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ACC Quiz 2 Multiple choice
Quiz 2
In a good internal control system, which of the following documents are required for proper approval
of a payment to a supplier?
a journal entry, a supplier invoice, and a description of the goods being purchased
a receiving report, an invoice, and a purchase order
a purchase order, a journal entry, and a price catalog
a supplier invoice, a bill of lading, and the supplier's financial statements
The objectives of the internal control structure of a company include all of the following except:
Compliance with company policies and federal law.
Protection of its assets.
Increase in accuracy and reliability of accounting data.
Which of the following accounting methods is usually used to compute amortization expense?
declining-balance
units-of-production
straight-line
first-in, first-out
Rick Co. purchases 7,000 shares of its own $2 par value common stock for $160 per share. Which
of the following is the correct journal entry to record this transaction?
Debit Common Stock$2 Par Value $2,240,000 and credit Cash $2,240,000.
Debit Cash $2,240,000, and credit Paid-In Capital in Excess of ParCommon $2,240,000.
Debit Cash $2,240,000 and credit Treasury StockCommon $2,240,000.
Debit Treasury StockCommon $1,120,000 and credit Cash $1,120,000.
Problems (10 pts each) (please show your work for partial credit)
Ronald Company had the following balances and transactions during 2014.
10 units at $95
March 10
Sold 8 units
June 10
October 30
Sold 15 units
What is the amount of the company's Merchandise Inventory, as disclosed in the December 31,
2014 balance sheet as per the periodic weighted-average costing method?
Rubal Inc. earned revenue of $400,000 and incurred cost of goods sold of $320,000. Calculate the
gross profit percent.
$1,800,000
325,000
650,000
Calculate Thomas's inventory turnover ratio for the year. (Round your answer to two decimal places.)
Caterpillers Inc., a manufacturing company, acquired equipment on January 1, 2012 for $500,000.
Estimated useful life of the equipment was 7 years and the estimated residual value was $10,000.
On January 1, 2015, after using the equipment for 3 years, the total estimated useful life has been
revised to 9 years. Residual value remains unchanged. The company uses the straight-line method
of depreciation. Calculate depreciation expense for the year 2015.
Overton Company had the following transactions in 2012, its first year of operations.
Issued 5,000 shares of common stock. Stock has par value of $0.01 per share and was issued at
$30.00 per share.
Earned net income of $200,000.
Paid dividends of $5.00 per share.
Partridge Inc. provides the following information for the year 2014:
Net income
180,000
$20.00/share
Dividends paid
$1.00/share
110,000 shares
150,000 shares
The company has no preferred stock outstanding. Calculate the Earnings per share.
The following information is needed to reconcile the cash balance for Fire Steel Inc.
A deposit of $5,800 is in transit.
Outstanding checks total $1,500.
The book balance is $6,800 at February 28, 2013.
The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent.
The bank balance at February 28, 2013 was $18,000.
A deposit of $400 was credited by the bank for $4,000.
A customer's check for $3,700 was returned for nonsufficient funds.
The bank service charge is $60.
What was the adjusted book balance?
Which of the following correctly describes the accounting for administrative expenses of a
manufacturing company?
Administrative expenses are product costs and are expensed as incurred.
Administrative expenses are period costs and are expensed as incurred.
Administrative expenses are product costs and are expensed when the manufactured product is
sold.
Administrative expenses are period costs and are expensed when the manufactured product is sold.
Alexandra's Designs, a fashion boutique, incurred the following in the month of September:
$140,000
30,000
Indirect wages
10,000
What is the journal entry to record the total labor charges incurred during September?
A)
170,000
10,000
Wages payable
180,000
B)
180,000
Wages Payable
180,000
C)
Wages Payable
180,000
150,000
30,000
D)
180,000
Wages Payable
180,000
Factory Utilities
$ 1,500
37,500
300,000
6,900
Sales Commissions
85,000
25,000
150,000
6,500
At the beginning of 2015, Swift Company's Work-in-Process Inventory account had a balance of
$120,000. During 2015, $250,000 of direct materials were used in production, and $75,000 of direct
labor costs were incurred. Manufacturing overhead amounted to $850,000. The cost of goods
manufactured was $675,000. What is the balance in the Work-in-Process Inventory account on
December 31, 2015?
If Ace receives $350 for a job requiring 5 hours of direct labor, then how much profit will they make?
Reed Production has provided the following information for the year 2015:
Direct Labor
$153,000
62,500
271,000
53,850
Manufacturing Overhead
135,500
During the year, Reed produced 71,020 units of product. Calculate the per unit product cost.
Units produced
1,000 units
Direct materials
$ 30 per unit
Direct labor
$8 per unit
Calculate the total product cost using absorption costing and variable costing.
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three
processing departmentsMixing, Refining, and Packaging. On January 1, 2014, the first
department, Mixing, had no beginning inventory. During January, 40,000 fl. oz. of chemicals were
started in production. Of these, 32,000 fl. oz. were completed and 8,000 fl. oz. remained in process.
In the Mixing Department, all direct materials are added at the beginning of the production process
and conversion costs are applied evenly through the process.
At the end of the month, LDR calculated equivalent units. The ending inventory in the Mixing
Department was 60% complete with respect to conversion costs. With respect to conversion costs,
how many equivalent units were calculated for the product that was completed and for ending
inventory?
Margaret sells hand-knit scarves at a flea market. Each scarf sells for $25. Margaret pays $30 to rent
a vending space for one day. The variable costs are $15 per scarf. How many scarves should she
sell each day in order to break even?