purchased for $960 on July 1‚ 20-1. On December 31‚ 20-1‚ it had an unexpired value of: a. $240. b. $480. c. $560. d. $400. e. none of the above. 2) The accountant did not prepare an entry to adjust the Supplies account at the end of the accounting period and‚ as a result: a. the Supplies account was overstated. b. the total expenses were understated. c. the net income was overstated. d. the owner’s equity was overstated. e. all of the above are true. 3) On the basis of the following
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A company’s fiscal year must correspond to the calendar year. T154. Accounting periods should be of equal length to facilitate comparison between periods. T155. When there is no direct connection between revenues and costs‚ the costs are systematically allocated among the periods benefitted. T156. Applying accrual accounting results in a more accurate measurement of profit for the period than does the cash basis of accounting. F157. Adjusting entries affect cash flows in the current period. T158
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Chapter 7 Accounting Information Systems Questions 1. What is the right side of an account called? 2. What is the left side of an account called? 3. An organizational scheme used to classify accounts as assets‚ liabilities‚ or owners’ equity is known as what? 4. What journal is used to record both the account(s) to be debited and the account(s) to be credited? 5. A collection of specific asset‚ liability and owners’ equity accounts in known as what? 6. What type
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building was $30 million and its tax basis was $20 million. At December 31‚ 2013‚ the carrying value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2013 was $45 million.On January 1‚ 2010‚ Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31‚ 2012‚ the carrying
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STATEMENTS d 3. Pro forma financial statements are: a. statements recapping the performance of a firm for the past five years. b. accounting statements filed with the Securities and Exchange Commission. c. accounting statements filed with the Internal Revenue Service. d. projected accounting statements based on a sales forecast. e. the most-recently compiled accounting statements of a firm. PLUG VARIABLE e 4. The designated source of external financing required to make a pro forma balance sheet
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Chapter 02 Reporting Intercorporate Interests Multiple Choice Questions On January 1‚ 2007‚ Rotor Corporation acquired 30 percent of Stator Company ’s stock for $150‚000. On the acquisition date‚ Stator reported net assets of $450‚000 valued at historical cost and $500‚000 stated at fair value. The difference was due to the increased value of buildings with a remaining life of 15 years. During 2007 and 2008 Stator reported net income of $25‚000 and $15‚000 and paid dividends of $10
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SOLUTIONS TO EXERCISES EXERCISE 4-1 BRISCOE COMPANY Worksheet For the Month Ended June 30‚ 2008 Account Titles Trial Balance Adjustments Adj. Trial Balance Income Statement Balance Sheet Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash 2‚320 2‚320 2‚320 Accounts Receivable 2‚440 2‚440 2‚440 Supplies 1‚880 1‚580 300 300 Accounts Payable 1‚120 1‚120 1‚120 Unearned Revenue 240 140 100 100 Common Stock 3‚600 3‚600 3‚600 Service Revenue 2‚400 140 2‚540 2‚540 Salaries Expense 560 280 840 840
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1. According to the cost allocation methods used in the company’s accounting system that are described in the Production Cost Report‚ if a company employs 100 PATs at a total labor cost of $15‚000‚000 (including wages‚ fringes‚ incentives‚ overtime‚ training‚ and severance expenses)‚ assembles and ships 800‚000 entry-level cameras and 200‚000 multi-featured cameras over the course of a year‚ has revenues of $100 million from sales of entry level cameras‚ and revenues of $150 million from the sale
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1.. A company earned $3‚960 in net income for October. Its net sales for October were $22‚000. Its profit margin is: 1.8%. 18%. 180%. 556%. $18‚040 2. On June 30 of the current calendar year‚ Apricot Co. paid $8‚200 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 for Apricot would include: A debit to an
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• Case 1-4 Generally Accepted Accounting Principles At the completion of the Darby Department Store audit‚ the president asks about the meaning of the phrase “in conformity with generally accepted accounting principles‚” which appears in your audit report on the management’s financial statements. He observes that the meaning of the phrase must include more than what he thinks of as “principles.” Required: a. Explain the meaning of the term accounting principles as used in the audit report
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