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.

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

Accounts Receivable.
Depreciation Expense.

_____ 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 firmís 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

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.

_____ 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.

____ 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 assetís

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 assetís 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.

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.