ACCT 1235 Assignment #1A (Morning) - Due October 10, 2011
Name:_赵钰焱 __Joanna__ Student Number:__1012048____ 50 Marks ____________%
TRUE/FALSE: Write 'T' if the statement is true and 'F' if the statement is false. (6 Marks)
1) An asset account is increased by a debit.
2) Cost of goods sold appears on both a multi-step income statement and a single-step income statement.
3) Using the FIFO costing method will always produce the same results whether a company uses perpetual or periodic inventory.
4) Smith borrows $10,000 on a one year Note payable that bears interest at 12% per year. He will repay the principal and interest at the end of the one-year period. Smith makes accrual adjustments and each month,
he records interest expense of $1,200.
5) Prepaid rent is usually a long-term asset.
6) Managerial accounting focuses on information for decision makers outside of the business, such as creditors and taxing authorities.
MULTIPLE CHOICE: Choose the one alternative that best completes the statement or answers the question. (24
7) Corporate ownership is a very popular type of ownership in the USA and Canada. Which of the following is a major reason that corporate ownership is popular?
A) Corporate shareholders have limited liability for the debts of the corporation.
B) The life of a corporation is limited by the death of an owner.
C) Most corporations are small or medium-sized.
D) A corporation is usually managed by the owners.
8) A business pays $500 cash for supplies. Which account is credited?
A) Accounts payable B) Cash C) Supplies D) Service revenue
9) Ending inventory for the current accounting period is understated by $2,700. What effect will this error have on Cost of goods sold and Net income?
A) Cost of goods sold Net income
B) Cost of goods sold Net income
C) Cost of goods sold Net income
D) Cost of goods sold Net income
10) Which of the following is a current asset that is expected to be converted to cash, sold, or consumed during the next year (or the normal operating cycle, if longer)?
A) Equipment B) Land
C) Accounts receivable D) Building
11) Referring to the following table, what is Operating income?
Sales revenue $460,000
Cost of goods sold 300,000
Operating expenses 85,000
Sales discounts 20,000
Sales returns and allowances 15,000
Interest revenue 5,000
A) $55,000 B) $160,000 C) $190,000 D) $40,000
12) Employees of Robert Rogers, CGA worked during the last two weeks of December. They received their paychecks on January 2. The matching principle would require that which of the following accounts appear on the income statement for the year ended December 31?
A) Salary expense B) Unearned revenue C) Prepaid expense D) Salaries payable
13) The table below represents Able Company's supplies account. Please supply the missing amount.
Beginning supplies 5,000
Supplies purchased 6,000
Supplies expense 8,000
Ending supplies ?
A) $1,000 B) $3,000 C) $11,000 D) $9,000
14) The accountant for Jones Auto Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last 2 weeks of the year. Which of the following is TRUE?
A) Net income is overstated. B) Total assets are overstated.
C) Total assets are understated. D) Total liabilities are overstated.
15) A company uses the periodic inventory method. Which of the following entries would be made to record a return of $200 of inventory purchased on account?
A) The accounting entry would be a $200 debit to Accounts payable and a $200 credit to Purchases.
B) The accounting entry would be a $200 debit to Purchase returns and allowances and a $200 credit to
C) The accounting entry would be a $200 debit to Accounts payable and a $200 credit to Purchase returns
D) The accounting entry would be a $200 debit to Purchases and a $200 credit to Accounts payable.
16) Twenty units of inventory on hand at the end of the year are recorded at their cost of $5.00 per unit using
FIFO. Current replacement cost is $4.50 per unit. What amount would be reported as inventory on the
A) $5.00 B) $100.00 C) $4.50 D) $90.00
17) A company's net sales revenue is $540,000. Its cost of goods sold is $360,000. Its gross profit percentage is:
A) 100%. B) 300%. C) 33.33%. D) 66.67%.
18) The following is the balance sheet for Green Landscaping.
Which of the following is the current ratio? (Round to two decimal places.)
A) .25 B) .68 C) .97 D) 1.27
SHORT ANSWER: Write the word or phrase that best completes each statement or answers the question. (20 Marks)
19) On November 1, 2012, Everett Janitorial Supply sold merchandise for $5,000, FOB destination, 2/10, n/30.
The merchandise cost $3,200. Everett paid transportation costs of $100. On November 6, 2012,
merchandise of $1,000 from the November 1 sale was returned. The returned merchandise had cost $600.
Everett received payment for the balance of the sale on November 10, 2012. Please provide the journal
entry to record the receipt of payment from the customer. (2)
20) Henderson Sales sold 400 units of product to a customer on account. The selling price was $25 per unit, and
the cost, according to the company's inventory records, was $12 per unit. Please provide the journal entry
to record the Sales revenue. (2)
Henderson Sales purchased $500 of inventory on account. Please provide the journal entry. (2) 21)
22) The following is the adjusted trial balance for Tuttle Photography.
Account Debit Credit
Accounts receivable 8,500
Accumulated $2,000 depreciation
Accounts payable 1,200
Salary payable 800
Unearned revenue 600
Service revenue 40,000
Salary expense 24,000
Supplies expense 2,300
Depreciation expense 1,600
Using the information from the worksheet above, prepare the closing entry for Revenues. (2)
23) Below is the adjusted trial balance for Parsons Repair Service.
Accounts Debit Credit
Accounts receivable 2,400
Prepaid rent 800
Accumulated depreciation $2,000
Accounts payable 4,200
Salary payable 1,000
Unearned revenue 800
D. Parsons, capital 6,000
D. Parsons, drawing 1,000
Service revenue 50,000
Salary expense 21,000
Rent expense 14,000
Depreciation expense 8,500
Supplies expense 500 Total $64,000 $64,000
Prepare the statement of owner's equity for the year ended December 31, 2012. (4)
24) Please refer to the following trial balance.
Accounts receivable 14,000
Accounts payable $3,000
Notes payable 25,000
Sales revenues 160,000
Sales returns and allowances 2,000
Sales discounts 3,000
Cost of goods sold 80,000
Salary expense 5,000
Utility expense 23,000
Rent expense 18,000
Interest expense 2,000
Totals $278,000 $278,000
Prepare a multi-step income statement: (8)