I am having problems with the following accounting multiple choice problems.
Hope someone can help me.
I hope someone can help me soon as these problems are due in a day.


_____ 12. The issuance of stock for a price that exceeds par value would require which of the following entries?

Dr. Cash, Cr. Common Stock, Cr. Retained Earnings
Dr. Cash, Cr. Common Stock, Cr. Gain on Sale of Stock
Dr. Cash, Cr. Common Stock
Dr. Cash, Cr. Common Stock, Cr. Additional Paid-In Capital

_____ 13. The sale of merchandise to a customer partly for cash and partly on account would require which of the following entries?

Dr. Accounts Receivable, Dr. Cash, Cr. Sales
Dr. Cash, Dr. Accounts Payable, Cr. Sales
Dr. Cash, Cr. Sales
Dr. Sales, Cr. Accounts Receivable, Cr. Cash

_____ 14. The purchase of equipment for cash and a 5-year note would require which of the following entries?

Dr. Equipment, Dr. Cash, Cr. Notes Payable
Dr. Equipment, Cr. Cash, Cr. Notes Payable
Dr. Cash, Dr. Notes Payable, Cr. Equipment
Dr. Equipment, Dr. Notes Payable, Cr. Cash

_____ 15. Which of the following is a permanent account?

Income Summary
Cost of Sales
Retained Earnings
Interest Expense









_____ 16. When inventory that cost $55 is sold on account for $100, which of the following would be included in the journal entry recording the cost of goods sold?

Dr. Cash $100
Cr. Cost of Goods Sold $55
Dr. Sales $100
Cr. Inventory $55

_____ 17. Each of the following accounts is increased with a debit except

Cost of Goods Sold.
Retained Earnings.
Interest Expense.
Inventory.

_____ 18. Which of the following accounts is decreased with a debit?

Accounts Receivable.
Depreciation Expense.
Sales.
Equipment.

_____ 19. Which of the following would be the adjusting entry to record depreciation on
equipment at the end of accounting period?

Dr. Depreciation Expense, Cr. Cash
Dr. Accumulated Depreciation, Cr. Depreciation Expense
Dr. Depreciation Expense, Cr. Accumulated Depreciation
Dr. Accumulated Depreciation, Cr. Cash

_____ 20. Adjusting entries

are prepared after closing entries.
improve the accuracy of a firm’s financial statements.
are made after preparing financial statements.
Transfer revenue and expense account balances to retained earnings.

_____ 21. Which of the following would be the closing entry for Sales Revenue?

Dr. Income Summary, Cr. Sales Revenue
Dr. Sales Revenue, Cr. Retained Earnings
Dr. Sales Revenue, Cr. Income Summary
Dr. Retained Earnings, Cr. Sales Revenue

_____ 22. Which of the following would be the closing entry for administrative expense?

Dr. Retained Earnings, Cr. Administrative Expenses
Dr. Income Summary, Cr. Administrative Expenses
Dr. Administrative Expenses, Cr. Retained Earnings
Dr. Administrative Expenses, Cr. Income Summary

_____ 23. Which of the following would be the closing entry for net income?

Dr. Income Summary, Cr. Retained Earnings
Dr. Income Summary, Cr. Net Income
Dr. Net Income, Cr. Income Summary
Dr. Retained Earnings, Cr. Income Summary

_____ 24. Which of the following statements about dividends is correct?

Dividends are an expense of doing business.
Dividends distribute a portion of the profits to owners.
Dividends are usually declared only once a year.
Dividends are usually paid the date they are declared.

_____ 25. Companies whose stock is traded on a public exchange and who fall under the
authority of the SEC are required to file financial statements

annually.
monthly.
quarterly.
quarterly and annually.

_____ 26. The information that a company files when it decides to issue stock to the
public is called

financial statements.
a journal.
a ledger.
a prospectus.

_____ 27. Accumulated depreciation is a (n):

asset account
contra-asset account
expense account
contra-expense account



_____ 28. The total investment by shareholders at the time the company issued the stock
is the sum of

additional paid-in capital and retained earnings.
common stock and retained earnings.
common stock and additional paid-in capital.
contributed capital and retained earnings.

_____ 29. Each of the following is a nominal account except

Cost of Goods Sold.
Income Summary.
Retained Earnings.
Sales.

_____ 30. The approach used by most firms for analyzing transactions is the

double-entry accounting system.
equation approach.
ledger system.
transactions approach.

____ 31. The set of T-accounts that a company uses is collectively referred to as

nominal accounts.
the ledger.
permanent accounts.
the journal.

_____ 32. Transactions that involve revenue and expense accounts are

financing activities.
investing activities.
operating activities.
nominal activities.

_____ 33. Each of the following are expenses except

cost of inventory sold.
dividends.
interest.
salaries.




____ 34. The purchase of inventory in account is considered a (an)

buying activity.
financing activity
investing activity.
operating activity.

____ 35. The difference between sales revenue and cost of goods sold is

gross profit.
net income.
operating profit.
retained earnings.

____ 36. The costs incurred in acquiring plant and equipment should be expensed

in the period the asset is acquired.
in the period the asset is paid for.
during the last year the asset is used.
over the life of the asset.

____ 37. Depreciation expense on an asset is computed using each of the following
except the asset’s

market value.
original cost.
salvage value.
useful life.

____ 38. The presentation of an accumulated depreciation account is helpful to financial statement users in all of the following ways except to:

estimate how close the asset is to being fully depreciated.
observe the original cost of the asset.
determine the market value of the asset.
estimate the years remaining in the asset’s useful life.

_____ 39. Paying interest should be classified as a (an)

borrowing activity.
financing activity.
investing activity.
operating activity.



_____ 40. The entries that accomplish the transfer of balances from revenue and
expense accounts to retained earnings are called

adjusting entries.
closing entries.
nominal entries.
temporary entries.

CHAPTER 4
FINANCIAL STATEMENTS: INCOME
MEASUREMENT AND REPORTING
REQUIRED: For each of the following items, indicate whether it is True or False, by placing a (T) or (F) in the space provided.

__T____ 1. Firms use accrual-basis accounting because it provides information about future cash flows that is not available under the cash method.

______ 2. The relevance criteria states that information about an item is representational, faithful, verifiable and neutral.

______ 3. Revenue recognition refers to the point in time at which revenue should be reported on the statement of earnings.

______ 4. The matching concept requires that firms recognize both the revenue, and the costs required to produce the revenue (expenses) when cash is received and paid.

______ 5. A deferred expense represents an obligation to provide goods or services to customers in the future.

______ 6. Income statements that provide greater detail and breakdown of costs by category are referred to as multiple step.

______ 7. GAAP requires two items to be shown after the computation of tax expense: discontinued operations and extraordinary items.

______ 8. When both the value and the assurance of sale can be estimated at the time of production a firm recognizes revenue at that point.

______ 9. The cost recovery and completed contract methods are two examples of revenue recognition being postponed until the cash from a sale is collected.

______ 10. Comprehensive income is the change in equity of a firm due to transactions and other events and circumstances from nonowner sources.

Geeze, a lot of questions.

12) Dr. Cash, Cr. Common Stock (don't quote me on this one. It's been a while since I dealt with journal entries for selling capital shares)
13) Dr. Accounts Receivable, Dr. Cash, Cr. Sales
14) Dr. Equipment, Cr. Cash, Cr. Notes Payable
15) Retained Earnings
16) Cr. Inventory $55
17) Retained Earnings.
18) Sales.
19) Dr. Depreciation Expense, Cr. Accumulated Depreciation
20) improve the accuracy of a firm's financial statements. (I think.)
21) Dr. Sales Revenue, Cr. Income Summary (I am assuming your teacher wants you to do it that way… in practice, Dr. Sales Revenue, Cr. Retained Earnings works as well)
22) Dr. Income Summary, Cr. Administrative Expenses (same reason as 21)
23) Dr. Income Summary, Cr. Retained Earnings
24) Dividends distribute a portion of the profits to owners
25) quarterly and annually
26) a prospectus.
27) contra-asset account

That's enough for today. I'm tired.

Thanks for the help. Really appreciate the help Captain Forest.

Hi. I'm working on preparing consolidated financial statements for a homework assignment. I'm having some trouble though.

I found that there is a fair value vs. book value difference in my inventory account of 75,000 at the date of acquisition, March 1st. I am also told that the inventory account has a life of 5 months at the date of acquisition. This indicates that, at December 31st, the amount in inventory would be moved to COGS. I am not sure, however, as to what journal entries I have to make to account for the 75,000 FV/BV difference that is not accounted for in COGS. My assumption is to debit COGS and credit Equity in Sub.'s Earnings, but I am not sure.

Also, since the life of the inventory has already run out, should I still include an adjustment entry:
Debit Inventory
Credit: Investment in Sub.
to account for the 75,000? If so, does another entry have to be made to eliminate the 75,000 from Investment in Sub. To zero out the account?

I don't do consolidated stuff (advanced junk I don't remember) so I can't answer your question.

I just wanted to ask you to please post your question on your own new thread instead of tagging onto someone else's. It's a very old thread, it's not the same subject, and we'd also never survive if everyone just tacked onto other people's threads all the time.

2) AP Ltd. Is trying to evaluate 4 new projects. Assume all the 4 projects have a useful life of 10 years. The projects are mutually exclusive and some of their details are as follows':

Project Annual net cash flow Initial investment Cost of capital IRR NPV
1 £100,000 £449,400 14% A B
2 £70,00 C 14% 20% D
3 E £200,000 F 14% £35,624
4 G £300,000 12% H £39,000

2) AP Ltd. Is trying to evaluate 4 new projects. Assume all the 4 projects have a useful life of 10 years. The projects are mutually exclusive and some of their details are as follows':

Project Annual net cash flow Initial investment Cost of capital IRR NPV
1 £100,000 £449,400 14% A B
2 £70,00 C 14% 20% D
3 E £200,000 F 14% £35,624
4 G £300,000 12% H £39,000

nithen_ks, did you bother to read the thread you're tagging onto. Read my post above yours.

Then when you've finished with that, read our guidelines about posting homework problems.

Can some mod please lock this thread? I'm getting a little sick of scrolling clear through that long thing up there just to find something else entirely.

All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorship's. Further, it is agreed that John will invest additional $3,500 in cash, and Calvin will invest an additional $16,000 in cash.
Instructions
(a) Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilites to the partnership.
(b) Journalize the additional cash investment by each each partner.
(c) Prepare a classified balance sheet for the partnership on January 1, 2010.

I just know when assets increase, they go on debit side but when they decrease they go on credit side.

for a recent year, barnes & noble's inc.reported property,plant, and equipment of $2,400,685,000 and accumulated depreciation of $1,576,052.000.

a. what was the book value of the fixed assets?
b. would the book values of barnes and noble's fixed assets normally approximate their fair market values?

! It is better to ask a direct question yourself than to tack your question on to an old thread

1.The book value is the written down value
2.This is for the Board to determine it will depend on the age, nature and obsolence of the assets

Leeward Corporation
Income Statement
Horizontal Analysis

2006 2005 Change Percent
Revenues $2,500,000 $2,500,000
Expenses
Cost of goods sold $1,080,000 $1,750,000
Selling & administrative expense $495,000 $500,000
Interest expense $30,000 $30,000
Total Expenses $1,605,000 $2,280,000
Income before income taxes $895,000 $220,000
Income tax expense $268,500 $66,000
Net Income $626,500 $154,000