Q&A Hero

Q: The bank reconciles its statement to the company's records. a. True b. False

Q: morales company issued $600,000 of 8%, 5-year bonds at 106, which pays interest annually. assuming straight-line amortization, what is the carrying value of the bonds after one year? a.$636,000 b.$632,400 c.$628,800 d.$639,600

Q: 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. a. True b. False

Q: downs company issued $800,000 of 8%, 5-year bonds at 106, which pays interest annually. assuming straight-line amortization, what is the total interest cost of the bonds? a.$368,000 b.$272,000 c.$224,000 d.$320,000

Q: scribner company issued $200,000 of 8%, 5-year bonds at 106. assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date? a.$16,000 b.$18,400 c.$13,600 d.$2,400

Q: In establishing a petty cash fund, a check is written for the amount of the fund and is journalized as a debit to Accounts Payable and a credit to Petty Cash. a. True b. False

Q: neufeld company issued $1,000,000 of 6%, 5-year bonds at 98, which pays interest annually. assuming straight-line amortization, what is the carrying value of the bonds after one year? a.$980,000 b.$982,000 c.$984,000 d.$988,000

Q: The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement. a. True b. False

Q: A voucher is a form on which is recorded pertinent data about a liability and the particulars of its payment. a. True b. False

Q: foley company issued $400,000 of 6%, 5-year bonds at 98, which pays interest annually. assuming straight-line amortization, what is the total interest cost of the bonds? a.$120,000 b.$128,000 c.$112,000 d.$116,000

Q: oliver company issued $600,000 of 6%, 5-year bonds at 98. assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date? a.$36,000 b.$18,000 c.$37,200 d.$38,400

Q: An adjustment for a customer’s NSF check is included in a company’s bank reconciliation as a deduction from the cash balance according to the bank statement. a. True b. False

Q: Businesses that have several bank accounts, petty cash, and cash on hand would maintain a separate ledger account for each type of cash. a. True b. False

Q: the 2012 financial statements of harper co. contain the following selected data (in millions).the debt to total assets ratio isa.53.1%b.44.4%c.1.88%d.6.2 times

Q: A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance. a. True b. False

Q: the adjusted trial balance for hamilton corp. at the end of the current year, 2012, contained the following accounts.the total long-term liabilities reported on the balance sheet area.$1,365,000b.$1,350,000c.$1,465,000d.$1,450,000

Q: Expenditures from a petty cash fund are documented by a petty cash receipt. a. True b. False

Q: in a recent year ley corporation had net income of $150,000, interest expense of $40,000, and a times interest earned ratio of 6. what was ley corporations income before taxes for the year? a.$280,000 b.$240,000 c.$200,000 d.none of the above

Q: in a recent year hart corporation had net income of $140,000, interest expense of $30,000, and tax expense of $40,000. what was hart corporations times interest earned ratio for the year? a.7.00 b.4.66 c.5.67 d.6.00

Q: Sarbanes-Oxley requires sole proprietorships to maintain strong and effective internal controls and thus deter fraud and prevent misleading financial statements. a. True b. False

Q: Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting. a. True b. False

Q: the relationship between current assets and current liabilities is a.useful in determining income b.useful in evaluating a company's liquidity c.called the matching principle d.useful in determining the amount of a company's long-term debt

Q: Cash equivalents include short-term investments that will be converted to cash within 120 days. a. True b. False

Q: liquidity ratios measure a company's a.operating cycle b.revenue-producing ability c.short-term debt paying ability d.long-range solvency

Q: A check outstanding for two consecutive months will appear only on the first month's bank reconciliation. a. True b. False

Q: in a recent year garvey corporation had net income of $130,000, interest expense of $20,000, and tax expense of $30,000. what was garvey corporations times interest earned ratio for the year? a.6.50 b.7.50 c.8.00 d.9.00

Q: In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records. a. True b. False

Q: the times interest earned ratio is computed by dividing a.net income by interest expense b.income before income taxes by interest expense c.income before interest expense by interest expense d.income before interest expense and income taxes by interest expense

Q: Money market accounts, commercial paper, and U.S. Treasury bills are examples of cash equivalents. a. True b. False

Q: a measure of a companys solvency is the a.acid-test ratio b.current ratio c.times interest earned ratio d.asset turnover ratio

Q: The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures. a. True b. False

Q: from an accounting standpoint, all of the following are contingencies that must be evaluated for off-balance sheet purposes except a.product warranties b.general business risks c.money-back guarantees for products d.environmental cleanup obligations

Q: all of the following are true regarding financial statement analysis ratios associated with liabilities except a.a high times interest earned ratio indicates that a company is more likely to meet interest payments as scheduled b.high liquidity ratios mean that lines of credit should be high to compensate c.if a company's current ratio is lower than the industry average, then it may lack liquidity d.unrecorded obligations causing sizeable differences between liquidity and solvency ratios can be ignored

Q: For a strong internal control system over cash, it is important to have the duties related to cash receipts and cash payments divided among different employees. a. True b. False

Q: Depositing all cash, checks, etc., in a bank and paying with checks is an internal control procedure over cash. a. True b. False

Q: restoration company issued bonds that had the following data associated with them: interest to be paid is $40,000. interest expense to be recorded is $45,000. which of the following characteristics is true? a.the bonds are sold at a premium b.after recording the interest expense, the amortization will decrease the bond carrying value c.the difference between the interest expense and the interest to be paid is the bond's par value d.after recording the interest expense, the amortization will increase the bond carrying value

Q: The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the petty cash account. a. True b. False

Q: a $700,000 bond was retired at 98 when the carrying value of the bond was $721,000. the entry to record the retirement would include a a.gain on bond redemption of $21,000 b.loss on bond redemption of $21,000 c.loss on bond redemption of $35,000 d.gain on bond redemption of $35,000

Q: The control environment in an internal control structure is the overall attitude of management and employees about the importance of internal control. a. True b. False

Q: a $600,000 bond was retired at 103 when the carrying value of the bond was $622,000. the entry to record the retirement would include a a.gain on bond redemption of $18,000 b.loss on bond redemption of $4,000 c.loss on bond redemption of $18,000 d.gain on bond redemption of $4,000

Q: a $600,000 bond was retired at 98 when the carrying value of the bond was $592,000. the entry to record the retirement would include a a.gain on bond redemption of $8,000 b.loss on bond redemption of $4,000 c.loss on bond redemption of $8,000 d.gain on bond redemption of $4,000

Q: A petty cash fund is used to pay relatively large amounts. a. True b. False

Q: Green Valley Bank sent Comstock Industries its end-of-month bank statement for July. The end-of-month balance by the bank is $11,237. The statement shows that a deposit for $4,250 is in transit at the end of the statement period. The statement also revealed that checks for $87, $105, and $95 are outstanding. Green Valley collected a $4,000 note receivable plus $120 of interest revenue. The bank charged monthly service fees of $55. The end-of-month balance per company records is $11,135.​a. Prepare a bank reconciliation as of July 31.b. Journalize any necessary entries based on the bank reconciliation.

Q: when bonds are retired before maturity, a.only a loss on redemption can be recorded b.only a gain on redemption can be recorded c.either a gain or a loss on redemption can be recorded d.neither a gain nor a loss on redemption can be recorded

Q: List the objectives of internal control, and provide three examples of control procedures.

Q: hulse corporation retires its $800,000 face value bonds at 105 on january 1, following the payment of annual interest. the carrying value of the bonds at the redemption date is $829,960. the entry to record the redemption will include a a.credit of $29,960 to loss on bond redemption b.debit of $29,960 to premium on bonds payable c.credit of $10,040 to gain on bond redemption d.debit of $40,000 to premium on bonds payable

Q: For the year ended December 31, Depot Max’s cost of merchandise sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max’s days' sales in inventory is closest to a. 42 b. 46 c. 8 d. 44

Q: the current carrying value of pierces $600,000 face value bonds is $597,750. if the bonds are retired at 102, what would be the amount pierce would pay its bondholders? a.$597,750 b.$600,000 c.$603,000 d.$612,000

Q: ervay company has $750,000 of bonds outstanding. the unamortized premium is $10,800. if the company redeemed the bonds at 101, what would be the gain or loss on the redemption? a.$3,300 gain b.$3,300 loss c.$7,500 gain d.$7,500 loss

Q: If a company values inventory at the lower of cost or market, which of the following is the value of merchandise inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole.ItemInventory QuantityUnit Cost PriceUnit Market PriceProduct C420$ 6$ 5Product D370 12 14a. $6,960b. $7,700c. $6,540d. $7,280

Q: the current carrying value of kennetts $800,000 face value bonds is $797,000. if the bonds are retired at 102, what would be the amount kennett would pay its bondholders? a.$797,000 b.$800,000 c.$804,000 d.$816,000

Q: Which of the following will be the same amount regardless of the cost flow assumption adopted? a. number of items ordered b. gross profit c. cost of merchandise sold d. ending merchandise inventory

Q: Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:Sept. 1 Inventory 20 units at $20 4 Sale 10 units 10 Purchase 30 units at $25 17 Sale 20 units 30 Purchase 10 units at $30Use the information for Addison, Inc. If Addison uses LIFO, the cost of the ending merchandise inventory on September 30 is a. $800 b. $650 c. $750 d. $700

Q: hogan company has $500,000 of bonds outstanding. the unamortized premium is $7,200. if the company redeemed the bonds at 101, what would be the gain or loss on the redemption? a.$2,200 gain b.$2,200 loss c.$5,000 gain d.$5,000 loss

Q: The primary objectives of control over inventory are a. safeguarding the inventory from damage and maintaining constant observation of the inventory b. reporting inventory in the financial statements and taking a physical inventory c. maintaining constant observation of the inventory and reporting inventory in the financial statements d. safeguarding inventory from damage and reporting inventory in the financial statements

Q: sparks company received proceeds of $211,500 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $200,000, pay interest annually on december 31st, and have a call price of 102. sparks uses the straight-line method of amortization. sparks company decided to redeem the bonds on january 1, 2013. what amount of gain or loss would sparks report on their 2011 income statement? a.$9,200 gain b.$5,200 gain c.$5,200 loss d.$9,200 loss

Q: Which document establishes an initial record of the receipt of inventory? a. receiving report b. vendor's invoice c. purchase order d. petty cash voucher

Q: sparks company received proceeds of $211,500 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $200,000, pay interest annually on december 31st, and have a call price of 102. sparks uses the straight-line method of amortization. what is the carrying value of the bonds on january 1, 2013? a.$200,000 b.$209,200 c.$190,800 d.$210,350

Q: Which document authorizes the purchase of inventory from an approved vendor? a. purchase order b. petty cash voucher c. receiving report d. vendor's invoice

Q: sparks company received proceeds of $211,500 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $200,000, pay interest annually on december 31st, and have a call price of 102. sparks uses the straight-line method of amortization. what is the amount of interest expense sparks will show with relation to these bonds for the year ended december 31, 2012? a.$16,000 b.$16,920 c.$14,850 d.$12,550

Q: Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the FIFO inventory cost method. a. $120 b. $180 c. $136 d. $144

Q: sparks company received proceeds of $211,500 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $200,000, pay interest annually on december 31st, and have a call price of 102. sparks uses the straight-line method of amortization. what is the amount of interest sparks must pay the bondholders in 2011? a.$16,920 b.$16,000 c.$16,320 d.$1,692

Q: winrow company received proceeds of $377,000 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $400,000, pay interest annually on december 31st, and have a call price of 101. winrow uses the straight-line method of amortization. winrow company decided to redeem the bonds on january 1, 2013. what amount of gain or loss would winrow report on its 2012 income statement? a.$18,400 gain b.$22,400 gain c.$22,400 loss d.$18,400 loss

Q: Use this information to answer the following questions.Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.Date Blankets Units Cost May 3 Purchase 5 $2010 Sale 3 17 Purchase 10 2420 Sale 6 23 Sale 3 30 Purchase 10 30Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method. a. $324 b. $372 c. $320 d. $364

Q: Use this information to answer the following questions.These lots of a particular commodity were available for sale during the year:Beginning inventory 10 units at $30First purchase 25 units at $32Second purchase 30 units at $34Third purchase 10 units at $35The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year rounded to the nearest dollar according to the weighted average cost method? a. $655 b. $620 c. $690 d. $659

Q: winrow company received proceeds of $377,000 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $400,000, pay interest annually on december 31st, and have a call price of 101. winrow uses the straight-line method of amortization. what is the carrying value of the bonds on january 1, 2013? a.$400,000 b.$381,600 c.$395,400 d.$379,300

Q: winrow company received proceeds of $377,000 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $400,000, pay interest annually on december 31st, and have a call price of 101. winrow uses the straight-line method of amortization. what is the amount of interest expense winrow will show with relation to these bonds for the year ended december 31, 2012? a.$32,000 b.$30,160 c.$34,300 d.$29,700

Q: During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is a. FIFO b. LIFO c. specific identification d. weighted average cost

Q: winrow company received proceeds of $377,000 on 10-year, 8% bonds issued on january 1, 2011. the bonds had a face value of $400,000, pay interest annually on december 31st, and have a call price of 101. winrow uses the straight-line method of amortization. what is the amount of interest winrow must pay the bondholders in 2011? a.$30,160 b.$32,000 c.$34,300 d.$29,700

Q: The inventory data for an item for November are:Nov. 1 Inventory 20 units at $19 4 Sale 10 units 10 Purchase 30 units at $20 17 Sale 20 units 30 Purchase 10 units at $21Using a perpetual system, what is the cost of merchandise sold for November if the company uses FIFO? a. $610 b. $600 c. $590 d. $580

Q: if bonds have been issued at a discount, then over the life of the bonds the a.carrying value of the bonds will decrease b.carrying value of the bonds will increase c.interest expense will increase, if the discount is being amortized on a straight-line basis d.unamortized discount will increase

Q: During times of rising prices, which of the following is not an accurate statement? a. Weighted average costing will yield results that are between those of FIFO and LIFO. b. LIFO will result in a higher cost of merchandise sold than FIFO. c. FIFO will result in a higher net income than LIFO. d. LIFO will result in higher income taxes than FIFO.

Q: the journal entry to record the issuance of bonds at a discount will include a a.debit to cash for the face amount of the bonds b.debit to cash for the face amount of the bonds plus the amount of the discount c.debit to cash for the face amount of the bonds minus the amount of the discount d.credit to cash for the face amount of the bonds

Q: Taking a physical count of inventory a. is not necessary when a periodic inventory system is used b. should be done near year-end c. has no internal control relevance d. is not necessary when a perpetual inventory system is used

Q: one thousand bonds with a face value of $1,000 each, are sold at 97. the entry to record the issuance is

Q: If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income? a. specific identification b. LIFO c. FIFO d. weighted average cost

Q: three thousand bonds with a face value of $1,000 each, are sold at 102. the entry to record the issuance is

Q: bond discount should be amortized to comply with a.the historical cost principle b.the matching principle c.the revenue recognition principle d.conservatism

Q: If the estimated rate of gross profit is 30%, what is the estimated cost of the merchandise inventory on September 30, based on the following data?Sept. 1 Merchandise inventory (at cost) $125,000Sept. 1–30 Purchases, net (at cost) 300,000Sept. 1–30 Sales 150,000 a. $320,000 b. $192,500 c. $275,000 d. $105,000

Q: All of the following are documents used for inventory control except a a. petty cash voucher b. vendor's invoice c. receiving report d. purchase order