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Corresponds to CLO

by | Nov 30, 2023 | questions

1.Corresponds
to CLO 1(a) Which of the following interrelationships is not important to
understand when preparing financial statements: (Points : 1)

Total
payments on the balance sheet should equal the cash payments for operating
activities on the statement of cash flows.
Net
income from the income statement is used in the retained earnings statement.
The
ending retained earnings from the retained earnings statement is used in the
stockholders’ equity section of the balance sheet.
The
cash on the balance sheet should be equal to the cash at the end of the
period on the statement of cash flows.

2.Corresponds
to CLO 1(b) Which of the following does not describe the balance sheet?
(Points : 1)

The
balance sheet presents a picture at a point in time of what a business owns
and owes.
The balance sheet reports the assets,
liabilities, and stockholders’ equity at a specific date.
The
balance sheet reports the changes in assets, liabilities, and stockholders’
equity over a period of time.
The
balance sheet reports assets and claims to those assets at a specific point
in time.

3.Corresponds
to CLO 1(c) Tulsa Corporation began the year by issuing $50,000 of common
stock for cash. The company recorded revenues of $200,000, expenses of $125,000,
and paid dividends of $20,000. What was Tulsa’s net income for the year?
(Points : 1)

$75,000
$105,000
$55,000
$200,000

4.Corresponds
to CLO 1(d) What is the primary purpose of the statement of cash flows?
(Points : 1)

To
disclose a company’s financing activities.
To report information about cash receipts
and cash payments of a company.
To
determine the cash balance to be used on the balance sheet.
To
determine a company’s working capital.

5.Corresponds
to CLO 2(a) Based on the following account balances, what is the total of
the debit and credit columns of this company’s adjusted trial balance?
Service Revenue…$4,500; Cash…$1,300; Unearned revenue…$3,400; Salary
expense…$1,100; Common stock…$1,000; Equipment…$7,000; Prepaid
insurance…$1,200; Depreciation expense…$700; Accumulated
depreciation…$1,400; Retained earnings…$1,000. (Points : 1)

$8,100
$11,300
$12,000
$15,800

6.Corresponds
to CLO 2(b) Given the following adjusted trial balance amounts, what is the
net income for the year?
Debit balances
Cash…$10,000; Accounts receivable…$4,000; Short-term investments…$10,000;
Prepaid rent…$700; Property, plant, & equipment…$20,000; Salary
expense…$6,000; Depreciation expense…$2,000; Rent expense…$3,500
Credit balances
Accumulated depreciation…$6,000; Accounts payable…$2,600; Unearned
revenue…$3,000; Common stock…$8,000; Retained earnings…$12,000; Service
revenue…$24,000; Interest revenue…$600. (Points : 1)

$13,100
$10,100
$13,800
$12,400

7.Corresponds
to CLO 2(c) Given the following adjusted trial balance
amounts, what is the retained earnings ending balance to be reported on the
statement of retained earnings?
Debit balances
Cash…$8,000; Accounts receivable…$12,000; Inventory…$13,000; Property,
plant, & equipment…$30,000; Cost of goods sold…$21,000; Salary
expense…$4,000; Depreciation expense…$3,000
Credit balances
Accumulated depreciation…$9,000; Accounts payable…$5,000; Common
stock…$35,000; Retained earnings…$12,000; Revenue…$30,000. (Points : 1)

$12,000
$14,000
$10,000
$17,000

8.Corresponds
to CLO 2(d) Given the following adjusted trial balance amounts, total
assets reported on the balance sheet is?
Debit balances
Cash…$20,000; Accounts receivable…$12,000; Equipment…$60,000;
Supplies…$5,000; Expenses…$110,000.
Credit balances
Accumulated depreciation…$6,000; Accounts payable…$1,000; Common
stock…$40,000; Retained earnings…$10,000; Revenue…$150,000. (Points : 1)

$141,000
$97,000
$91,000
$86,000

9.Corresponds
to CLO 3(a) Intuition Company provided consulting services and billed the
client $4,000. As a result of this transaction, (Points : 1)

assets
increased by $4,000
equity
increased by $4,000
assets
and equity remained unchanged.
both
a and b.

10.Corresponds
to CLO 3(b) Delbert Industries purchased inventory of $15,000 on account.
The entry to record this purchase will include: (Points : 1)

a
debit to Inventory and a credit to Accounts Payable.
a
debit to Inventory expense and a credit to Accounts Receivable.
a
debit to Accounts Payable and a credit to Inventory.
a
debit to Inventory and a credit to Cash.

11.Corresponds
to CLO 3(c) During June 2013, its first month of operations, the owner of
Jinx Enterprises invested cash of $25,000. Jinx had cash sales of $8,000,
bought supplies of $600 on account, and paid expenses of $12,500. Assuming
no other transactions impacted the cash account, what is the balance in
Cash at June 30. (Points : 1)

$20,500
debit
$20,500
credit
$19,900
debit
$19,900
credit

12.Corresponds
to CLO 3(d) Hemmingway Corporation paid salaries of $8,000 and advertising
expense of $3,000. Which of the following journal entries correctly records
these expenses? (Points : 1)

Debit:
Cash $11,000
Credit: Salaries/Wages Expense$8,000
Credit: Advertising Expense$3,000
Debit:
Salaries/Wages Expense$8,000
Debit: Advertising Expense $3,000
Credit: Cash $10,000
Debit:
Salaries/Wages Expense$8,000
Debit: Advertising Expense $3,000
Credit: Salaries/Wages Payable$8,000
Credit: Accounts Payable$3,000
Debit:
Salaries/Wages Expense$8,000
Debit: Advertising Expense $3,000
Credit: Cash$11,000

13.Corresponds
to CLO 4(a) Which of the following statements is correct regarding accrued
revenues and unearned revenues, before adjusting entries have been made?
(Points : 1)

Accrued
revenues have not been earned and unearned revenues have been earned.
Accrued
revenues have been paid and unearned revenues have not.
Accrued
revenues have not been recorded and unearned revenues have been recorded.
Accrued
revenues have been recorded and unearned revenues have been recorded.

14.Corresponds
to CLO 4(b) Hudson Law Corporation received $5,500 cash for legal services
to be rendered in the future. The full amount was credited to the liability
account Unearned Service Revenue. At the end of the period, Hudson
determines that $2,500 of the legal services have been rendered. The
appropriate adjusting journal entry to be made at the end of the period is:
(Points : 1)

debit
Unearned Service Revenue, $3,000; credit Cash, $3,000.
debit
Unearned Service Revenue, $3,000; credit Service Revenue, $3,000.
debit
Unearned Service Revenue, $2,500; credit Service Revenue, $2,500.
debit
Service Revenue, $2,500; credit Unearned Service Revenue, $2,500.

15.Corresponds
to CLO 4(c) Ace Corporation purchased office supplies costing $15,000 and debited
Office Supplies for the full amount. At the end of the accounting period, a
physical count of office supplies revealed $2,400 still on hand. The
appropriate adjusting journal entry to be made at the end of the period is:
(Points : 1)

debit
Office Supplies Expense, $2,400; credit Office Supplies, $2,400.
debit
Office Supplies, $2,400; credit Office Supplies Expense, $2,400.
debit
Office Supplies Expense, $12,600; credit Office Supplies, $12,600.
debit
Office Supplies, $12,600; credit Office Supplies Expense, $12,600.

16.Corresponds
to CLO 4(d) On September 1, Northgate paid $18,000 to Evans Management
Company for 12 months of rent beginning on September 1. The appropriate
journal entry was made to record this transaction. If financial statements
are prepared for the 9 months ended September 30, the adjusting entry to be
made by Northgate is: (Points : 1)

debit
Rent Expense, $13,500; credit Prepaid Rent, $13,500.
debit
Prepaid Rent, $1,500; credit Rent Revenue, $1,500.
debit
Prepaid Rent, $1,500; credit Rent Expense, $1,500.
debit
Rent Expense, $1,500; credit Prepaid Rent, $1,500.

17.Corresponds
to CLO 5(a) Lennox Corporation purchased a new delivery truck for 60,000.
The sales taxes are $4,800. The logo is painted on the side of the truck
for $1,000. The truck’s annual license is $250. Annual insurance on the
truck is $1,200. What should Lennox record as the cost of the new truck?
(Points : 1)

$60,000
$64,800
$65,800
$67,250

18.Corresponds
to CLO 5(b) On April 1, 2013, Ballard Corporation purchased equipment for
$65,000. It is estimated that the equipment will have a $5,000 salvage
value at the end of its 5 year useful life. If Ballard uses the
straight-line method of depreciation, what is the accumulated depreciation
at December 31, 2013? (Points : 1)

$13,000
$12,000
$9,750
$9,000

19.Corresponds
to CLO 5(c) Tyree Company purchased equipment with a cost of $90,000 and an
estimated salvage value of $18,000. The equipment is expected to produce
150,000 units over its estimated useful life of 10 years. If Tyree uses the
units-of-activity method, what is the depreciation cost per unit to be used
in calculating depreciation? (Points : 1)

$1.67
$0.48
$2.08
$0.60

20.Corresponds
to CLO 5(d) Kerns Company purchased equipment with a cost of $200,000 and
an estimated salvage value of $10,000. The equipment has an estimated
useful life of 10 years. If Kerns uses the double-declining balance method,
what is the annual depreciation rate to be used in calculating
depreciation? (Points : 1)

5%
10%
20%
40%

21.Corresponds
to CLO 6(a) Marshall Machinery made a sale for $80,000 on January 6. The
customer is sent a statement on January 25 and payment is received on
February 20. Marshall prepares January’s monthly internal financial
statements on February 15. Marshall follows GAAP and applies the revenue
recognition principle. When is the $80,000 considered to be earned? (Points
: 1)

February
20
February
15
January
25
January
6

22.Corresponds
to CLO 6(b) Mann Corporation’s employees worked overtime to complete an
order that is sold on July 27. The office sends a statement to the customer
on August 15, and payment is received on September 5. Mann follows GAAP. In
what month should the overtime wages be expensed? (Points : 1)

either
July or August, depending on when the pay period ends
September
August
July

23.Corresponds
to CLO 6(c) Sight Company had the following transactions during 2013: sales
of $6,000 on account; collected $1,800 for services to be performed in
2014; paid $4,300 cash for 2013 salaries; purchased airline tickets for
$500 in December for a trip to take place in 2014. What is Sight’s 2013 net
income using accrual accounting? (Points : 1)

$1,700
$1,200
$3,500
$3,000

24.Corresponds
to CLO 6(d) Lyme Corporation had the following transactions during 2013:
sales of $10,000 on account; collected $5,500 for services to be performed
in 2014; paid $3,000 cash for 2013 salaries; paid $800 for airline tickets
for a trip to take place in 2014. What is Lyme’s 2013 net income using cash
basis accounting? (Points : 1)

$11,700
$1,700
$6,200
$2,500

25.Corresponds
to CLO 7(a) Ping Sports Company purchases $1,000 of merchandise on credit.
Using the perpetual inventory approach, the journal entry to record this
transaction would be: (Points : 1)

debit:
Inventory $1,000; credit: Accounts Payable $1,000
debit:
Accounts Payable $1,000; credit: Inventory $1,000
debit:
Accounts Payable $1,000; credit: Purchases $1,000
debit:
Purchases $1,000; credit: Accounts Payable $1,000

26.Corresponds
to CLO 7(b) Gardner Corporation had sales of $2,400 on account on January
9, 2013. Gardner uses the periodic inventory method. The journal entry to
record this transaction would include: (Points : 1)

a
debit to Sales Revenue and a credit to Accounts Receivable.
a
debit to Accounts Receivable, a credit to Sales Revenue, a debit to Cost of
Goods Sold, and a credit to Inventory.
a
debit to Accounts Receivable and a credit to Sales Revenue.
a
debit to Accounts Receivable, a credit to Sales Revenue, a debit to Cost of
Goods Sold, and a credit to Purchases.

27.Corresponds
to CLO 7(c) Rupert Hobby’s accounting records show the following for the
year ending December 31, 2014: Purchase Discounts…$15,600;
Freight-in…$14,000; Purchases…$540,500; Beginning Inventory…$54,200; Ending
Inventory…$58,600; Purchase Returns…$20,000. Using the periodic inventory
system, what is the cost of goods sold? (Points : 1)

$573,100
$500,500
$536,100
$514,500

28.Corresponds
to CLO 7(d) Bay Company sold $100,000 of merchandise in the month of April,
2013. Returns that month totaled $5,000. Bay Company uses the periodic
method to determine ending inventory each December 31. For interim
financial statements, cost of goods sold is estimated based on the previous
year’s gross profit rate. If Bay Company’s gross profit rate for 2012 was
60%, what is the cost of goods sold for the month of April? (Points : 1)

$57,000
$60,000
$38,000
$40,000

29.Corresponds
to CLO 8(a) We Love Pets, Inc. has the following inventory data: January 1,
beginning inventory of 50 units at $25; January 10, purchases of 70 units
at $27; January 25, purchases of 40 units at $28. A physical count of
inventory on January 31 reveals that there are 45 units on hand. Using the
FIFO inventory method, cost of goods sold for January is (Points : 1)

$3,135
$3,005
$2,875
$1,255

30.Corresponds
to CLO 8(b) Party Retailers has the following inventory data: May 1,
beginning inventory of 200 units at $10; May 14, purchases of 300 units at
$12; May 23, purchases of 250 units at $15. A physical count of inventory
on May 31 reveals that there are 225 units on hand. Using the LIFO
inventory method, ending inventory for May is (Points : 1)

$2,300
$2,250
$7,050
$3,375

31.Corresponds
to CLO 8(c) Halting Corporation has the following inventory data: September
1, beginning inventory of 430 units at $11; September 8, purchases of 350
units at $12; September 21, purchases of 460 units at $14. A physical count
of inventory on September 30 reveals that there are 400 units on hand.
Using the weighted average inventory method, rounding the unit cost to the
nearest penny, what is cost of goods sold for September? (Points : 1)

$10,357
$4,960
$10,416
$4,932

32.Corresponds
to CLO 8(d) Unleash Corporation is a retailer operating in an industry
currently experiencing high inflation. Unleash wants to show the lowest
cost of goods sold on its income statement in order to show higher profits.
Which inventory costing method should Unleash use? (Points : 1)

FIFO
because cost of goods sold represents the earliest costs.
Average
because cost of goods sold will represent an average amount.
Specific
identification because it involves the actual costs.
LIFO
because cost of goods sold represents the latest costs.

33.Corresponds
to CLO 9(a) The following balance sheet and income statement data is
available for Gold River Corporation: Current assets…$125,000; Total
assets…$520,000; Net income…$345,000; Current liabilities…$80,000; Total
liabilities…$150,000; Stockholders’ equity…$370,000; Average common shares
outstanding… 10,000. What is Gold River’s current ratio? (Points : 1)

3.47
1.64
1.56
0.83

34.Corresponds
to CLO 9(b) The following balance sheet data is available for Pinpoint
Products: Current assets…$50,000; Property, plant, and
equipment,…$70,000…Other assets…$10,000; Current liabilities…$30,000;
Long-term liabilities…$22,000; Stockholders’ equity…$78,000; Average common
shares outstanding… 10,000. What is Pinpoint’s debt to total assets, shown
as a percentage? (Points : 1)

60%
45%
67%
40%

35.Corresponds
to CLO 9(c) The following balance sheet and income statement data is
available for Frame Manufacturing: Total assets…$520,000; Total
liabilities…$250,000; Stockholders’ equity…$270,000; Gross profit…$55,000;
Net income…$40,000; Average common shares outstanding… 25,000. What is
Frame Manufacturing’s earnings per share? (Points : 1)

$10.80
$3.50
$1.60
$2.20

36.Corresponds
to CLO 9(d) The following financial information is available for Maroon
Corporation: Sales revenue…$200,000; Cost of goods sold…$120,000; Operating
expenses…$40,000. What is Maroon’s gross profit rate, shown as a
percentage? (Points : 1)

20%
80%
60%
40%

37.Corresponds
to CLO 10(a) Which of the following is not true about a company’s system of
internal controls? (Points : 1)

Internal
control procedures are designed to safeguard assets from employee theft.
Internal
control measures can eliminate all irregularities in the accounting process.
Internal
controls can be rendered ineffective by employee collusion.
Large
companies often assign internal auditors to continuously evaluate the effectiveness
of the company’s internal control systems.

38.Corresponds
to CLO 10(b) At Speedy Market, three cashiers handle cash sales from the
same cash register drawer. Which of the following internal control
principles does this violate? (Points : 1)

Segregation
of duties
Physical
controls
Human
resource controls
Establishment
of responsibility

39.Corresponds
to CLO 10(c) At Stone Pool Supplies, one person is responsible for the
related activities of ordering merchandise, receiving goods, and paying for
them. Which of the following internal control principles does this violate?
(Points : 1)

Physical
controls
Segregation
of duties
Human
resource controls
Establishment
of responsibility

40.Corresponds
to CLO 10(d) At Pocket Protector Products, the treasurer of the company has
not taken vacation for the past 4 years. Which of the following internal
control principles does this violate? (Points : 1)

Human
resource controls
Physical
controls
Segregation
of duties
Establishment
of responsibility
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