1. True or false. Unlike a merchandising business, a manufacturing business uses multiple inventory accounts to reflect the cost of raw materials, partially completed goods, and finished goods. TRUE FALSE 2.5 points    QUESTION 2 1. For a manufacturing business, the finished goods inventory account reflects the cost of what? Shipping Partially completed goods Completed goods Raw materials 2.5 points    QUESTION 3 1. Super Goods, an electronics retailer, purchases $80,000 worth of computers from a manufacturer in Taiwan. The terms of the purchase are FOB shipping point. Freight costs total $9,000. The goods are shipped on June 1 and delivered on June 15. On June 1, which two accounts should be debited by Super Goods in the following journal entry? Date Account Dr. Cr. 6-01-XX 80000.00 9000.00 Accounts Payable 89000.00 Inventory and Freight-out Accounts Receivable and Freight-out Inventory and Freight-in Accounts Receivable and Freight-in 2.5 points    QUESTION 4 1. At the time of shipment, goods that are purchased FOB shipping point are reported on the seller's balance sheet. considered the responsibility of the buyer. designated as freight-out. categorized as partially completed inventory. 2.5 points    QUESTION 5 1. On February 15, a buyer purchases $30,000 worth of goods from a manufacturer. The manufacturer offers the buyer a 3% discount ($900) if payment for the goods is made within 10 days. The buyer pays for the merchandise on February 20. In a journal entry, the seller should debit ________ and credit ________ for $900. Sales; Purchase Discounts Accounts Receivable; Sales Sales; Accounts Receivable Accounts Payable; Inventory 2.5 points    QUESTION 6 1. A buyer receives a sales discount from a seller for paying for purchased goods within a specific period of time. In what way does the sales discount affects the buyer? Reducing freight-in costs Reducing the cost of inventory Increasing freight-out costs Increasing the cost of inventory 2.5 points    QUESTION 7 1. For a manufacturing business, the __________ inventory account reflects the cost of products that have been manufactured and are ready to be sold. Raw materials Work-in-process Freight-in Finished goods 2.5 points    QUESTION 8 1. Which term refers to goods that a merchandising business purchases and resells? Inputs Frieght Supplies Inventory 2.5 points    QUESTION 9 1. On February 15, a buyer purchases $10,000 worth of goods from a manufacturer, who spent $5,000 to manufacture the goods. The terms of sale are FOB shipping point, and shipping costs are $800. The goods will be shipped on June 1. The manufacturer must make two journal entries on June 1. In the second journal entry, the manufacturer should debit ________ and credit ________. Date Account Dr. Cr. 6-01-XX Accounts Receivable 10,000.00 Cash 800.00 Sales 10,000.00 Date Account Dr. Cr. 6-01-XX 5,000.00 5,000.00 Cash; Cost of Goods Sold Cost of Goods Sold; ...

1. 1. True or false. Unlike a merchandising business, a
manufacturing business uses multiple inventory accounts to
reflect the cost of raw materials, partially completed goods, and
finished goods.
TRUE
FALSE
2.5 points
QUESTION 2
1. For a manufacturing business, the finished goods inventory
account reflects the cost of what?
Shipping
Partially completed goods
Completed goods
Raw materials
2.5 points
QUESTION 3
1. Super Goods, an electronics retailer, purchases $80,000
worth of computers from a manufacturer in Taiwan. The terms
of the purchase are FOB shipping point. Freight costs total
$9,000. The goods are shipped on June 1 and delivered on June
15. On June 1, which two accounts should be debited by Super
Goods in the following journal entry? Date Account Dr. Cr. 6-

2. 01-XX 80000.00 9000.00 Accounts Payable 89000.00
Inventory and Freight-out
Accounts Receivable and Freight-out
Inventory and Freight-in
Accounts Receivable and Freight-in
2.5 points
QUESTION 4
1. At the time of shipment, goods that are purchased FOB
shipping point are
reported on the seller's balance sheet.
considered the responsibility of the buyer.
designated as freight-out.
categorized as partially completed inventory.
2.5 points
QUESTION 5
1. On February 15, a buyer purchases $30,000 worth of goods
from a manufacturer. The manufacturer offers the buyer a 3%
discount ($900) if payment for the goods is made within 10
days. The buyer pays for the merchandise on February 20. In a
journal entry, the seller should debit ________ and credit

3. ________ for $900.
Sales; Purchase Discounts
Accounts Receivable; Sales
Sales; Accounts Receivable
Accounts Payable; Inventory
2.5 points
QUESTION 6
1. A buyer receives a sales discount from a seller for paying for
purchased goods within a specific period of time. In what way
does the sales discount affects the buyer?
Reducing freight-in costs
Reducing the cost of inventory
Increasing freight-out costs
Increasing the cost of inventory
2.5 points
QUESTION 7
1. For a manufacturing business, the __________ inventory
account reflects the cost of products that have been
manufactured and are ready to be sold.

4. Raw materials
Work-in-process
Freight-in
Finished goods
2.5 points
QUESTION 8
1. Which term refers to goods that a merchandising business
purchases and resells?
Inputs
Frieght
Supplies
Inventory
2.5 points
QUESTION 9
1. On February 15, a buyer purchases $10,000 worth of goods
from a manufacturer, who spent $5,000 to manufacture the
goods. The terms of sale are FOB shipping point, and shipping
costs are $800. The goods will be shipped on June 1. The
manufacturer must make two journal entries on June 1. In the
second journal entry, the manufacturer should debit ________
and credit ________. Date Account Dr. Cr. 6-01-XX Accounts

5. Receivable 10,000.00 Cash 800.00 Sales 10,000.00 Date
Account Dr. Cr. 6-01-XX 5,000.00 5,000.00
Cash; Cost of Goods Sold
Cost of Goods Sold; Inventory
Cost of Goods Sold; Cash
Inventory; Cash
2.5 points
QUESTION 10
1. Which statement about FOB shipping point is true?
Goods are the buyer's property on the shipment date.
The seller and buyer share all freight costs.
Lost goods are the responsibility of the seller.
The seller reports shipping costs as an expense.
Part 8
QUESTION 1
1. Which inventory costing approach calculates a new cost per
unit every time a purchase is made?
Periodic

6. LIFO
FIFO
Average cost
2.5 points
QUESTION 2
1. If a company that is facing rising prices wants to reduce the
amount of its taxable income, which cost flow assumption
should be used?
average cost
FIFO
LIFO
retail method
2.5 points
QUESTION 3
1. Simply Shoes uses the FIFO system in conjunction with a
perpetual inventory accounting system to track transactions that
affect the store's shoe inventory. On August 1, 2015, the store
had 50 pairs of shoes in inventory valued at $60 each. On
August 8, the store bought 100 pairs of shoes at $65 each.
Assuming the store has not sold any shoes, what was the ending
inventory on August 9?

7. $9,000
$9,500
$9,750
$9,450
2.5 points
QUESTION 4
1. Super Sportz uses the FIFO system in conjunction with a
perpetual inventory accounting system to track transactions that
affect the store's inventory of sporting goods. On July 1, there
were 100 basketballs in inventory, all valued at $5 each. On
July 9, the store sold 30 basketballs for $15 each. The store's
accountant made two journal entries for July 9. Which two did
the accountant make?
7-9-xx
Accounts Receivable
450.00
Sales
450.00
7-9-xx
_________________
150.00
_________________

8. 150.00
Debit to Inventory; credit to Cost of Goods Sold
Debit to Cost of Goods Sold; credit to Inventory
Debit to Sales; credit to Cost of Goods Sold
Debit to Accounts Payable; credit to Inventory
2.5 points
QUESTION 5
1. Which of the following best explains the increasing use of
perpetual inventory accounting systems?
Changes in government regulations
Demands of globalization
Improvements in technology
Increases in consumer awareness
2.5 points
QUESTION 6
1. The selling price of every item offered by Dailey Department
Store is marked up 5% over the actual cost of the merchandise.
Given this information, Dailey Department Store can estimate
its ending inventory balance using the method.

9. lower-of-cost-or-market
retail
2.5 points
QUESTION 7
1. Tom's Tools uses the LIFO system and made the following
purchases and sales in August. The cost of goods available for
sale for Tom's Tools is
Date
Purchases
Sales
Remaining Inventory Balance
Aug 1
100 units @ $5
Aug 7
40 units @ $12
Aug 14
80 units @ $7
Aug 21
60 units @ $14
Aug 28
90 units @ $8

10. $1,320.00
$460.00
$1,780.00
$1,280.00
2.5 points
QUESTION 8
1. DIY Hardware's inventory purchases
Date
Quantity Purchased
Cost per Unit
Total Cost
Beginning Balance
July 1
800
$2.00
$1,600
Purchase 2
July 15
600
$2.25
$1,350
Purchase 3
July 24
700
$2.10

11. $1,470
Cost of goods available for sale
Operating expenses
Accounts receivable
Cost of goods sold
2.5 points
QUESTION 9
1. True or false. A firm's decision to use FIFO, LIFO, or
average costing depends on its needs and preferences. However,
all three methods typically result in the same values for ending
inventory, cost of goods sold, gross margin, and net income.
TRUE
FALSE
2.5 points
QUESTION 10
1. Which inventory costing method depends on a firm's markup
being the same for all inventory items?
FIFO
LIFO

12. Retail method
Lower-of-cost-or-market method
Part 9
QUESTION 1
1. On January 1, 2015, Madison Manufacturing purchased a
piece of equipment that cost $600,000 and has a 10-year life.
The Madison accountant, who uses the double-declining balance
depreciation method, needs to make a journal entry to indicate
the machine’s depreciation in its second year. What amount
should be debited and credited in the following entry?
Date
Account
Dr.
Cr.
12-31-16
Depreciation Expense
Accumulated Depreciation
$192,000
$96,000
$120,000

13. $60,000
5 points
QUESTION 2
1. The units-of-activity method of depreciation relies on units
of _________________ to determine an asset’s depreciation.
time
use
5 points
QUESTION 3
1. The accountant for Dawson Dairy uses the straight-line
depreciation method. The business recently purchased a
refrigerated truck for $180,000. The truck’s salvage value is
$30,000, and has a service life of 6 years. What is the truck’s
annual depreciation?
$20,000
$30,000
$35,000
$25,000
5 points
QUESTION 4
1. Top-Notch Construction purchased a bulldozer on January 1,
2012 for $120,000. The bulldozer has an estimated service life
of 80,000 machine hours, and a salvage value of $20,000. The

14. number of hours the bulldozer was used for the first 4 years is
as follows: 8,000 hours in 2012; 9,000 hours in 2013; 7,000
hours in 2014; and 10,000 hours in 2015. The accountant for
Top-Notch uses the units-of-activity method of depreciation.
Which of the following is the correct journal entry for recording
the depreciation for 2014?
Date
Account
Dr.
Cr.
12-31-14
Accumulated Depreciation
8,750.00
Depreciation Expense
8,750.00
Date
Account
Dr.
Cr.
12-31-14
Accumulated Depreciation
10,500.00
Depreciation Expense
10,500.00

15. Date
Account
Dr.
Cr.
12-31-14
Depreciation Expense
10,500.00
Accumulated Depreciation
10,500.00
Date
Account
Dr.
Cr.
12-31-14
Depreciation Expense
8,750.00
Accumulated Depreciation
8,750.00
5 points
QUESTION 5
1. Which term refers to spreading the cost of an asset over the
asset’s service life?

16. Depreciation
Adjusting
Forecasting
Transation
Part 10
QUESTION 1
1. The process of depletion applies to which of the following?
Timber
Patents
Equipment
Real estate
3.125 points
QUESTION 2
1. On January 1, 2009, Dixon Enterprises purchased a delivery
truck for $60,000 to be used for 10 years. The truck has no
salvage value. On November 30, 2015, the company sold the
truck for $20,000 in cash. The journal entry below records the
truck's depreciation for 2015.
Date
Account
Dr.

17. Cr.
11-30-15
Depreciation Expense
5,500.00
Accumulated Depreciation
5,500.00
Which of the following journal entries correctly removes the
asset and its accumulated depreciation account from the books?
Date
Account
Dr.
Cr.
11-30-15
Accumulated Depreciation
41,500.00
Loss
20,000.00
Equipment
60,000.00
Date
Account

18. Dr.
Cr.
11-30-15
Equipment
60,000.00
Gain
1,500.00
Accumulated Depreciation
41,500.00
Cash
20,000.00
Date
Account
Dr.
Cr.
11-30-15
Equipment
60,000.00
Loss
1,500.00
Accumulated Depreciation

19. 41,500.00
Cash
20,000.00
Date
Account
Dr.
Cr.
11-30-15
Accumulated Depreciation
41,500.00
Cash
20,000.00
Gain
1,500.00
Equipment
60,000.00
3.125 points
QUESTION 3
1. In 2014, Medco Pharmaceuticals spent $1,000,000 on
research and development (R&D). In 2015, Medco scientists
developed a new medication as a result of the 2014 R&D
findings. Given this information, Medco should have

20. credited the R&D expenses in 2014.
amortized the R&D expenses between 2014 and 2015.
recorded R&D expenses in 2014.
recorded R&D expenses in 2015.
3.125 points
QUESTION 4
1. Which term refers to allocating the cost of a natural resource
to all accounting periods benefitting from its use?
Amortization
Depreciation
Depletion
Retirement
3.125 points
QUESTION 5
1. The owner of Rosie's Flower Shop recently spent $300 to
install a GPS navigation system in the shop's delivery truck, and
spent $40 to replace the truck's oil. Which of the following
statements about this situation is true?
The oil change is a betterment, as well as a capital expenditure.

21. The satellite is a betterment, as well as a revenue expenditure.
The satellite is a betterment, as well as a capital expenditure.
The oil change is a replacement outlay, as well as a capital
expenditure.
3.125 points
QUESTION 6
1. In July 2015, the owner of Carlson Construction decides to
retire a dump truck before the end of its service life because the
truck is no longer reliable. The truck has no salvage value. The
company's accountant needs to create two journal entries in this
scenario. The first journal entry records depreciation for the
first 7 months of the year. Which of the following explains the
purpose of the second journal entry?
Recording the revenue expenditures associated with the asset
Removing the asset and its accumulated depreciation from the
books
Removing the asset from the books and recording its
replacement cost
Recording the gain on disposition at the time of retirement
3.125 points
QUESTION 7
1. Sunshine Hamburgers, a fast-food chain, purchases the

22. copyright to a song that the company plans to use in all of its
commercials. Sunshine pays the songwriter $40,000 in cash for
the copyright and expects to use the song for 4 years. Based on
this information, which of the following statements is true?
Depreciation Expense should be debited for $10,000, annually.
The copyright purchase is reported as goodwill on the balance
sheet.
Amortization Expense should be debited for $10,000, annually.
The copyright is an intangible asset, so its costs are not
amortized.
3.125 points
QUESTION 8
1. DIY-Mart owns timber that it uses to make into the plywood
and lumber sold in its stores. As the timber is processed into
lumber, the DIY-Mart accountant needs to do which of the
following to the cost of the timber?
Depreciate it.
Amortize it.
Retire it.
Deplete it.

23. Part 11
QUESTION 1
1. On December 1, 2015, Winston Enterprises secured a loan
from a bank for $300,000 to purchase manufacturing equipment.
The loan will be repaid in 5 years with payments due every
month and an interest rate of 4%. What will be the interest
expense for the first payment on January 1, 2016?
$500
$1,000
$300
$1,200
2.5 points
QUESTION 2
1. Which type of bond gives the corporation the right to redeem
the bond before the maturity date?
Serial bond
Callable bond
Term bond
Convertible bond
2.5 points

24. QUESTION 3
1. On November 1, Carlson Flooring purchased copy paper and
printer ink in the amount of $500 from Office Mart. The
purchase was made on account. On November 20, Carlson's
accountant paid the full amount of the invoice using a company
check. Which journal entry correctly records the invoice
payment?
DR
CR
11/1/2015
Office Supplies
500.00
Accounts Payable
500.00
DR
CR
11/20/2015
Accounts Payable
500.00
Cash
500.00

25. DR
CR
11/20/2015
Accounts Payable
500.00
Office Supplies
500.00
DR
CR
11/1/2015
Office Supplies
500.00
Cash
500.00
2.5 points
QUESTION 4
1. True or false. When a business borrows a large sum of money
from a bank, a notes payable serves as the contractual
agreement between the two parties.

26. TRUE
FALSE
2.5 points
QUESTION 5
1. Collins Clothing Company has an operating cycle of 90 days.
How much time does Collins have to repay its current
liabilities?
2 years
1 year
90 days
6 months
2.5 points
QUESTION 6
1. The board of directors at Cameron Industries recently
approved the firm's first bond issue. On November 1, 2015, the
company issued $20 million in bonds with a 2% interest rate,
payable annually, and at a market interest rate of 2%. The bonds
will mature in 10 years. Which is recorded in the journal entry
shown below?
DR
CR
11/1/2025

27. Bonds Payable
20,000.00
Cash
20,000.00
Repaying a bond issued at face value
Repaying a bond at a discount
Issuing a bond at face value
Paying interest on a bond issued at face value
2.5 points
QUESTION 7
1. The board of directors at Cameron Industries recently
approved the firm's first bond issue. On November 1, 2015, the
company issued $20 million in bonds with a 2% interest rate,
payable annually, and at a market interest rate of 2%. The bonds
will mature in 10 years. Which correctly records the bonds
being issued?
DR
CR
11/1/2025
Cash

28. 20,400,000
Bonds Payable
20,000,000
Premium on Bonds Payable
400,000
DR
CR
11/1/2025
Cash
20,000,000
Bonds Payable
20,000,000
DR
CR
11/1/2025
Cash

29. 20,000,000
Discount on Bond Payable
400,000
Bonds Payable
20,400,000
DR
CR
11/1/2025
Bonds Payable
20,000,000
Cash
20,000,000
2.5 points
QUESTION 8
1. Wilson Industries needs to raise capital to pay for costly new
production equipment, so the firm obtains a 20-year bank loan
at an interest rate of 5%. Which statement about this situation is
most likely true?
Interest payments will be considered tax-deductible expenses.

30. The loan will be considered a current liability because of the
interest fees.
If the loan is repaid before the due date, no interest will be
charged.
If the loan is repaid in a lump sum, no interest will be charged.
2.5 points
QUESTION 9
1. Collins Clothing Company manufactures men's apparel and
conducts all business on credit. Which item, when purchased, is
considered a current liability for Collins?
Land to build a new facility
Fabric to make shirts
Trucks to deliver clothes to retailers
Buildings to store inventory
2.5 points
QUESTION 10
1. How does a company benefit from issuing callable bonds?
Retiring and reissuing bonds when interest rates drop

31. Delaying the lump sum repayment of bonds
Repaying bonds in increments when interest rates are low
Issuing bonds without any collateral
Part 12
QUESTION 1
1. True or false. Davidson Corporation has 1,000,000 shares of
$10 par value common stock issued and outstanding. The market
price of the stock is $25 per share. On March 1, 2016, the
company's board of directors declared a 5% stock dividend. The
value of the stock dividend on the declaration date would be
$500,000.
TRUE
FALSE
2.5 points
QUESTION 2
1. True or false. On November 12, 2016, Barber Corporation
issued 100,000 shares of its $2 par value common stock for $20
per share. The journal entry to record this transaction is:
TRUE
FALSE
2.5 points
QUESTION 3
1. Which statement about preferred shareholders/stock is true?

32. Preferred shareholders are not guaranteed a return on their
investment in the form of cash dividends.
Preferred stock cannot be converted to common stock.
In the event the corporation goes out of business (liquidates),
common shareholders will be paid any unpaid dividends (in
arrears), plus the value of their stock holdings before preferred
shareholders.
Preferred shareholders do not have voting rights.
2.5 points
QUESTION 4
1. On November 12, 2016, Barber Corporation issued 100,000
shares of its $2 par value common stock for $20 per share. Part
of the journal entry to record this transaction would be a
__________ to Paid-in Capital in Excess of Par for $1,800,000.
credit
debit
2.5 points
QUESTION 5
1. What is a disadvantage to issuing stock instead of bonds?
The payment of cash dividends is not a tax deductible expense.
A corporation is required to pay cash dividends.

33. The company must buy back its stock.
Payment of dividends reduces the company's net income and
profitability.
2.5 points
QUESTION 6
1. True or false. Each share of common stock entitles the owner
to own a proportionate share of the company.
TRUE
FALSE
2.5 points
QUESTION 7
1. Babel Corporation has 2,000,000 shares of $10 par value
common stock issued and outstanding. The market price of the
stock was $100 per share. Suppose the company decided to
declare a 4-for-1 stock split. What is the market price of the
shares after the stock split?
$25
$2.50
$50
$5.00

34. 2.5 points
QUESTION 8
1. True or false. A key advantage of stock financing over bond
financing is that there is no repayment.
TRUE
FALSE
2.5 points
QUESTION 9
1. On June 15, 2016, Fabin Corporation purchased 15,000
shares of its common stock for $50 per share for its treasury. On
December 1, 2016, the company sold 5,000 of its treasury
shares for $40 per share. Part of the journal entry to record the
sale of the treasury stock on December 1, 2016 would be a
__________ to Retained Earnings for $50,000.
debit
credit
2.5 points
QUESTION 10
1. Davidson Corporation has 1,000,000 shares of $10 par value
common stock issued and outstanding. The market price of the
stock is $25 per share. On March 1, 2016, the company's board
of directors declared a 5% stock dividend. The value of the
stock dividend on the declaration date would be:
$25,000,000

35. $50,000
$500,000
$1,250,000
QUESTION 1
1. Retrievable documentation for every transaction and the basis
for preparing financial statements are the two basic core
elements of a proper __________.
accounting system
database structure
accounting equation
contra account
1.25 points
QUESTION 2
1. If you sell $3,000.00 worth of clothing at your boutique, in
which account would you post this amount to reflect the
transaction?
Revenues
Liabilities

36. Equity
Expenses
1.25 points
QUESTION 3
1. The collection of all accounts in an accounting system is
called the __________.
general ledger
debit
financial statement
accounting equation
1.25 points
QUESTION 4
1. When asset, expense, and dividend accounts have more debits
than credits, they are said to have a
normal debit balance.
general ledger balance.
normal credit balance.

37. contra account balance.
1.25 points
QUESTION 5
1. If you sell $250.00 worth of smoothies at your juice bar, in
which account would you post this amount to reflect the
transaction?
Revenues
Liabilities
Equity
Expenses
1.25 points
QUESTION 6
1. The is the overall process that leads to the capture and
communication of essential accounting information.
accounting cycle
balance sheet
general ledger
general journal
1.25 points

38. QUESTION 7
1. The numbering system called the is used by a business for
account hierarchy.
chart of accounts
debit
credit
accounting equation
1.25 points
QUESTION 8
1. In the accounting cycle, the fourth step is __________.
preparing the unadjusted trial balance
posting general journal entries to the general ledger
preparing an adjusted trial balance
preparing financial statements
1.25 points
QUESTION 9
1. You have just paid off an open credit card balance with cash
and you would record the entry as a .

39. debit to accounts payable, credit to cash
credit to accounts payable, debit to cash
debit to accounts payable, credit to sales
debit to accounts payable, and debit to cash
1.25 points
QUESTION 10
1. Which type of transaction is reflected on the right side of a t-
account?
Credit accounts
Debit accounts
Chart of accounts
General ledger accounts
1.25 points
QUESTION 11
1. What is the third step of the accounting cycle?
Posting general journal entries to the general ledger
Preparing an unadjusted trial balance

40. Preparing an adjusted trial balance
Preparing financial statements
1.25 points
QUESTION 12
1. The two basic core elements of a proper accounting system
include retrievable documentation for every transaction and the
basis for preparing what?
Financial statements
Database structure
Accounting equation
Contra account
1.25 points
QUESTION 13
1. Useful financial data for purposes of investment and business
management comes from business transactions that have been
analyzed and interpreted by
accounting systems.
source documents.
a chart of accounts.

41. a general ledger.
1.25 points
QUESTION 14
1. What is the process of sorting data from the journal into the
relevant general ledger accounts?
Posting
Transaction analysis
Adjusting entries
Period closing
1.25 points
QUESTION 15
1. If you wish to look at all transactions for a given period
according to the posting date, which of the following items
would be the best choice to consult?
General journal
General ledger
Account ledger
Journal account

42. 1.25 points
QUESTION 16
1. What is the name for the numbering system used by a
business for account hierarchy?
Chart of accounts
Debit
Credit
Accounting equation
1.25 points
QUESTION 17
1. An entry that debits cash to increase the account is reflected
on of the t-account.
the left side
the right side
both sides
neither side
1.25 points
QUESTION 18
1. What is the name for the computerized accounting system
component that serves as the basis for storing, indexing, and

43. organizing data?
Database structure
General journal
General ledger
Source document
1.25 points
QUESTION 19
1. An accounting system is essential for recording the daily
transactions of a business as part of the .
accounting cycle
balance sheet
general ledger
general journal
1.25 points
QUESTION 20
1. Which of the following requires an understanding of how to
increase or decrease an account using debits and credits?
Transaction analysis

44. Adjusting entry
Trial balance
Journal entry
Part 2
QUESTION 1
1. In the accounting cycle, the ________ is prepared after the
adjusting entries are posted.
recorded transactions
general ledger
source documents
adjusted trial balance
2.5 points
QUESTION 2
1. A _________ is an expense that is recorded before it is paid
for.
prepaid expense
depreciation

45. accrued expense
revenue
2.5 points
QUESTION 3
1. The two primary accounts in the journal that are impacted by
accrued interest are .
notes payable and accounts receivable
revenue and expenses
revenue and accounts receivable
cash and notes payable
2.5 points
QUESTION 4
1. As you prepare payroll for the next pay period, the primary
accounts impacted are
cash and salaries expense.
salaries payable and accounts receivable.
cash and salaries payable.

46. salaries payable and salaries expense.
2.5 points
QUESTION 5
1. _________ is the prevailing income measurement model that
is primarily driven by a transactions and events and uses past
data that are viewed as objective and verifiable.
The periodicity assumption
Revenue recognition
The historical cost principle
Depreciation
2.5 points
QUESTION 6
1. Earned Interest that is yet to be paid to the holder of the note
is __________.
periodicity assumption
accrued interest
prepaid expense
systematic allocation
2.5 points
QUESTION 7

47. 1. The expense recognition principle that explains the manner in
which a large proportion of business costs are to be recorded is
called the ___________.
systematic allocation.
immediate recognition.
matching principle.
periodicity assumption.
2.5 points
QUESTION 8
1. Which of the following accounts is used when you record a
deposit for work that will not begin until next month?
Cash
Revenue
Unearned revenue
Prepaid expense
2.5 points
QUESTION 9
1. The is used for costs that are not seen as benefiting any
future periods and are not linked to any revenue production.

48. periodicity assumption
immediate recognition
matching principle
systematic allocation
2.5 points
QUESTION 10
1. _____________ is the process for recording the purchase of
assets and then gradually transferring their cost to expense.
Matching principle
Immediate recognition
Depreciation
Prepaid expenses
part 3
QUESTION 1

49. 1. When reviewing a worksheet, an accountant can quickly
identify the balance of accounts, which are carried forward each
period.
dividend
expense
permanent
temporary
5 points
QUESTION 2
1. At the end of an accounting cycle, which of the following is
the best indication that a company had a net income?
Moving a negative amount from temporary accounts to retained
earnings
Resetting all revenue, expense, and dividend accounts to a zero
balance
Experiencing a lower than anticipated rate of accumulated
depreciation
Transferring a positive amount from temporary accounts to
retained earnings
5 points

50. QUESTION 3
1. At the end of an accounting cycle, the accountant for Carson
Manufacturing transfers $10,000 from the firm's temporary
accounts to its retained earnings account. The accountant's
action most likely suggests that Carson Manufacturing
doubled its profitability.
adjusted its trial balance.
experienced a net income.
experienced a net loss.
5 points
QUESTION 4
1. The primary purpose of the closing process is to
post journal entries to the appropriate ledger accounts.
transfer net income into temporary accounts.
prepare for the start of the next accounting period.
set permanent accounts back to a zero balance.
5 points
QUESTION 5
1. A fiscal year reporting period is often based on what?

51. Government requirements
A firm's natural business cycle
The natural calendar
A firm's mission and vision
Part 4
QUESTION 1
1. Which account from the business is reconciled to the bank
statement in the process of a bank reconciliation?
Retained earnings
cash
Assets
equity
5 points
QUESTION 2
1. Meryl wants to tighten the process of making payments,
buying assets, and paying expenses and liabilities for her
company. What is an example of a cash control she could put in
place for her company's disbursements?
Using point-of-sale terminals

52. Using formal petty cash procedures
Preparing a cash budget
5 points
QUESTION 3
1. What is a primary cause for the possible difference in the
bank's balance and the company's balance?
Cash Receivable Accounts
Deposits made at the bank
NSF checks
5 points
QUESTION 4
1. Stephanie is reviewing the bank statement for her company
and notes that a check was returned due to non-sufficient funds
(NSF), requiring an additional journal entry. She will credit the
Cash account and debit the .
Expense Account
Accounts payable
Accounts Receivable
5 points
QUESTION 5

53. 1. What is an item that seems like cash, but would be reported
as supplies?
Stamps
IOUs
Undeposited checks
liabilites
Part 5
QUESTION 1
1. Which method for recording uncollectible accounts
receivable ensures that a bad debt expense is recorded in the
same period as the initial credit sale?
Direct write-off method
Allowance method
Net realizable value method
Contra asset method
5 points
QUESTION 2
1. Rockwell Used Cars sells a truck to Marcus for $12,000 on
October 1, 2015. Rockwell issues a 6-month note to Marcus at
an interest rate of 5%. Which of the following belongs in the

54. blank space of the following journal entry?
10-01-15
________________________
12,000
Sales
12,000
Interest Receivable
Accounts Receivable
Cash
Notes Receivable
5 points
QUESTION 3
1. An accountant who uses an income statement approach to
estimate the expected amount of bad debts is using the method:
percentage of sales
percentage of accounts receivable
aging of accounts receivable

55. direct write-off
5 points
QUESTION 4
1. Which of the following represents amounts that customers
owe to a business for purchasing goods or services from the
business on credit?
Accounts payable
Interest charges
Accounts receivable
Operating expenses
5 points
QUESTION 5
1. A customer for Dailey Enterprises had a $1,000 balance in
his account that was deemed uncollectible and written off using
an allowance method. However, the customer has now contacted
Dailey Enterprises and stated he will pay the $1,000 balance in
the next 10 days. Which of the following phrases belongs in the
journal entry?
3-1-X5
Accounts receivable
1,000
_______________
1,000

56. Net Realizable Value
Cash
Accounts payable
Allowance for Uncollectible Accounts
Part 6
QUESTION 1
1. The future value of $1,000, assuming an interest rate of 5%,
compounded yearly, for three years is $.
(Your answer should be to two decimal places.)
5 points
QUESTION 2
1. The present value of $2,000 invested at 6% interest,
compounded yearly, for three years is ________.
$1,689.24
$1,679.24
$1,699.24
$1,669.24
5 points
QUESTION 3
1. Arnold wishes to open a small business and has the
opportunity to borrow $30,000 from his brother, Fred, at an

57. interest rate of 2%.Though the money is available to him now,
Arnold is not logistically ready to open the business for another
year. What would be the advantage for Arnold to take the
money now?
There is no advantage.
He will pay less interest.
He could earn interest on the money in the meantime.
5 points
QUESTION 4
1. Chad has borrowed $80,000 from the bank to open a second
espresso cart. The interest rate is 7% and the loan term is one
year. Once the repayment is completed, Chad will have repaid
__________ to the bank.
$136,000
$85,600
$74,400
$87,000
5 points
QUESTION 5
1. The present value of an annuity that you make payments of
$1,000 yearly for three years, has an interest rate of 5%,
compounded yearly, is __________.

58. $2,523.25
$2,823.25
$2,923.25
$2,723.25
QUESTION 1
1. Which method of depreciation assigns an equal amount of
depreciation to each period of the asset's service life?
Units-of-activity
Salvage value
Double-declining balance
Straight-line
4.75 points
QUESTION 2
1. Southern Airlines purchased a new jet engine for $3,500,000.
The engine has a 50,000 hour life and no salvage value. The
accounting department at Southern Airlines determines asset
depreciation using the units-of-activity method. The engine was

59. flown 250 hours in February. What is the depreciation expense
for the engine in February?
$12,500
$17,500
$8,750
$31,250
4.75 points
QUESTION 3
1. Western Manufacturing purchased a generator on January 1,
2013 for $85,000. The generator has an estimated service life of
30,000 hours, and a salvage value of $10,000. The generator has
been used for the following time: 1,000 hours in 2013; 800
hours in 2014; and 700 hours in 2015. The accountant for
Western Manufacturing uses the units-of-activity method of
depreciation. In the following journal entry, what amount
should be debited and credited?
Date
Account
Dr.
Cr.
12-31-15
Depreciation Expense
Accumulated Depreciation

60. $2,000
$1,750
$2,500
$1,550
4.75 points
QUESTION 4
1. TVX Manufacturing purchases the patent for a tool from
another firm for $50,000. The estimated useful life of the patent
is 10 years. The cost of the patent should be __________ for the
next 10 years.
depreciated
credited
depleted
amortized
4.75 points
QUESTION 5
1. Western Manufacturing purchased a generator on January 1,
2013 for $85,000. The generator has an estimated service life of
30,000 hours, and a salvage value of $10,000. The generator has

61. been used for the following time: 1,000 hours in 2013; 800
hours in 2014; and 700 hours in 2015. The accountant for
Western Manufacturing uses the units-of-activity method of
depreciation. The December 21, 2014 journal entry to record the
generator's depreciation expense should debit Depreciation
Expense and credit Accumulated Depreciation for ________.
$4,500
$2,000
4.75 points
QUESTION 6
1. On January 1, 2014, RCV Enterprises purchased a machine
that cost $100,000 and has a 5-year life. The RCV accountant,
who uses the double-declining balance depreciation method,
needs to make a journal entry to indicate the machine's
depreciation in the first year. In the following journal entry,
what amount should be debited and credited?
Date
Account
Dr.
Cr.
12-31-14
Depreciation Expense
Accumulated Depreciation
$50,000

62. $20,000
$10,000
$40,000
4.75 points
QUESTION 7
1. In May, 2015, the owner of Dobson Enterprises sells a piece
of equipment before the end of the asset's service life because
the equipment is no longer useful to the business. The
company's accountant needs to create two journal entries in this
scenario. The first journal entry records depreciation for the
first 5 months of the year. The purpose of the second journal
entry is to ________.
remove the asset and its accumulated depreciation from the
books.
record the salvage value of the asset at the time of disposal.
debit Accounts Receivable and credit Accounts Payable for the
sale.
remove the asset from the books and record its capital
expenditures.
4.75 points
QUESTION 8
1. In May, 2015, the owner of Dobson Enterprises sells a piece

63. of equipment before the end of the asset's service life because
the equipment is no longer useful to the business. The
company's accountant creates two journal entries for the asset's
disposal. The first journal entry records ________.
depreciation for the first 5 months of the year.
capital expenditures for the life of the asset.
replacement costs of the asset.
revenue expenditures of the asset.
4.75 points
QUESTION 9
1. Allocating the cost of an oil reserve to accounting periods
that benefit from its use is a process known as
amortization.
depletion.
retirement.
depreciation.
4.75 points
QUESTION 10
1. True or false. The costs of an intangible asset with an
indefinite life must be amortized.

64. TRUE
FALSE
4.75 points
QUESTION 11
1. Southern Airlines purchased a new jet engine for $3,500,000.
The engine has a 50,000 hour life and no salvage value. The
accounting department at Southern Airlines determines asset
depreciation using the units-of-activity method. The engine was
flown 250 hours in February. What is the depreciation expense
for the engine in February?
$31,250
$12,500
$8,750
$17,500
4.75 points
QUESTION 12
1. On January 31, 2016, Wilson Trucking sells a trailer before
the end of its service life. The trailer cost $80,000 with a
service life of 80 months and no salvage value. The company
uses the straight-line depreciation method. Wilson Trucking
sells the trailer for $45,000 in cash when the trailer i s 40
months old. Depreciation was last recorded on December 31,
2015. In the second journal entry below, what should Wilson
Trucking do?

65. Date
Account
Dr.
Cr.
1-31-16
Depreciation Expense
1,000
Accumulated Depreciation
1,000
Date
Account
Dr.
Cr.
1-31-16
Accumulated Depreciation
40,000
Cash
45,000
debit Equipment for $80,000.
debit a loss of $5,000.
credit Equipment for $85,000.

66. credit a gain of $5,000.
4.75 points
QUESTION 13
1. The owner of Ricardo's Restaurant recently spent $10,000 to
replace the restaurant building's roof, which was worn out.
Since the roof has been restored to its original condition, its
cost should be recorded as a(n)
intangible asset.
revenue expenditure.
credit to Accumulated Depreciation.
debit to Accumulated Depreciation.
4.75 points
QUESTION 14
1. Thompson Manufacturing owns a machine that typically
experiences significant maintenance costs as it ages. The
company's accountant has taken higher depreciation expenses in
the early years of the machine's service life to offset high repair
costs in the future. Which method of depreciation is used by
Thompson?
Units-of-activity
Double-declining balance

67. Straight-line
Capital expenditure
4.75 points
QUESTION 15
1. Thompson Manufacturing purchased a new machine. The
company's accountant decided to use the double-declining
balance (DDB) method of depreciation for the machine. Which
of the following best explains why the accountant would use the
DDB method?
Company cash flow improves by spreading the machine's
depreciation costs equally.
The machine's repair costs are likely to increase as the machine
ages.
The machine's service life is determined by the number of hours
it is used.
The machine does not have a future salvage value for the
company.
4.75 points
QUESTION 16
1. An accountant would use the process of depletion when
allocating costs associated with the use of a(n)
bulldozer.

68. franchise.
oil reserve.
copyright.
4.75 points
QUESTION 17
1. The owner of Ricardo's Restaurant recently spent $10,000 to
replace the restaurant building's roof, which was worn out.
Since the roof has been restored to its original condition, its
cost should be recorded as a(n)
intangible asset.
debit to Accumulated Depreciation.
revenue expenditure.
credit to Accumulated Depreciation.
4.75 points
QUESTION 18
1. Tulip's Flower Shop purchased a new van to use for
delivering flowers. The van cost $40,000, and the store's
accountant believes the service life of the van will be 6 years.
With this information, the accountant can now allocate the van's
cost over 6 years. This process is known as which of the
following?
Adjustment

69. Depreciation
Estimation
Forecasting
4.75 points
QUESTION 19
1. Chapman Construction owns many large pieces of equipment
used in the business, such as cranes, bulldozers, and excavators.
In the PP&E section of the balance sheet, which of the
following would be included as a capital expenditure?
Employee training to use the equipment
Regular maintenance for the equipment
Costs to repair equipment damage
Purchase price and sales tax for equipment
4.75 points
QUESTION 20
1. True or false. Two journal entries are necessary when a
business sells an asset. One journal entry records the asset's
depreciation up to the point of sale, and a second journal entry
removes the asset and its accumulated depreciation from the
company's books.

70. FALSE
TRUE
4.75 points
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Part 2
Top of Form
QUESTION 1
1. Steele Construction recently decided to expand from
residential construction projects to commercial construction
projects, which means the firm needs additional equipment,
such as bulldozers and excavators. To finance this strategic
move, the firm issued bonds with a par value of $25 million.
The bonds pay interest annually at a stated rate of 5.0% and
mature in 20 years. On the issue date, January 1, 2016, the
market interest rate was 4.5%. The issue price was $29,250,785.
Which of the following is recorded in the journal entry shown
below?
Date
Account
Dr.
Cr.
01-01-16
Cash
$29,250,785
Bonds Payable
$25,000,000
Premium on Bonds Payable

71. $4,250,785
Issuing a bond at a discount
Issuing a bond at face value
Repaying a bond at a premium
Issuing a bond at a premium
4.75 points
QUESTION 2
1. __________ is the legal minimum for which a stock can be
sold.
Par value
Stated value
4.75 points
QUESTION 3
1. True or false. On January 5, 2016, Loeb Corporation issued
80,000 shares of 6% cumulative preferred stock with a par value
of $75. On April 1, 2016, Loeb declared a dividend on its
preferred stock, payable April 30, 2016, to stockholders of
record on April 20. The following entry would be made on the
payment date:
Dividends Payable
$360,000
Dividends Payable

72. $360,000
TRUE
FALSE
4.75 points
QUESTION 4
1. Wilton Pet Supply Store purchases dog and cat food from
Sunshine Pet Food and receives an invoice for the amount due.
The amount must be repaid to Sunshine 30 days from the
invoice date. Which best describes the debt incurred by Wilton?
A long-term liability recorded as accounts receivable
A current liability recorded as unearned revenue
A current liability recorded as accounts payable
A long-term liability recorded as accounts payable
4.75 points
QUESTION 5
1. What is the primary reason that firms incur long-term
liabilities?
Funding operating activities
Failing to sell current inventory

73. Receiving tax deductions for interest expenses
Raising capital for business expansion
4.75 points
QUESTION 6
1. Stock financing is more advantageous than bond financing for
all of the following reasons, except:
Stock financing does not require repayment, whereas bond
financing does.
Stock dividends and cash dividends are tax deductible expenses.
Stock financing gives the company more flexibility since
dividends do not have to be paid.
For investors, the return on investing in a company's stock can
be much greater (higher) than the return on the same company's
bonds.
4.75 points
QUESTION 7
1. Steele Construction recently decided to expand from
residential construction projects to commercial construction
projects, which means the firm needs additional equipment,
such as bulldozers and excavators. To finance this strategic
move, the firm issued bonds with a par value of $25 million.
The bonds pay interest annually at a stated rate of 5.0% and
mature in 20 years. On the issue date, January 1, 2016, the
market interest rate was 4.5%. The issue price was $29,250,785.
Which account should be credited in the following journal

74. entry?
Date
Account
Dr.
Cr.
01-01-16
Cash
$29,250,785
Bonds Payable
$25,000,000
Premium on Bonds Payable
$4,250,785
Amortization
Discount on Bonds Payable
Premium on Bonds Payable
Interest Expense
4.75 points
QUESTION 8
1. Carson Construction has a 20-year, secured loan with ABC
Bank, which was used to purchase a bulldozer. The bank has not
received a loan payment from Carson Construction in 6 months.
Given Carson's failure to repay the loan, what does ABC Bank

75. have the contractual right to do?
Charge a higher interest rate
Convert the note to a bond
Issue a bond to raise capital
Repossess the bulldozer
4.75 points
QUESTION 9
1. Marcos, a bond investor, typically buys bonds that are repaid
in increments. He also wants the right to trade the bonds for
shares of a company's common stock. Which type of bonds does
Marcos prefer?
Serial, convertible bonds
Unsecured, callable bonds
Term, convertible bonds
Secured, callable bonds
4.75 points
QUESTION 10
1. All of the following statements about a corporation's board of
directors are true, except:

76. It is a group of individuals elected by the shareholders.
It hires managers to run the company and employees to work for
the company.
It is a group of individuals who represent the shareholders'
interests.
It delegates the responsibility for the day to day management of
the corporation to top executives.
4.75 points
QUESTION 11
1. Which is a debt that must be repaid after 1 year or more, and
is used by businesses to raise capital to expand operations?
Contingent liability
Current liability
Accrued liability
Long-term liability
4.75 points
QUESTION 12
1. What is a disadvantage of bonds in comparison to stocks?
If a company chooses to issue bonds, the existing bondholders

77. will own a smaller proportion of the company's bonds.
Interest expense reduces the net income and profitability of the
company.
Employees who are owed back pay and retirement benefits, as
well as preferred stockholders, are paid before bond holders
receive anything.
Interest is not a tax deductible expense.
4.75 points
QUESTION 13
1. Feldman Enterprises has an operating cycle of 10 months.
How much time does Feldman have to repay its current
liabilities?
60 days
3 years
10 months
1 year
4.75 points
QUESTION 14
1. What best defines a bond?
A debt issued by a corporation to its investors

78. A contract between a creditor and a borrower
A debt that must be repaid in less than 1 year
A share in the ownership of a corporation
4.75 points
QUESTION 15
1. A disadvantage of bonds in comparison to stocks is that
__________ reduce/reduces the net income and profitability of
the company.
interest expense
cash dividends
4.75 points
QUESTION 16
1. Tomlin Corporation has 1,000,000 shares of $5 par value
common stock issued and outstanding. The market price of the
stock is $150 per share. The company decides to declare a 5-
for-1 stock split. As a result of the stock split, the market price
of the stock will decrease and the number of shares issued and
outstanding will __________.
increase
decrease
4.75 points
QUESTION 17

79. 1. Which term describes a notes payable that is attached to an
asset?
Discounted
Bonded
Current
Secured
4.75 points
QUESTION 18
1. On November 1, 2015, Concord Industries secured a loan
from a bank for $600,000 to purchase manufacturing equipment.
The loan will be repaid in 10 years with payments due every
month and an interest rate of 3%. What will be the interest
expense for the first payment on December 1, 2016?
$1,800
$600
$1,000
$1,500
4.75 points
QUESTION 19
1. Tomlin Corporation has 1,000,000 shares of $5 par value

80. common stock issued and outstanding. The market price of the
stock is $150 per share. The company decides to declare a 5-
for-1 stock split. What will be the impact of the stock split?
Retained earnings will decrease.
The market price of the stock will decrease.
Common stock, par value will increase.
Paid-in capital in excess of par value, common stock will
increase.
4.75 points
QUESTION 20
1. Each month, Wilton Pet Supply Store purchases dog and cat
food from Sunshine Pet Food and receives an invoice for the
amount due. The amount must be repaid to Sunshine 30 days
from the invoice date. This situation best describes a current
liability known as an __________.
accrued liability
accounts payable
4.75 points
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Bottom of Form
S

81. ave and Submit
QUESTION 1
1. Which of the following is used to summarize and interpret all
business transactions, resulting in useful financial data for the
purposes of investment and business management?
Source documents
Accounting systems
Chart of Accounts
General Ledger
2.375 points
QUESTION 2
1. The overall process that leads to the capture and
communication of essential accounting information is called the
____________.
general journal.
balance sheet.
general ledger.
accounting cycle.
2.375 points

82. QUESTION 3
1. Which type of account is carried forward into the new
accounting period?
Revenue
Expense
Equity
Dividend
2.375 points
QUESTION 4
1. True or false. Tye is conducting the closing process on the
year for his floristry business, Sunflowers. To transfer the
balances of Sunflowers' expense accounts, Tye would debit to
expense accounts and credit to retained earnings account.
FALSE
TRUE
2.375 points
QUESTION 5
1. An accounting system is essential for recording the daily
transactions of a business as part of the ____________.
balance sheet.

83. general journal.
accounting cycle.
general ledger.
2.375 points
QUESTION 6
1. Which of the following is used to review transactions to
ensure they are posted to the correct accounts?
General journal
Journal account
General ledger
Account ledger
2.375 points
QUESTION 7
1. The capture and communication of essential accounting
information occurs as a result of the __________ .
balance sheet
general journal
general ledger

84. accounting cycle
2.375 points
QUESTION 8
1. The primary accounts impacted by a journal entry that
records newly completed work for which you were previously
paid are __________ .
unearned revenue and revenue.
cash and accounts receivable.
unearned revenue and cash.
revenue and expense.
2.375 points
QUESTION 9
1. As you prepare payroll for the next pay period, the
__________ are the primary accounts impacted.
cash and salaries expense
cash and salaries payable
salaries payable and salaries expense
salaries payable and accounts receivable

85. 2.375 points
QUESTION 10
1. Which of the following is interest that has been earned and is
yet to be paid to the holder of the note?
Prepaid expense
Accrued interest
Periodicity assumption
Systematic allocation
2.375 points
QUESTION 11
1. Which of the following is the process for recording the
purchase of assets and then gradually transferring their cost to
expense?
Depreciation
Matching principle
Prepaid expenses
Immediate recognition
2.375 points
QUESTION 12
1. Analysis of each __________ is important to maintaining the

86. accountability over a businesss affairs.
accounting cycle
chart of accounts
trial balance
transaction
2.375 points
QUESTION 13
1. Which of the following is used for costs that are not seen as
benefiting any future periods and are not linked to any revenue
production?
Periodicity assumption
Immediate recognition
Systematic allocation
The matching principle
2.375 points
QUESTION 14
1. When land is recorded at its purchase price and that original
price is maintained in the balance sheet, even though market
value may increase over time, which of the following principles
is at work?

87. Historical cost principle
Periodicity assumption
Revenue recognition
Depreciation
2.375 points
QUESTION 15
1. You have just purchased a new piece of office equipment for
your business using cash. How would you record this entry?
Debit assets and credit cash.
Credit assets and debit cash.
Debit expenses and credit cash.
2.375 points
QUESTION 16
1. Which of the following is an expense that is recorded before
it is paid for?
Prepaid expense
Revenue

88. Accrued expense
Depreciation
2.375 points
QUESTION 17
1. ___________ produce financial data for purposes of
investment and business management based on analyzing and
interpreting business transactions.
Source documents
An accounting system
The chart of accounts
The general ledger
2.375 points
QUESTION 18
1. The process of sorting data from the journal into the relevant
general ledger accounts is called ___________.
transaction analysis.
period closing.
adjusting entries.

89. posting.
2.375 points
QUESTION 19
1. What represents the shareholders' equity value of the
company?
Cash accounts
Dividend accounts
Net income
Retained earnings balance
2.375 points
QUESTION 20
1. The retained earnings account balance __________ change
throughout the accounting period.
is likely to
does not
will
2.375 points
QUESTION 21
1. Which of the following can quickly tell a user the association
between an account type and account entry?

90. Credit
Chart of accounts
Accounting equation
Debit
2.375 points
QUESTION 22
1. Retrievable documentation for every transaction and the basis
for preparing financial statements are the two basic elements of
a proper _____________.
accounting system.
database structure.
accounting equation.
contra account.
2.375 points
QUESTION 23
1. If you sell $250.00 worth of smoothies at your juice bar, you
would post this amount to __________ in order to reflect the
transaction.
revenues

91. expenses
liabilities
equity
2.375 points
QUESTION 24
1. The two basic elements of a proper __________ are
retrievable documentation for every transaction and the basis
for preparing financial statements.
contra account
database structure
accounting equation
accounting system
2.375 points
QUESTION 25
1. The account used to record revenue received for work that
has not yet been completed is called:
unearned revenue.
revenue.

92. accrued interest.
prepaid expense.
2.375 points
QUESTION 26
1. If the accrued dollar amount for an account is different than
the actuals usage for that account in a given period, you could
align these amounts using a(n) ___________.
financial statement.
general journal.
transaction analysis.
adjusting entry.
2.375 points
QUESTION 27
1. Preparing the __________ is the next task after posting the
adjusting entries.
recorded transactions
source documents
adjusted trial balance

93. general ledger
2.375 points
QUESTION 28
1. Which accounts do not appear in the post-closing trial
balance?
Accounts receivable
Cash
Expenses
Retained earnings
2.375 points
QUESTION 29
1. __________ normally occurs at the time when services are
rendered or when goods are sold and delivered to a customer.
Depreciation
Revenue recognition
Periodicity assumption
Historical cost principle
2.375 points

94. QUESTION 30
1. A __________ is simply the action of recording an increase
to an asset, expense, or dividend account.
accounting equation
general ledger
debit
financial statement
2.375 points
QUESTION 31
1. Permanent accounts are also known as accounts.
retained earnings
real
dividend
liability
2.375 points
QUESTION 32
1. The process that involves reviewing transactions to determine
the impacted account, and in what way it is impacted, is called
___________.

95. transaction analysis.
trial balance.
adjusting entry.
journal entry.
2.375 points
QUESTION 33
1. When asset, expense, and dividend accounts have more debits
than credits, they are said to have a debit balance.
normal
credit
general ledger
contra account
2.375 points
QUESTION 34
1. Which of the following types of accounting looks at and
recognizes the events that lead to transactions, not just the cash
transactions?
Accrual accounting

96. Managerial accounting
Tax accounting
Cash basis accounting
2.375 points
QUESTION 35
1. Computerized accounting information systems are typically
built around a ____________, which means that data is stored in
an electronic array, including a variety of descriptive codes and
indices.
database structure
source document
general ledger
general journal
2.375 points
QUESTION 36
1. What is Step 1 of the accounting cycle?
examining source documents.
determining and posting adjusting entries.

97. recording transactions in the journal.
constructing a trial balance.
2.375 points
QUESTION 37
1. _____________ is Step 4 of the accounting cycle.
Constructing a trial balance
Preparing financial statements
Posting journal entries to the indicated ledger accounts
Preparing an adjusted trial balance
2.375 points
QUESTION 38
1. Which of the following is the prevailing income measurement
model that is primarily driven by transactions and events, and
uses past data that is viewed as objective and verifiable?
Revenue recognition
Periodicity assumption
Depreciation

98. Historical cost principle
2.375 points
QUESTION 39
1. A __________ is a cost you pay in advance.
accrued interest
prepaid expense
systematic allocation
exchange transaction
2.375 points
QUESTION 40
1. Interest that has been earned and is yet to be paid to the
holder of the note is called _____________.
prepaid expense.
accrued interest.
systematic allocation.
periodicity assumption.
2.375 points
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Part 2

99. QUESTION 1
1. On a notes payable, which term refers to the party to whom
the payment will be made?
Principal
Customer
Maker
Payee
4.75 points
QUESTION 2
1. Mark has $20,000 to invest for years at an interest rate of
4%, compounded annually. After calculating the future value of
this sum, what will Mark's investment be at the end of the three
year period?
$20,880.08
$23,200.00
$22,497.28
$22,400.00
4.75 points
QUESTION 3
1. When faced with uncollectible accounts receivable,

100. accountants use the to record estimates for bad debt expenses in
the same period as the related credit sales.
allowance methods
the direct write-off method
4.75 points
QUESTION 4
1. A customer for Dailey Enterprises has a $1,000 balance in his
account. The Dailey Enterprises accountant makes the following
journal entry to write off the $1,000. Which method did the
accountant use?
10-1-15
Allowance for Uncollectible Accounts
1,000
Accounts Receivable
1,000
2.
Reversal method
Direct write-off method
Allowance method
Percentage of liabilities method
4.75 points

101. QUESTION 5
1. The term "cash" includes currency, coins, bank demand
deposits, and __________ .
undeposited checks
travel expenses
certificates of deposit
IOUs
4.75 points
QUESTION 6
1. Maria purchases new living room furniture for $5,000 on
credit at Wilson Furniture. Maria's account is categorized by the
store's accountant as a note receivable, which means that Maria
agrees to _______________.
make monthly interest-free payments.
repay the $5,000 within 30 days.
repay the $5,000 plus interest.
pay a service fee for the loan.
4.75 points
QUESTION 7
1. Mandy is conducting the monthly bank reconciliation for

102. Closet World, Inc. The information provided to her is as
follows: Bank's ending balance = $11,130 Closet World's ending
balance = $11,700 Service charges = $80 Deposits in transit =
$1,170 Interest paid = $30 Outstanding checks = $650 What is
an example of something that Mandy will add to the company's
ending balance in the bank reconciliation process?
Interest paid
Deposits in transit
Outstanding checks
Service charges
4.75 points
QUESTION 8
1. The accountant for Elias Enterprises wants to ensure that bad
debt expenses are recorded in the same period as related credit
sales. Which of the following would fulfill the accountant's
objective?
Contra asset method
Direct write-off method
Allowance method
Net realizable value method

103. 4.75 points
QUESTION 9
1. A customer purchases an $80,000 boat from Aqua Boating in
July. The customer signs a contract with Aqua Boating and
agrees to repay the $80,000 debt within 18 months plus 5%
interest. Given this information, which of the following
statements is true?
The note will mature in July.
The customer is the maker of the note.
The customer has a nontrade receivable with Aqua Boating.
Aqua Boating is the principal in the note.
4.75 points
QUESTION 10
1. To calculate present value of an annuity, what is the interest
subtracted from?
Future value
Amount paid out each future period
Present value
4.75 points
QUESTION 11
1. Mandy is conducting the monthly bank reconciliation for
Closet World, Inc. The information provided to her is as

104. follows:
Bank's ending balance = $11,130
Closet World's ending balance = $11,700
Service charges = $80
Deposits in transit = $1,170
Interest paid = $30
Outstanding checks = $650
What is an example of something that Mandy will add to the
bank's ending balance in the bank reconciliation process?
Deposits in transit
Service charges
Outstanding checks
Interest paid
4.75 points
QUESTION 12
1. The process of a bank reconciliation helps to identify errors,
irregularities, and needed to be made to the __________ash
accounts in the company records.
deposits in transit
additional statements
adjustments
4.75 points

105. QUESTION 13
1. On a note, a payee is the ____________.
party to whom payment will be made.
stated value of the note.
party promising to make payments.
amount charged to use the money.
4.75 points
QUESTION 14
1. Marlena has decided to open an annuity. Because of the
nature of her business's peak earning times, her financial
consultant suggests an annuity in which Marlena makes the
payment at the beginning of each interest period. This is called
an __________.
annuity due
ordinary annuity
4.75 points
QUESTION 15
1. Which term refers to a company's uncollectible accounts
receivable?
Nontrade receivable

106. Operating expense
Bad debts expense
Accounts payable
4.75 points
QUESTION 16
1. The amount that a customer owes a company for purchasing
goods from the company on credit is categorized by the
company as a(n)
nontrade receivable.
accounts receivable.
accounts payable.
operating expense.
4.75 points
QUESTION 17
1. Kip's company has $25,000 of profits to invest. A financial
advisor informs him that it can be increased to $30,000 after
four years of investment. In this case, $25,000 is the
__________ of the investment.
future value
present value

107. 4.75 points
QUESTION 18
1. A customer of Dixon Enterprises has an uncollectible
accounts receivable (A/R) balance of $1,000 on a purchase
made in February. The Dixon accountant records the $1,000 as a
bad debts expense in December. The accountant most likely
used the
income statement approach.
direct write-off method.
balance sheet approach.
allowance method.
4.75 points
QUESTION 19
1. Aspen Appliances sells Kylie a refrigerator and an oven on
October 1, 2015 for $6,000. Aspen issues a 6-month note to
Kylie at an interest rate of 2%. Which of the following belongs
in the blank of the following journal entry?
----------
6,000
Sales
6,000
2.

108. Notes Receivable
Cash
Interest Receivable
Accounts Receivable
4.75 points
QUESTION 20
1. A cash planning system will all cash inflows and outflows for
a business.
generate and invest
make equivalent
anticipate and track