In: Accounting
Hello, this is only multiple choice
Thanks
22.
The realization concept states that revenue is recorded when
*
it has been earned and realized or realizable.
*
all the associated costs have been paid in cash.
*
it has been received in cash.
23.
Carlita's 2014 return on sales percentage is _______.
25%
16.67%
15%
10٪
24.
The next seven questions are based on Panjim Trading Company's cash
T-account for 2015.
Based on Panjim's 2015 cash T-account, which one of the following
statements must be true?
During 2015, Panjim's total merchandise sales were $60,000.
*
During 2015, Panjim's total merchandise purchases
were $44,000. *
During 2015, Panjim issued $75,000 of
debt. *
Panjim did not record any tax expense for
2015.
25.
Complete the following sentence: The Conservatism Concept directs
an entity to consider recognizing a liability when it is
__________________. *
absolutely certain economic
resources may be sacrificed in the future
*
remotely possible economic resources may be
sacrificed in the future *
reasonably possible
economic resources may be sacrificed in the future *
reasonably certain economic resources may be sacrificed in the
future
26.
Turnadot & Sons is a small wholesaler of decorative cast iron
objects. The following events, related to a special customer order,
occur as described below:
* August 5, 2015: Turnadot receives the special order for 200
outdoor planters at a selling price of $50 each, including delivery
at a future convenient time and location. The customer, with whom
Turnadot has had a long-term, trouble-free relationship, pays
$3,000 as a deposit and agrees to pay the rest on delivery.
Turnadot immediately orders $4,000 worth of planters from its
supplier and pays a $1,000 deposit for them. * August 27, 2015:
Turnadot pays $3,000 balance due to the supplier upon delivery of
the planters to its warehouse.
* September 5, 2015: The customer calls for delivery of the
planters, and pays the balance of $7,000 when they arrive at the
customer site.
On August 5, 2015, which one of the following accounting entries,
related to the $1,000 deposit paid to the supplier for the
planters, should be recorded in Turnadot's financial accounting
system? *
Debit the current asset 'advances to
suppliers' $1,000; credit cash $1,000 *
Debit
inventory $1,000; credit cash $1,000 *
Debit cost of
goods sold $4,000; credit cash $1,000; credit accounts payable
$3,000 *
Debit cost of goods sold $1,000; credit
revenues $1,000
27.
Turnadot & Sons is a small wholesaler of decorative cast iron
objects. The following events, related to a special customer order,
occur as described below:
* August 5, 2015: Turnadot receives the special order for 200
outdoor planters at a selling price of $50 each, including delivery
at a future convenient time and location. The customer, with whom
Turnadot has had a long-term, trouble-free relationship, pays
$3,000 as a deposit and agrees to pay the rest on delivery.
Turnadot immediately orders $4,000 worth of planters from its
supplier and pays a $1,000 deposit for them.
* August 27, 2015: Turnadot pays $3,000 balance due to the supplier
upon delivery of the planters to its warehouse.
* September 5, 2015: The customer calls for delivery of the
planters, and pays the balance of $7,000 when they arrive at the
customer site.
On September 5, 2015, when the planters are delivered and the
balance of $7,000 due from the customer is collected, which one of
the following journal entries best reflects the full economic
impact of the special order on Turnadot's financial condition?
*
Dr. Cash 7,000, Cr. Revenues 7,000
and
* Dr. COGS 4,000, Cr. Inventory 4,000 *
Dr. Cash 7,000, Cr. Revenues 7,000 and
* Dr. Inventory 4,000, Cr. COGS 4,000 *
Dr. Cash 7,000, Dr. Advances from customers (liability) 3,000, Cr.
Revenues 10,000 and
* Dr. COGS 4,000, Cr. Inventory 4,000 28.
Panjim's 2015 cash flow from investing activities is
a net outflow of $7,000.
a net inflow of
$3,000.
a net inflow of
$7,000.
a net outflow of $3,000.
9.
Carlita began 2014 with a taxes payable account balance of $3,000.
On December 31, 2014, its taxes payable account balance is $7,000.
How much did Carlita pay to the tax authorities during the
year?
$2,000
$6,000
$4,000
Can not answer
30.
The next six questions refer to Carlita Company's 2014 Income
Statement.
Carlita's 2014 gross margin percentage is _______.
50%
33%
30%
25%
31.
On its June 30, 2015, balance sheet, Barrows Corporation has total
assets of $100,000, current liabilities of $40,000, and owners'
equity of $60,000.
Which one of the following statements must be true on June 30,
2015? *
It has current assets of $40,000 *
It has no long-term liabilities *
It has a cash
balance of $40,000 raised through short-term debt *
None of the above
32.
Jackie's Crafts is a successful retailer of fabric by the yard and
other sewing supplies. If Jackie were to shut down the store, the
bolts of fabrics and the bins of lace and trim, inventory valued at
$20,000, on average, at any point in time, would have to be sold
for about 10% of that value. But, Jackie's accountant does not feel
the need to reduce the value of the inventory on the books.
This is a reflection of the _______ concept. *
consistency *
materiality *
historical
cost *
going-concern
33.
Lucky Lee, a video-game store in New York city, purchases a game
machine directly from Taiwan for $30,000. In the U.S., the same
machine will probably cost at least $36,000. Pick the most
appropriate accounting action for Lucky Lee. *
Record
the machine at $36,000 *
Record the machine at $30,000
*
Record the machine for [($30,000+$36,000)/2] =
$33,000 *
Have the machine examined by an independent
appraiser and record it at the appraised value
35. To be recorded as an asset, an item must meet four specific
conditions. Three of them are: it must have been acquired at
measurable cost, it must be obtained or controlled by the entity,
and it must have been obtained or controlled in a past
transaction.
Which one of the following is the fourth condition? *
The item must have a measurable resale value *
It
must be expected to have future economic benefits *
It
must have been fully paid for *
The entity must have a
legal document confirming ownership of the item
37.
Neura Pharma, Inc. has purchased a drug patent with a remaining
useful life of 13 years. How should this new asset be classified?
*
A current tangible asset *
A
non-current tangible asset *
A non-current intangible
asset *
A current intangible asset
38.
On January 1, 2015, Jon Sports has a bond payable of $200,000.
During 2015, it pays off $20,000 of the outstanding bond principal
and issues a new $70,000 bond. There are no other transactions
related to the bond payable account.
What is Jon Sports' December 31, 2015, bond payable balance?
*
A debit balance of $250,000 *
A credit
balance of $150,000 *
A debit balance of $150,000
*
A credit balance of $250,000
40.
Which one of the following is an item of owners' equity?
*
Bank loan *
Suppliers' monetary claims
*
Prepaid expenses *
Earnings generated
by the entity
22. Realization concept states that revenue is recorded when it has been earned and realized or realizable.
23.10%
24.During 2015, Panjim issued $75,000 of debt
25. The Conservatism Concept directs an entity to consider recognizing a liability when it is reasonably certain economic resources may be sacrificed in the future.
26.Debit inventory $1,000; credit cash $1,000
Explanation:
Debit current asset advances to suppliers and credit cash $1000 because tornadot & sons did only these two things on august 5th.
27.Dr. Cash 7,000, Cr. Revenues 7,000
28.Net outflow of $3000
29. 2000.
working note.
3000+6000-X=7000
hence x =9000-7000
30.Carlita's 2014 gross margin percentage is 25%
31.It has no long-term liabilities
32.going-concern
33.Record the machine at $30,000
As the purchase price is $30000 hence its should be taken for accounting purpose
34.It must be expected to have future economic benefits
37.A non-current intangible asset
The life of the asset is more than 1 year and patent is an intangible asset.
38.A credit balance of $250,000
Reason,
Account payable balance:180000(200000-20000)
New bond issed: 70000
Hence the total amounts to 250000
40.Earnings generated by the entity