ACC 303 Unit 1 – Chapter 1 Quiz 1 Land was acquired in 2018 for a future building site at a cost of $40,400. The assessed valuation for tax purposes is $27,700, a qualified appraiser placed its value at $48,900, and a recent firm offer for the land was for a cash payment of $44,300. The land should be reported in the financial statements at: Multiple Choice $ 40,400. $ 48,900. $ 44,300. $ 27,700. 2 Tri Fecta, a partnership, had revenues of $372,000 in its first year of operations. The partnership has not collected on $45,600 of its sales and still owes $39,100 on $200,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $33,100 in salaries. The partners invested $42,000 in the business and $23,000 was borrowed on a five-year note. The partnership paid $2,300 in interest that was the amount owed for the year and paid $8,400 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta. Multiple Choice $ 302,200 $ 186,700 $ 197,400 $ 193,200 3 Materiality can be affected by the dollar amount of an item, the nature of the item, or both. True or False 4 The monetary unit assumption requires that items in financial statements be measured in a particular monetary unit. True or False 5 If a company has declared bankruptcy, its financial statements likely violate: Multiple Choice The fair value measurement approach. The present value measurement approach. The stable monetary unit assumption. The going concern assumption. 6 The recognition of which of the following expenses exemplifies the application of matching expenses with the revenues they produced? Multiple Choice President's salary. Research and development. Cost of goods sold. Advertising. 7 Revenue should not be recognized until: Multiple Choice The seller has transferred goods or services to a customer. Contracts have been signed and payment has been received. Work has been performed and customer has been billed. Collection has been made and warrantees have expired. 8 The matching principle is: Multiple Choice A valuation method. An expense recognition accounting principle A cash basis reporting principle. An asset classification procedure. ACC 303 Unit 2 – Chapter 2 Quiz 1 The accounting equation can be stated as: Multiple Choice A + L ? OE = 0. A ? L + OE = 0. ?A + L ? OE = 0. A ? L ? OE = 0. 2 Mary Parker Co. invested $15,000 in ABC Corporation and received common stock in exchange. Mary Parker Co.'s journal entry to record this transaction would include a: Multiple Choice Debit to investments. Credit to retained earnings. Credit to common stock. Debit to expense. 3 On December 31, 2017, Coolwear, Inc. had a balance in its prepaid insurance account of $48,400. During 2018, $86,000 was paid for insurance. At the end of 2018, after adjusting entries were recorded, the balance in the prepaid insurance account was 42,000. Insurance expense for 2018 would be: Multiple Choice $6,400. $134,400. $86,000. $92,400. 4 Carolina Mills purchased $260,000 in supplies this year. The supplies account increased by $23,000 during the year to an ending balance of $70,000. What was supplies expense for Carolina Mills during the year? Multiple Choice $191,000. $329,000. $283,000. $237,000. 5 10/10points awarded ItemScored Item5 Item 5 10 of 10 points awarded Item Scored Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2018, and charged the $3,600 premium to Insurance expense. At its December 31, 2018, year-end, Yummy Foods would record which of the following adjusting entries? Multiple Choice •Insurance expense 750 Prepaid insurance 2,850 Insurance payable 3,600 •Prepaid insurance 750 Insurance expense 750 •Prepaid insurance 2,850 Insurance expense 2,850 •Insurance expense 750 Prepaid insurance 750Bottom of Form ACC 303 Unit 3 – Chapter 3 Quiz 1 The balance sheet reports: Multiple Choice Net income at a point in time. Cash flows for a period of time. Assets and equities at a point in time. Assets and liabilities for a period of time. 2 Current assets include cash and all other assets expected to become cash or be consumed: Multiple Choice Within one year. Within one operating cycle. Within one year or one operating cycle, whichever is shorter. Within one year or one operating cycle, whichever is longer. 3 The current ratio is calculated as: Multiple Choice Current assets divided by long-term assets. Current assets divided by total assets. Current assets divided by current liabilities. Current assets divided by total liabilities. 4 The basis used to classify assets as current or long-term is: Multiple Choice Whether an asset is monetary or nonmonetary. The operating cycle or one year, whichever is shorter. Usually one year, because the operating cycle typically is less than one year. Whether the asset is currently used in the company's operations. 5 An item not generally classified as a current asset is: Multiple Choice Patent. Trade receivables. Prepaid rent. Inventories. ACC 303 Unit 4 – Chapter 4 Quiz 1 Provincial Inc. reported the following before-tax income statement items: Operating income $ 570,000 Loss on discontinued operations 95,000 Provincial has a 34% income tax rate. Provincial would report the following amount of income tax expense as a separately stated line item in the income statement: Multiple Choice $180,540. $193,800. $32,300. $19,040. 2 On August 1, 2018, Rocket Retailers adopted a plan to discontinue its catalog sales division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by June 30, 2019. On January 31, 2019, Rocket's fiscal year-end, the following information relative to the discontinued division was accumulated: Operating loss Feb. 1, 2018–Jan. 31, 2019 $ 122,000 Estimated operating losses, Feb. 1–June 30, 2019 70,000 Impairment of division assets at Jan. 31, 2019 18,000 In its income statement for the year ended January 31, 2019, Rocket would report a before-tax loss on discontinued operations of: Multiple Choice $(122,000). $(192,000). $(52,000). $(140,000). 3 Schneider Inc. had salaries payable of $62,000 and $90,400 at the end of 2017 and 2018, respectively. During 2018, Schneider recorded $621,700 in salaries expense in its income statement. Cash outflows for salaries in 2018 were: Multiple Choice $621,700. $650,100. $593,300. $531,300. ACC 303 Unit 5 – Chapter 5 Quiz 1 Which of the following is not one of the steps for recognizing revenue? Multiple Choice Identify the performance obligations of the contract. Identify the contract with the customer. Estimate the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods and services in the contract. Allocate the transaction price to the performance obligations. 2 Which of the following is an indicator that revenue for a service can be recognized over time? Multiple Choice The seller is enhancing an asset that the buyer controls as the service is performed. The seller is providing continuous effort to the buyer. The seller can estimate the percent of work completed. The sales price is fixed and determinable. 3 Which of the following is consistent with goods and services being distinct for purposes of identifying separate performance obligations? Multiple Choice The seller regularly sells the good or service separately. The buyer could use the good or service on its own. The buyer could use the good or service in combination with goods or services the buyer could obtain elsewhere. All of the above. 4 Which of the following is an acceptable way to estimate uncertain consideration? rev: 10_11_2017_QC_CS-104837 Multiple Choice Most likely amount to be received. Minimum amount considered likely to be received. Expected value of the amount to be received. Most likely amount to be received and expected value of the amount to be received. ACC 303 Unit 6 – Chapter 6 Quiz 1 With an ordinary annuity, a payment is made or received on the date the agreement begins. True or False 2 With an annuity due, a payment is made or received on the date the agreement begins. True or False 3 An annuity is a series of equal periodic payments. True or False 4 Below are excerpts from time value of money tables for the 8% rate. 1 2 3 4 5 6 1 1.000 1.000 0.926 1.080 1.080 0.926 2 1.926 2.080 0.857 2.246 1.166 1.783 3 2.783 3.246 0.794 3.506 1.260 2.577 4 3.577 4.506 0.735 4.867 1.360 3.312 Column 3 is an interest table for the: Multiple Choice Present value of $1. Future value of $1. Present value of an ordinary annuity of $1. Present value of an annuity due of $1. ACC 303 Unit 7 – Chapter 7 Quiz 1 The Reingold Hat Company uses the allowance method to account for bad debts. During 2018, the company recorded $800,000 in credit sales. At the end of 2018, account balances were: Accounts receivable, $120,000; Allowance for uncollectible accounts, $3,000 (credit). If bad debt expense is estimated to be 3% of credit sales, the appropriate adjusting entry will include a debit to bad debt expense of: Multiple Choice Zero. $27,000 $21,000 $24,000 2 The replenishment of a petty cash fund might include which of the following? Multiple Choice A debit to cash. A debit to petty cash. A debit to office supplies expense. A credit to petty cash. 3 In a bank reconciliation, NSF checks are: Multiple Choice Subtracted from the bank balance. Added to the book balance. Added to the bank balance. Subtracted from the book balance. 4 Alvin Electronics is in the process of reconciling its bank account for the month of November. The following information is available: Balance per bank statement $ 8,325 Outstanding checks 2,400 Deposits outstanding 1,215 Bank service charges for November 35 Check written by Alvin for $300 but recorded incorrectly by Alvin as a $30 disbursement. What should be the corrected cash balance at the end of November? Multiple Choice $6,870 $7,140 $6,835 $7,105 ACC 303 Unit 8 – Chapter 8 Quiz 1 Sanfillipo, Inc., had 800 units of inventory on hand at March 1, 2018, costing $20 each. Purchases and sales of inventory during the month of March were as follows: Date Purchases Sales March 8 600 units 15 400 units @ $22 each 22 400 units @ $24 each 27 400 units Sanfillipo uses the periodic inventory system. According to a physical count, 600 units were on hand at the end of March. The cost of inventory at the end of March applying the FIFO method is: Multiple Choice $12,900 $14,400 $12,000 $14,000 2 Sanfillipo, Inc., had 800 units of inventory on hand at March 1, 2018, costing $20 each. Purchases and sales of inventory during the month of March were as follows: Date Purchases Sales March 8 600 units 15 400 units @ $22 each 22 400 units @ $24 each 27 400 units Sanfillipo uses the periodic inventory system. According to a physical count, 600 units were on hand at the end of March. The cost of inventory at the end of March applying the average cost method is: Multiple Choice $12,900 $14,400 $12,000 $14,000 3 In a period of declining costs, the use of which of the following inventory cost methods would result in the highest ending inventory? Multiple Choice FIFO. LIFO. Average cost. Weighted-average cost. 4 In a perpetual inventory system, the cost of purchases is debited to: Multiple Choice Purchases. Cost of goods sold. Inventory. Accounts payable.