26. The Income Summary account is used: (Points : 2)To adjust and update asset and liability account

 
   

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26. The Income Summary account is used: (Points : 2)To adjust and update asset and liability accountsTo close the revenue and expense accountsTo determine the appropriate dividend amountIn some situations to replace the income statementTo replace the retained earnings account in some businesses27. A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies remained. How much should the company report as office supplies expense for the year? (Points : 2)$75$125$175$250$32528. A trial balance prepared after adjustments have been recorded is called a(n): (Points : 2)Balance sheetAdjusted trial balanceUnadjusted trial balanceClassified balance sheetUnclassified balance sheet29. The accrual basis of accounting: (Points : 2)Is generally accepted for external reporting since it is more useful for most business decisionsIs flawed because it gives complete information about cash flowsRecognizes revenues when received in cashRecognizes expenses when paid in cashEliminates the need for adjusting entries at the end of each period30. The main purpose of adjusting entries is to: (Points : 2)Record external transactions and eventsRecord internal transactions and eventsRecognize assets purchased during the periodRecognize debts paid during the periodCorrect errors31. Multiple-step income statements: (Points : 2)Are required by the FASBContain more detail than a simple listing of revenues and expensesAre required for the perpetual inventory systemList cost of goods sold as an operating expenseCan only be used in perpetual inventory systems32. The full disclosure principle: (Points : 2)Requires that when a change in inventory valuation method is made, the notes to the financial statements report the type of change, why it was made and its effect on net incomeRequires that companies use the same accounting method for inventory valuation period after periodIs not subject to the materiality principleIs only applied to retailersIs also called the consistency principle33. A company purchased $4,000 worth of merchandise. Transportation costs were an additional $350. The company later returned $275 worth of merchandise and paid the invoice within the 2% cash discount period. The total amount paid for this merchandise is: (Points : 2)$3,725.00$3,925.00$3,995.00$4,000.50$4,075.0034. A company had expenses other than cost of goods sold of $51,000. Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000. (Points : 2)Sales: $136,000; Gross Profit: $111,000Sales: $136,000; Gross Profit: $85,000Sales: $85,000; Gross Profit: $136,000Sales: $111,000; Gross Profit: $136,000Sales: $60,000; Gross Profit: $25,00035. Days’ sales in inventory: (Points : 2)Is also called days’ stock on handFocuses on average inventory rather than ending inventoryIs used to measure solvencyIs calculated by dividing cost of goods sold by ending inventoryIs a substitute for the acid-test ratio36. Our company has three times as many assets as it does liabilities. If total liabilities are $55,000, what is the amount of owners’ equity? (Points : 2)$55,000$110,000$165,000$220,000Cannot be determined from the given information37. A remittance advice is: (Points : 2)An explanation for a payment by checkA bank statementA voucherAn EFTA cancelled check38. The impact of technology on internal controls includes which of the following: (Points : 2)Reduced processing errorsElimination of the need for regular auditsElimination of the need to bond employeesMore efficient separation of dutiesElimination of fraud39. A company had $43 missing from petty cash which was not accounted for by petty cash receipts. The correct procedure is to: (Points : 2)Debit Cash Over and Short for $43Credit Cash Over and Short for $43Debit Petty Cash for $43Credit Petty Cash for $43Credit Cash for $4340. Toys “R” Us had cost of goods sold of $9,421 million, ending inventory of $2,089 million and average inventory of $1,965 million. The inventory turnover equals: (Points : 2)0.214.514.7976.1 days80.9 days41. Cash equivalents: (Points : 2)Are short-term, highly liquid investmentsInclude 6-month CDsInclude checking accountsAre recorded in petty cashInclude money orders42. Which inventory valuation method assigns a value to the inventory on the balance sheet that approximates current cost and also mimics the actual flow of goods for most businesses? (Points : 2)FIFOWeighted averageLIFOSpecific identificationFirst In Still Here43. A seller of goods or services, usually a manufacturer or wholesaler is known as a: (Points : 2)VendorPayeeVendeeCreditorDebtor44. A company has inventory of 10 units at a cost of $10 each on June 1. On June 3, they purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO periodic inventory method, what is the cost of the 12 units that were sold? (Points : 2)$120$124$128$130$14045. A company purchased $1,800 of merchandise on December 5. On December 7, it returned $200 worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals: (Points : 2)$200$1,564$1,568$1,600$1,80046. The conservatism principle: (Points : 2)Requires that when there are more than one equally likely estimate of amounts expected to be received or paid in the future, then the less optimistic amount should be usedRequires that a company use the same accounting methods period after periodRequires that revenues and expenses be reported in the period in which they are earned or incurredRequires that all items of a material nature be included in financial statementsRequires that all inventory items be reported at full cost47. A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000,net income totaled $263,500, and cost of goods sold of $420,000. What is the net sales amount for the period? (Points : 2)$1,500,000$1,275,000$1,725,000$1,521,000$1,479,00048. ABC Corporation had total quick assets $5,888,000, current assets $11,700,000 and current liabilities $8,000,000. Its acid-test ratio equals: (Points : 2)0.500.680.741.502.2049. A company has inventory of 15 units at a cost of $12 each on August 1. On August 5, they purchased 10 units at $13 per unit. On August 12 they purchased 20 units at $14 per unit. On August 15, they sold 30 units. Using the FIFO periodic inventory method, what is the value of the inventory at August 15 after the sale? (Points : 2)$140$160$210$380$59050. Which of the following is the most serious limitation of internal controls? (Points : 2)Computer errorHuman fraud or human errorCost-benefit principleCybercrimeManagement fraud