Shared Flashcard Set

Details

ACT 210 final
Acounting final
51
Accounting
05/13/2009

Additional Accounting Flashcards

 


 

Cards

Term
If Kiner Company issues 1,000 shares of $5 par value common stock for $70,000, the account
Definition
Common Stock will be credited for $5,000.
Term
The number of shares of issued stock equals
Definition
outstanding shares plus treasury shares.
Term
New Corp. issues 1,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to
Definition
Common Stock $10,000 and Paid-in Capital in Excess of Par Value $4,000.
Term
A disadvantage of the corporate form of organization is
Definition
tax treatment.
Term
Which of the following statements is not considered a disadvantage of the corporate form of organization?
Definition
Limited liability of stockholders
Term
Allen Sutton has invested $600,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Sutton stand to lose?
Definition
Up to his total investment of $600,000
Term
Which of the following is not true of a corporation?
Definition
The acts of its owners bind the corporation.
Term
Which of the following would not be true of a privately held corporation?
Definition
Its shares are regularly traded on the New York Stock Exchange.
Term
Readers Company typically sells subscriptions on an annual basis, and publishes eight times a year. The magazine sells 60,000 subscriptions in January at $10 each. What entry is made in January to record the sale of the subscriptions?
Definition
Cash





600,000







Unearned Subscription Revenue





600,000
Term
Moss County Bank agrees to lend the Allenson Brick Company $200,000 on January 1. Allenson Brick Company signs a $200,000, 6%, 9-month note.

What is the adjusting entry required if Allenson Brick Company prepares financial statements on June 30?
Definition
Interest Expense
6,000
Interest Payable
6,000
Term
Moss County Bank agrees to lend the Allenson Brick Company $200,000 on January 1. Allenson Brick Company signs a $200,000, 6%, 9-month note.
The entry made by Allenson Brick Company on January 1 to record the proceeds and issuance of the note is
Definition
Cash
200,000
Notes Payable
200,000
Term
A plant asset with a cost of $90,000 and accumulated depreciation of $85,500 is sold for $10,500. What is the amount of the gain or loss on disposal of the plant asset?
Definition
$6,000 gain
Term
On July 1, 2007, Walters Kennels sells equipment for $44,000. The equipment originally cost $120,000, had an estimated 5-year life and an expected salvage value of $20,000. The Accumulated Depreciation account had a balance of $70,000 on January 1, 2007, using the straight-line method. The gain or loss on disposal is
Definition
$4,000 gain.
Term
A truck that cost $36,000 and on which $30,000 of accumulated depreciation has been recorded was disposed of for $9,000 cash. The entry to record this event would include a
Definition
gain of $3,000.
Term
On January 1, a machine with a useful life of five years and a residual value of $5,000 was purchased for $25,000. What is the depreciation expense for year 2 under straight-line depreciation?
Definition
$4,000
Term
Equipment with a cost of $150,000 has an estimated salvage value of $10,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?
Definition
$35,000
Term
Equipment with a cost of $192,000 has an estimated salvage value of $18,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?
Definition
$43,500
Term
Equipment was purchased for $17,000 on January 1, 2006. Freight charges amounted to $700 and there was a cost of $2,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $3,000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2007, if the straight-line method of depreciation is used?
Definition
$6,680.
Term
Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be
Definition
$11,760.
Term
Wynn, Inc. purchased a delivery truck for $24,000. The company was given a $2,400 cash discount by the dealer, and paid $1,200 sales tax. Annual insurance on the truck is $600. As a result of the purchase, by how much will Wynn, Inc. increase its truck account?
Definition
$22,800
Term
Carpino Company purchased equipment and these costs were incurred:

Cash price


$60,000

Sales taxes


3,000

Insurance during transit


500

Installation and testing


1,000

Total costs


$64,500
Definition
$64,500
Term
Bale Company buys land for $100,000 on 12/31/06. As of 3/31/07, the land has appreciated in value to $101,000. On 12/31/07, the land has an appraised value of $103,600. By what amount should the Land account be increased in 2007?
Definition
$0
Term
Elway Company purchases land for $85,000 cash. Elway assumes $2,500 in property taxes due on the land. The title and attorney fees totaled $1,000. Elway has the land graded for $2,200. They paid $10,000 for paving of a parking lot. What amount does Elway record as the cost for the land?
Definition
$90,700
Term
Brown Clinic purchases land for $120,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Brown Clinic record as the cost for the land?
Definition
$124,700
Term
The Land account would include all of the following costs except
Definition
the cost of building a fence.
Term
In 2007 Carpenter Company had net credit sales of 1,125,000. On January 1, 2007, Allowance for Doubtful Accounts had a credit balance of $27,000. During 2007 , $45,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $300,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2007?
Definition
$ 48,000
Term
Net credit sales for the month are $600,000. The accounts receivable balance is $120,000. The allowance is calculated as 5% of the receivables balance using the percentage of receivables basis. If the Allowance for Doubtful Accounts has a credit balance of $4,000 before adjustment, what is the balance after adjustment?
Definition
$ 6,000
Term
Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $10,000. If the balance of the Allowance for Doubtful Accounts is $2,000 credit before adjustment what is the amount of bad debt expense for that period?
Definition
$8,000
Term
Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $25,000. If the balance of the Allowance for Doubtful Accounts is $8,000 debit before adjustment what is the amount of bad debt expense for that period?
Definition
$33,000
Term
An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a
Definition
debit to Bad Debts Expense for $1,800.
Term
An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 debit balance, the adjustment to record bad debts for the period will require a
Definition
debit to Bad Debt Expense for $4,200.
Term
An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a
Definition
debit to Bad Debts Expense for $2,800.
Term
For which of the following errors should the appropriate amount be subtracted from the balance per book on a bank reconciliation?
Definition
Check for $43 recorded as $34
Term
For which of the following errors should the appropriate amount be subtracted from the balance per bank on a bank reconciliation?
Definition
A returned $200 check recorded by bank as $20
Term
For which of the following errors should the appropriate amount be added to the balance per bank on a bank reconciliation?
Definition
Deposit of $500 recorded by bank as $50
Term
A check for $167 is incorrectly recorded by a company as $176. On the bank recon-ciliation, the $9 error should be
Definition
added to the balance per books.
Term
If a check correctly written and paid by the bank for $626 is incorrectly recorded on the company's books for $662, the appropriate treatment on the bank reconciliation would be to
Definition
add $36 to the book's balance.
Term
Which of the following would be added to the balance per bank on a bank reconciliation?
Definition
Deposits in transit
Term
Each of the following would be subtracted from the balance per books on a bank reconciliation?
Definition
Outstanding checks
Term
Joe is a warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates
Definition
segregation of duties is violated.
Term
An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of
Definition
separation of duties is violated.
Term
The custodian of a company asset should
Definition
not have access to the accounting records for that asset.
Term
Internal control is defined, in part, as a plan that safeguards
Definition
assets.
Term
Internal controls are concerned with
Definition
safeguarding assets.
Term
A company just starting business made the following four inventory purchases in June:

June


1


150 units





$ 825

June


10


200 units





1,120

June


15


200 units





1,140

June


28


150 units





885













$3,970


A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand.

Using the LIFO inventory method, the value of the ending inventory on June 30 is
Definition
$1,385.
Term
A company just starting business made the following four inventory purchases in June:

June


1


150 units





$ 780

June


10


200 units





1,170

June


15


200 units





1,260

June


28


150 units





990




$4,200


A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.

The inventory method which results in the highest gross profit for June is
Definition
the FIFO method.
Term
A company just starting business made the following four inventory purchases in June:

June


1


150 units





$ 780

June


10


200 units





1,170

June


15


200 units





1,260

June


28


150 units





990




$4,200


A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.

Using the average cost method, the amount allocated to the ending inventory on June 30 is
Definition
$1,200.
Term
A company just starting business made the following four inventory purchases in June:

June


1


150 units





$ 780

June


10


200 units





1,170

June


15


200 units





1,260

June


28


150 units





990




$4,200


A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.

Using the FIFO inventory method, the amount allocated to ending inventory for June is
Definition
$1,305.00
Term
A company just starting business made the following four inventory purchases in June:

June


1


150 units





$ 780

June


10


200 units





1,170

June


15


200 units





1,260

June


28


150 units





990




$4,200


A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.

Using the LIFO inventory method, the value of the ending inventory on June 30 is
Definition


$1,072.50
Term
At December 31, 2007 Renfro Company's inventory records indicated a balance of $1,128,000. Upon further investigation it was determined that this amount included the following:




$168,000 in inventory purchases made by Renfro shipped from the seller 12/27/07 terms FOB destination, but not due to be received until January 2nd




$111,000 in goods sold by Renfro with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th.




$9,000 of goods received on consignment from Dollywood Company


What is Renfro's correct ending inventory balance at December 31, 2007?
Definition
$951,000
Term
At December 31, 2007 Renfro Company's inventory records indicated a balance of $1,128,000. Upon further investigation it was determined that this amount included the following:




$168,000 in inventory purchases made by Renfro shipped from the seller 12/27/07 terms FOB destination, but not due to be received until January 2nd




$111,000 in goods sold by Renfro with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th.




$9,000 of goods received on consignment from Dollywood Company


What is Renfro's correct ending inventory balance at December 31, 2007?
Definition
$951,000