strayer acc100 week 2 ch 4 and 5 quiz

Question 1

The income statement for the year 2014 of Fugazi Co. contains the following information:

Revenues $70,000

Expenses:

Salaries and Wages Expense $45,000

Rent Expense 12,000

Advertising Expense 10,000

Supplies Expense 6,000

Utilities Expense 2,500

Insurance Expense 2,000

Total expenses 77,500

Net income (loss) ($7,500)

At January 1, 2014, Fugazi reported owner’s equity of $50,000. Owner drawings for the year totalled $10,000. At December 31, 2014, the company will report owner’s equity of

$17,500.

$40,000.

$32,500.

$42,500.

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Question 2

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2014:

Accounts payable $ 18,000

Accounts receivable 11,000

Accumulated depreciation – equipment 28,000

Advertising expense 21,000

Cash 15,000

Owner’s capital (1/1/14) 102,000

Owner’s drawings 14,000

Depreciation expense 12,000

Insurance expense 3,000

Note payable, due 6/30/15 70,000

Prepaid insurance (12-month policy) 6,000

Rent expense 17,000

Salaries and wages expense 32,000

Service revenue 133,000

Supplies 4,000

Supplies expense 6,000

Equipment 210,000

The current assets should be listed on Postal Service’s balance sheet in the following order:

cash, prepaid insurance, supplies, accounts receivable.

cash, accounts receivable, prepaid insurance, supplies.

equipment, supplies, prepaid insurance, accounts receivable, cash.

cash, accounts receivable, prepaid insurance, equipment.

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Question 3

Jawbreaker Company paid $940 on account to a creditor. The transaction was erroneously recorded as a debit to Cash of $490 and a credit to Accounts Receivable, $490. The correcting entry is

Accounts Receivable........................................................................... 490

Cash............................................................................................... 490

Accounts Payable............................................................................... 940

Cash............................................................................................... 940

Accounts Receivable........................................................................... 490

Accounts Payable............................................................................. 490

Accounts Receivable........................................................................... 490

Accounts Payable............................................................................... 940

Cash............................................................................................... 1,430

5

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CANCEL

Question 4

These are selected account balances on December 31, 2014.

Land (location of the corporation’s office building) $100,000

Land (held for future use) 150,000

Corporate Office Building 700,000

Inventory 200,000

Equipment 450,000

Office Furniture 150,000

Accumulated Depreciation 425,000

What is the total amount of property, plant, and equipment that will appear on the balance sheet?

$975,000

$1,175,000

$1,400,000

$1,125,000

CANCEL

Question 5

The income statement for the month of June, 2014 of Camera Obscura Enterprises contains the following information:

Revenues $7,000

Expenses:

Salaries and Wages Expense $3,000

Rent Expense 1,500

Advertising Expense 800

Supplies Expense 300

Insurance Expense 100

Total expenses 5,700

Net income $1,300

The entry to close the expense accounts includes a

credit to Income Summary for $5,700.

credit to Rent Expense for $1,500.

debit to Salaries and Wages Expense for $3,000.

debit to Income Summary for $1,300.

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Points Earned: 5

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uestion 6

After closing entries are posted, the balance in the owner's capital account in the ledger will be equal to

the amount of the owner's capital reported on the balance sheet.

the net income for the period.

zero.

the beginning owner's capital reported on the owner's equity statement.

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Question 7

A current asset is

an asset which is currently being used to produce a product or service.

usually found as a separate classification in the income statement.

an asset that a company expects to convert to cash or use up within one year.

the last asset purchased by a business.

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Question 8

Equipment is classified in the balance sheet as

a long-term investment.

a current asset.

property, plant, and equipment.

an intangible asset.

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Question 9

Current liabilities

are obligations that the company is to pay within the forthcoming year.

are listed in the balance sheet, starting with accounts payable.

are listed in the balance sheet in order of their expected maturity.

should not include long-term debt that is expected to be paid within the next year.

________________________________________

Question 10

Which of the following liabilities are not related to the operating cycle?

Accounts payable

Utilities payable

Bonds payable

Salaries and wages payable

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Question 1

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

Inventory account will not be affected.

seller will bear the freight cost.

carrier will bear the freight cost.

Inventory account will be increased.

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Question 2

A merchandising company using a perpetual system will make

one more adjusting entry than a service company does.

one less adjusting entry than a service company does.

different types of adjusting entries compared to a service company.

the same number of adjusting entries as a service company does.

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Question 3

When a seller grants credit for returned goods, the account that is credited is

Sales Revenue.

Accounts Receivable.

Sales Returns and Allowances.

Inventory.

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Question 4

Which of the following would not be classified as a contra account?

Sales Discounts

Accumulated Depreciation

Sales Revenue

Sales Returns and Allowances

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Question 5

Income from operations will always result if

gross profit exceeds operating expenses.

revenues exceed operating expenses.

the cost of goods sold exceeds operating expenses.

revenues exceed cost of goods sold.

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Question 6

A company shows the following balances:

Sales Revenue $2,500,000

Sales Returns and Allowances 450,000

Sales Discounts 50,000

Cost of Goods Sold 1,400,000

What is the gross profit percentage?

44%

56%

70%

30%

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Question 7

Costner's Market recorded the following events involving a recent purchase of merchandise:

Received goods for $40,000, terms 2/10, n/30.

Returned $800 of the shipment for credit.

Paid $200 freight on the shipment.

Paid the invoice within the discount period.

As a result of these events, the company's inventory

increased by $ 38,612.

increased by $ 39,400.

increased by $ 38,416.

increased by $ 38,616.

________________________________________

Question 8

Financial information is presented below:

Operating Expenses $ 90,000

Sales Returns and Allowances 26,000

Sales Discounts 12,000

Sales 300,000

Cost of Goods Sold 158,000

Gross profit would be

$130,000.

$142,000.

$116,000.

$104,000.

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Question 9

Rae Company uses a perpetual inventory system made a purchase of merchandise on credit from Tyree Corporation on August 3, for $9,000, terms 2/10, n/45. On August 10, Rae makes the appropriate payment to Tyree. The entry on August 10 for Rae Company is

Accounts Payable 9,000

Purchase Returns and Allowances 180

Cash 8,820

Accounts Payable 8,820

Cash 8,820

Accounts Payable 9,000

Inventory 180

Cash 8,820

Accounts Payable 9,000

Cash 9,000

________________________________________

Question 10

Kate Company uses a perpetual inventory system purchased inventory from Phoebe Company. The shipping costs were $500 and the terms of the shipment were FOB shipping point. Kate would have the following entry regarding the shipping charges:

Inventory 500

Cash 500

Freight-Out 500

Cash 500

Freight Expense 500

Cash 500

There is no entry on Kate's books for this transaction.

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