would be Multiple choice question 167 Financial information is presented below: Operating expenses $ Sales returns and allowances 3000 Sales discounts 6000 Sales revenue Cost of goods sold Gross profit would be $ $ $ $ Multiple choice question 65 The lifo inventory method assumes that the cost of the latest units purchased are Not allocated to cost of goods sold or ending inventory.

5 The first to be allocated to ending inventory. The last to be allocated to cost of goods sold. The first to be allocated to cost of goods sold Multiple choice question 99 Which of the following statements is correct with respect to inventories? The fifo method assumes that the costs of the earliest goods acquired are the last to be sold. Under fifo, the ending inventory is based on the latest units purchased Fifo seldom coincides with the actual physical flow of inventory It is generally good business management to sell the most recently acquired goods first. Multiple choice question 44 All of the following are examples of internal control procedures except Using prenumbered documents. Reconciling the bank statement. Insistence that employees take vacations. Customer satisfaction surveys. Multiple choice question 45 Each of the following is a feature of internal control except Separation of duties. Recording of all transactions An extensive marketing plan Bonding of employees Multiple choice question 123 For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation? Deposit of $500 recorded by the bank as $50. A returned $200 check recorded by the bank as $20. Check written for $59, but recorded by the company as $95. Check written for $53, but recorded by the company as $35. Multiple choice question 119 A check written by the company for $117 is incorrectly recorded by a company as $171. On the bank reconciliation, the $54 error should be Added to the balance per books. Deducted from the balance per bank. Deducted from the balance per books. Added to the balance per bank. Multiple choice question 162 The following information was available for kingbird, inc. At december 31, 2017: beginning inventory $70000; ending inventory $108000; cost of goods sold $644000; and sales $ Kingbird inventory turnover ratio (rounded) in 2017 was 6.0 times.

6 10.0 times. 9.2 times 7.2 times. Multiple choice question 163 The following information was available for marigold corp. At december 31, 2017: beginning inventory $87000; ending inventory $122000; cost of goods sold $632000; and sales $ Marigold days in inventory (rounded) in 2017 was (round intermediate calculation to 1 decimal place, e.g. 1.2.) 44.0 days days days days.

CENTURY 21 ACCOUNTING, 9e General Journal Chapter Objectives

CENTURY 21 ACCOUNTING, 9e General Journal Chapter Objectives Chapter 1 Starting A Proprietorship: Changes that Affect the Accounting Equation After studying Chapter 1, you will be able to: 1. Define accounting