Question 31

To determine the balance in an account, always subtract credits from debits.

Answer

True
False

Question 32

During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current
revenues.

Answer

True

False

Question 33

Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting
principles?

Answer

Question 34

Which of the following is true?

Answer

Question 35

On January 1, 2010, the Baker Corporation issued 10% bonds with a face value of $50,000. The bonds are sold for $46,000. The bonds pay
interest semiannually on June 30 and December 31 and the maturity date is December 31, 2014. Baker records straight-line amortization of the bond discount. The
bond interest expense for the year ended December 31, 2010, is

Answer

Question 36

The retained earnings statement should be prepared

Answer

Question 37

The par value of common stock must always be equal to its market value on the date the stock is issued.

Answer

True

False

Question 38

Generally, the revenue account for a merchandising business is entitled

Answer

Question 39

1.

On April 25, Gregg Repair Service extended an offer of $115,000 for land that had been priced for sale at $140,000. On May 3, Gregg Repair
Service accepted the seller’s counteroffer of $127,000. On June 20, the land was assessed at a value of $88,000 for property tax purposes. On August 4, Gregg
Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in Gregg Repair Service’s
records?

Answer

Question 40

A chart of accounts is a listing of accounts that make up the journal.

Answer

True

False

Question 41

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

Answer

True

False

Question 42

At the end of a period, (before adjustment), Allowance for Doubtful Accounts has a credit balance of $250. The net credit sales for the period
total $500,000. If the company estimates uncollectible accounts expense at 1% of net credit sales, the amount of bad debt expense to be recorded in an
adjusting entry is $4,750.

Answer

True

False

Question 43

The book value of a fixed asset reported on the balance sheet represents its market value on that date.

Answer

True

False

Question 44

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Answer

True

False

Question 45

The depreciation method that does not use residual value in calculating the first year’s depreciation expense is

Answer

Question 46

In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larger than the
amount of the check is added to the balance per company’s records.

Answer

True

False

Question 47

Adjusting entries affect only expense and asset accounts.

Answer

True

False

Question 48

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are
charged based on the most recent purchases first.

Answer

True

False

Question 49

A machine with a cost of $80,000 has an estimated residual value of $5,000 and an estimated life of 5 years or 15,000 hours. It is to be
depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 5,000
hours?

Answer

Question 50

Unearned revenue is a liability.

Answer

True

False