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FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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FINANCIAL ACCOUNTING MCQS (Write Only Correct Option) 1. Geek Squad performs services for a customer and bills the customer for $500. How would Geek Squad record this transaction? a. Accounts receivable increase by $500; revenues increase by $500. b. Cash increases by $500; revenues increase by $500. c. Accounts receivable increase by $500; revenues decrease by $500. d. Accounts receivable increase by $500; accounts payable increase by $500. e. Accounts payable increase by $500; revenues increase by $500. 2. Indicate which of the following statements is true. a. Since intangible assets lack physical substance, they need be disclosed only in the notes to the financial statements. b. Goodwill should be reported as a contra-account in the owner's equity section. c. Totals of major classes of assets can be shown in the balance sheet, with asset details disclosed in the notes to the financial statements. d. Intangible assets are typically combined with plant assets and natural resources and shown in the property, plant, and equipment section 3. A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would a. Understate net income by $350,000. b. Overstate net income by $350,000. c. Have no effect on net income. d. Overstate assets by $350,000. e. Understate assets by $350,000 4. Prior to recording adjusting entries, the Supplies account has a $450 debit balance. A physical count of supplies shows $125 of unused supplies still available. The required adjusting entry is: a. Debit Supplies $125; Credit Supplies Expense $125. b. Debit Supplies $325; Credit Supplies Expense $325. c. Debit Supplies Expense $325; Credit Supplies $325. d. Debit Supplies Expense $325; Credit Supplies $125. e. Debit Supplies Expense $125; Credit Supplies $125 1
Transcribed Image Text:FINANCIAL ACCOUNTING MCQS (Write Only Correct Option) 1. Geek Squad performs services for a customer and bills the customer for $500. How would Geek Squad record this transaction? a. Accounts receivable increase by $500; revenues increase by $500. b. Cash increases by $500; revenues increase by $500. c. Accounts receivable increase by $500; revenues decrease by $500. d. Accounts receivable increase by $500; accounts payable increase by $500. e. Accounts payable increase by $500; revenues increase by $500. 2. Indicate which of the following statements is true. a. Since intangible assets lack physical substance, they need be disclosed only in the notes to the financial statements. b. Goodwill should be reported as a contra-account in the owner's equity section. c. Totals of major classes of assets can be shown in the balance sheet, with asset details disclosed in the notes to the financial statements. d. Intangible assets are typically combined with plant assets and natural resources and shown in the property, plant, and equipment section 3. A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would a. Understate net income by $350,000. b. Overstate net income by $350,000. c. Have no effect on net income. d. Overstate assets by $350,000. e. Understate assets by $350,000 4. Prior to recording adjusting entries, the Supplies account has a $450 debit balance. A physical count of supplies shows $125 of unused supplies still available. The required adjusting entry is: a. Debit Supplies $125; Credit Supplies Expense $125. b. Debit Supplies $325; Credit Supplies Expense $325. c. Debit Supplies Expense $325; Credit Supplies $325. d. Debit Supplies Expense $325; Credit Supplies $125. e. Debit Supplies Expense $125; Credit Supplies $125 1
5. On November 1, 2015, Stockton Co. receives $3,600 cash from Hans Co. for consulting services to be provided evenly over the period November 1, 2015, to April 30, 2016–at which time Stockton credited $3,600 to Unearned Consulting Fees. The adjusting entry on December 31, 2015 (Stockton's year-end) would include a a. Debit to Unearned Consulting Fees for $1,200. b. Debit to Unearned Consulting Fees for $2,400. c. Credit to Consulting Fees Earned for $2,400. d. Debit to Consulting Fees Earned for $1,200. e. Credit to Cash for $3,600. 6. If a company had $15,000 in net income for the year, and its sales were $300,000 for the same year, what is its profit margin? a. 20% b. 2,000% c. $285,000 d. $315,000 e. 5% 7. Which of the following errors would cause the Balance Sheet and Statement of Owner's Equity columns of a work sheet to be out of balance? a. Entering a revenue amount in the Balance Sheet and Statement of Owner's Equity Debit column. b. Entering a liability amount in the Balance Sheet and Statement of Owner's Equity Credit column. c. Entering an expense account in the Balance Sheet and Statement of Owner's Equity Debit column. d. Entering an asset account in the Income Statement Debit column. e. Entering a liability amount in the Income Statement Credit column 8. A company purchased $4,500 of merchandise on May 1 with terms of 2/10, n/30. On May 6, it returned $250 of that merchandise. On May 8, it paid the balance owed for merchandise, taking any discount it is entitled to. The cash paid on May 8 is a. $4,500 b. $4,250 c. $4,160 d. $4,165 e. $4,410
Transcribed Image Text:5. On November 1, 2015, Stockton Co. receives $3,600 cash from Hans Co. for consulting services to be provided evenly over the period November 1, 2015, to April 30, 2016–at which time Stockton credited $3,600 to Unearned Consulting Fees. The adjusting entry on December 31, 2015 (Stockton's year-end) would include a a. Debit to Unearned Consulting Fees for $1,200. b. Debit to Unearned Consulting Fees for $2,400. c. Credit to Consulting Fees Earned for $2,400. d. Debit to Consulting Fees Earned for $1,200. e. Credit to Cash for $3,600. 6. If a company had $15,000 in net income for the year, and its sales were $300,000 for the same year, what is its profit margin? a. 20% b. 2,000% c. $285,000 d. $315,000 e. 5% 7. Which of the following errors would cause the Balance Sheet and Statement of Owner's Equity columns of a work sheet to be out of balance? a. Entering a revenue amount in the Balance Sheet and Statement of Owner's Equity Debit column. b. Entering a liability amount in the Balance Sheet and Statement of Owner's Equity Credit column. c. Entering an expense account in the Balance Sheet and Statement of Owner's Equity Debit column. d. Entering an asset account in the Income Statement Debit column. e. Entering a liability amount in the Income Statement Credit column 8. A company purchased $4,500 of merchandise on May 1 with terms of 2/10, n/30. On May 6, it returned $250 of that merchandise. On May 8, it paid the balance owed for merchandise, taking any discount it is entitled to. The cash paid on May 8 is a. $4,500 b. $4,250 c. $4,160 d. $4,165 e. $4,410
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