Question

Hello, this only multiple choice
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1.
Juan Foods purchases a computer system in 2015 for $20,000. Its expected useful life is 5 years. At the end of 2015, it has to record depreciation on the computer system of $2,000.

What is the correct journal entry to record the depreciation? *   
Debit computer system $2,000; credit depreciation expense $2,000 *   
Debit accumulated depreciation $2,000; credit computer system $2,000 *   
Debit depreciation expense $2,000; credit accumulated depreciation $2,000 *   
Debit computer system $2,000; credit accumulated depreciation $2,000
2. Consider the same scenario as in the previous question:

June Smith, a process engineer, has sold her 15-year patent for a new etching process to Silica Labs, Inc. In return, she has received $500,000 in cash and, based on its value on the sale date, $200,000 in common stock in Silica Labs. The stock is forecasted to double in market value over the next two months.

Assuming that Silica Labs holds some long-term debt, which of the following describes the effect of the transaction on Silica Labs? *   
Current ratio will decrease and total debt to equity ratio will increase *   
Current ratio will increase and total debt to equity ratio will decrease *   
Current ratio will increase and total debt to equity ratio will increase *   
Current ratio will decrease and total debt to equity ratio will decrease
3.
On December 31, 2014, Track Record Inc.'s sales people have firm outstanding orders totaling $1.66 million, which, it has guaranteed its customers, will be fulfilled during the month of January 2015.

If Track Record includes the $1.66 million in its sales figures for 2014, it will be violating the _______ concept. *   
materiality *   
historical cost
*   
dual-aspect *   
realization
4.
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.

What is the dollar gross margin earned by Turnadot on the special order for 200 planters? *   
$2,000 *   
$7,000 *   
$9,000 *   
$6,000
5.
Which of the following is the fundamental accounting equation? *   
Current assets + Current liabilities = Owners' equity *   
Assets + Owners' equity = Liabilities *   
Cash = Debts + Common stock *   
Assets = Liabilities + Owners' equity
6.
Panjim's 2015 cash flow from operations is


a net outflow of $90,000.

a net inflow of $90,000.    
a net inflow of $85,000.    
a net outflow $95,000



7.
During 2014, Carlita's competitor Farside had double the sales of Carlita, but it also earned a gross margin of $30,000. What was Farside's 2014 gross margin percentage?


25%    
50%    
12.5%    
Insufficient information; cannot be calcula


8.
Panjim began 2015 with salaries payable balance of $75,000. It had 2015 salary expense of $80,000. Its 2015 ending salaries payable balance must be _______.


$95,000    
$55,000    
$155,000

9.
The next six questions refer to Quentin Company's December 31, 2014, Balance Sheet.

Quentin began 2014 with the following non-current asset balances: Plant and equipment (net) $59,000; Patent (net) $28,000. No long-term assets were purchased or sold during the year. How much amortization and depreciation expense did Quentin record during 2014?


 
$4,000 *   
$7,000 *   
Cannot be estimated
$3,000    


10.
Carlita began 2014 with a retained earnings account balance of $132,000. During 2014, it declared and paid dividends of $5,000. Its December 31, 2014, retained earnings account balance _______.


is $132,000    
is $120,000    
is $139,000

11.
Quentin's current ratio on December 31, 2014, is _______.


1.25    
0.80    
0.53
1.12

12.
Carlita began 2014 with an interest payable account balance of $13,000. During 2014, it paid $5,000 in interest to its lenders. On December 31, 2014, what is its interest payable account balance?

   
$15,000    
$10,000    
$13,000
Can not answer

13.
Panjim's 2015 cash flow from financing activities is


a net outflow of $91,000.    
a net inflow of $86,000. *   
a net outflow of $86,000. *   
a net inflow of $91,000.

14.
Which one of the following best describes a balance sheet? *   
A description of the entity's operations over a period of time *   
A snapshot at a point in time of an entity's assets, liabilities and owners' equity *   
A reconciliation of an entity's bank account balance *   
A description of the company's cash flows over a period of time
15.
Weldon Engineering owes one of its creditors $20,000. To settle the debt, Weldon pays $5,000 cash and also issues common stock valued at $15,000 to the creditor.

How would this repayment of the $20,000 debt be recorded in Weldon's books? *   
Debit debt owed $20,000; credit cash $5,000; credit common stock $15,000 *   
Debit common stock $15,000; debit cash $5,000; credit debt owed $20,000 *   
Debit common stock $15,000; debit debt owed $5,000; credit cash $20,000
*   
Debit debt owed $5,000; credit cash $5,000
16.
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 27, 2015, upon delivery of planters to Turnadot's warehouse and payment of $3,000 balance due to the supplier, which one of the following journal entries best reflects the economic impact of the transaction? *   
Debit inventory $3,000; credit cash $3,000 *   
Debit inventory $4,000; credit the current asset 'advances to suppliers' $1,000; credit cash $3,000 *   
Debit cost of goods sold $4,000; credit cash $3,000; credit accounts payable $1,000 *   
Debit inventory $4,000; credit revenues $4,000
17.
June Smith, a process engineer, has sold her 15-year patent for a new etching process to Silica Labs, Inc. In return, she has received $500,000 in cash and, based on its value on the sale date, $200,000 in common stock in Silica Labs. The stock is forecasted to double in market value over the next two months.

How would this transaction be recorded by Silica Labs? *   
Debit patent account $700,000; credit cash $500,000; credit common stock $200,000 *   
Debit cash $500,000; debit common stock $200,000; credit patent account $700,000 *   
Debit cash $500,000; credit patent account $500,000 *   
Debit patent account $500,000; credit cash $500,000
18.
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 $10,000 special order, should be recorded in Turnadot's financial accounting system? *   
Debit accounts receivable $10,000; credit revenues $10,000 *   
Debit cash $3,000; credit revenues $3,000 *   
Debit cash $3,000; credit a liability 'advances from customers' $3,000 *   
Debit cash $3,000; debit accounts receivable $7,000; credit revenues $10,000
19.
Panjim's prepaid expense account consists only of garage rental prepayments. Its 2015 beginning and ending balance were the same. Which one of the following statements must be true?


Panjim had no garage rental expenses during 2015    
Panjim's prepaid expense account balance never

varied during 2015

*   
Panjim's prepaid expense account balance varied during 2015 *   
None of the above statements is true

Answer 1

1.)	Debit depreciation expense	$2,000
	Credit accumulated depreciation	$2,000
2.)	Current ratio will decrease and total debt to equity ratio will decrease
3.)	Realization
4.)	Gross Margin = $6,000 (Sales $10,000 - Supploier Payment $4000)
5.)	Assets = Liabilities + Owners' equity
6.)	Cannot answer
7.)	Insufficient information, cannot be calculated
8.)	$155,000 (Closing Balance = Opening Balance($75,000) + During the year Salary Expense($80,000) - Payments during the year (Nil))
9.)	Cannot be estimated
10.)	$132,000
11.)	Cannot answer
12.)	Cannot answer
13.)	Cannot answer
14.)	A snapshot at a point in time of an entity's assets, liabilities and owners' equity
15.)	Debit debt owed $20,000; credit cash $5,000; credit common stock $15,000
16.)	Debit inventory $4,000; credit the current asset 'advances to suppliers' $1,000; credit cash $3,000
17.)	Debit patent account $700,000; credit cash $500,000; credit common stock $200,000
18.)	Debit cash $3,000; credit a liability 'advances from customers' $3,000
19.)	Panjim's prepaid expense account balance never varied during 2015