Question 1 When a business is likely to begin selling new products or expand to other markets, which of the following characteristics of an effective accounting system

Question 1  

When a business is likely to begin selling new products or expand to other markets, which of the following characteristics of an effective accounting system would be most significant?

A) Control  

B) Flexibility  

C) Compatibility  

D) Both B and C

Question 2  

In which journal would a return of merchandise purchased on account be recorded?

The purchases journal  

The sales journal  

The cash receipts journal  

The general journal  

The cash payments journal

Question 3

Case 5.7

Sam's purchases $20,000 worth of goods on September 2. Terms of the purchase are 2/10 net 30 and FOB destination. The goods are shipped on September 3. The goods arrive at Sam's store on September 5. Shipping costs are $70. Sam pays for the goods on September 25.

Refer to Case 5.7. Sam will debit inventory for which of the following amounts?

$20,000        

$20,070  

$18,000  

$19,600

Question 4  

Case 4.1

Tyco had the following at year end:

Cash$34,000

Accounts receivable$50,000

Inventory$75,000

Accounts Payable$20,000

Owners' Capital$140,000

Owner's Withdrawal     $10,000

Sales Revenue$220,000

Expenses$180,000

Refer to Case 4.1. What is the journal entry to close Owner's Withdrawals?

A)Owner's Withdrawal$10,000 

 Owner's Capital$10,000

B)Owner's Capital$10,000 

 Owner's Withdrawal$10,000

C)Expenses$10,000 

 Owner's Withdrawal$10,000

D)Owner's Capital$10,000 

 Income Summary$10,000

A)  

B)  

C)  

D)

Question 5  

According to the book. The first step in the closing process is which of the following?

Close owner's withdrawals to owner's capital.  

Close revenues to income summary.  

Close expenses to income summary.  

Close income summary to owner's capital.

Question 6  

In which journal would a return of merchandise sold on account be recorded?

The cash payments journal  

The general journal  

The cash receipts journal  

The purchases journal  

The sales journal

Question 7  

Case 5.3

Sam's Sports Store purchases $10,000 worth of shoes from Nike on February 1. The terms of the purchase is 2/10, Net 30.

Refer to Case 5.3. Sam's pays for the purchase on February 7. How much does Sam pay?

$10,000  

$9,500  

$9,800    

$9,000

Question 8  

Which of the following is TRUE of an effective accounting information system?

An effective accounting information system must be compatible with the accounting systems of other companies in the same industry.  

An effective accounting information system must be flexible to accommodate changes in the business over time.  

Internal control is a set of accounting procedures to help a company recover in the event of a natural disaster.  

None of the above is true of an effective accounting information system.

Question 9  

Case 5.8

Revenues:

Net sales (net of sales discounts, $1,400, and returns and allowances, $2,000) $167,900

Expenses:

Cost of goods sold90,900

Wage expense10,200

Rent expense8,400

Advertising expense1,200

Insurance expense1,000

Depreciation expense   600

Supplies expenses550

Total expenses112,850

Net Income$55,050

Refer to Case 5.8. Bob's gross profit is:

$90,000.  

$167,900.  

$55,050.  

$77,000.     

Question 10  

Which of the following is the correct journal entry for paying $5,000 for an amount owed to a supplier?

A)Accounts Payable$5,000 

 Supplies$5,000

B)Cash$5,000 

 Accounts Payable$5,000

C)Supplies$5,000 

 Accounts Payable$5,000

D)Accounts Payable$5,000 

 Cash$5,000

A)  

B)  

C)  

D)

Question 11  

Which financial statement is prepared third?

Statement of Owner's Equity  

Income Statement

Balance Sheet  

Cash Flows Statement

Question 12  

Which statement best describes an organization's accountability?

Legal liability to creditors  

Ethical responsibility to the public, employees and other stakeholders  

Fiduciary responsibility to manage the resources of an organization  

Obligation to pay local, state and federal taxes

Question 13  

In which journal would the receipts of the proceeds from a note receivable (including accrued interest) be recorded?

The sales journal  

The general journal  

The cash receipts journal  

The cash payments journal  

The purchases journal

Question 14  

Case 5.7

Sam's purchases $20,000 worth of goods on September 2. Terms of the purchase are 2/10 net 30 and FOB destination. The goods are shipped on September 3. The goods arrive at Sam's store on September 5. Shipping costs are $70. Sam pays for the goods on September 25.

Refer to Case 5.7. When will Sam have legal title to the goods?

September 3  

September 2  

September 5  

September 1

Question 15  

Which of the following are important design features of an effective accounting system?

Compatibility  

Flexibility  

Control  

All of the above

Question 16  

When should the individual amounts in the Accounts Receivable column in the Cash Receipts journal be posted to the Accounts Receivable Ledger?

Annually  

Daily  

Monthly  

Weekly

Question 17  

Gross profit percentage is a measure of which of the following?

A retailer's profitability  

A retailer's liquidity  

A retailer's leverage  

A retailer's currency

Question 18  

Which of the following are typical functions within a spreadsheet?

Subtraction  

Summation of a range of cells  

Addition  

All of the above

Question 19  

In which journal would the sale of merchandise on account be recorded?

The general journal  

The sales journal  

The purchases journal  

The cash payments journal  

The cash receipts journal

Question 20  

Which of the following is the correct order in preparing the financial statements?

Income Statement, Statement of Owner's Equity, Balance Sheet  

Statement of Owner's Equity, Income Statement, Balance Sheet  

Income Statement, Balance Sheet, Statement of Owner's Equity  

Balance Sheet, Income Statement, Statement of Owner's Equity

Question 21  

The formula for gross profit percentage is which of the following?

Gross profit divided by Net sales revenue  

Net sales revenue minus Cost of goods sold  

Cost of goods sold divided by Net sales revenue  

Net sales revenue divided by Cost of goods sold

Question 22  

According to the book. The fourth and last step in the closing process is which of the following?

Close expenses to income summary.  

Close owner's withdrawals to owner's capital.  

Close revenues to income summary.  

Close income summary to owner's capital.

Question 23  

When a customer returns goods, the effect on the business is which of the following?

Decrease sales  

Increase inventory  

Decrease cost of goods sold  

All of the above

Question 24  

Case 5.6

Sam's purchases $20,000 worth of goods on September 2. Terms of the purchase are 2/10 net 30 and FOB shipping point. The goods are shipped on September 3. The goods arrive at Sam's store on September 5. Shipping costs are $70. Sam pays for the goods on September 25.

Refer to Case 5.6. Sam will debit inventory for which of the following amounts?

$18,000  

$20,070     

$20,000  

$19,600

Question 25  

Which of the following accounts would be closed?

Salaries payable  

Inventory  

Unearned revenue  

Interest expense