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29 Cards in this Set
- Front
- Back
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In preparing a cash budget how would you show estimated investments from owners? |
Estimated investments should be added to the beginning balance in arriving at the estimated ending cash balance. |
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In preparing a monthly bank reconciliation how would you show outstanding checks of $750? |
Outstanding checks should be subtracted from the bank side of the reconciliation. |
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In preparing a monthly bank reconciliation how would you show interst earned of $50 on your checking account? |
Interest earned should be added to the book side of the reconciliation. |
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In preparing a monthly bank reconciliation how would you show an error, made by the bookkeeper, in which a check was correctly written out for $54,465 but was incorrectly recorded in the books as $45,465? |
The amount of the error should be subtracted from the book side of the reconciliation. |
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What is the misappropriation of assets? |
The stealing of assets, by employees, and covering up the theft with the use of erroneous entries. The inefficient use of assets by employees. |
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In preparing a monthly bank reconciliation how would you show an error, made by the bookkeeper, in which a check was correctly written out for $23,478 but was incorrectly recorded in the books as $32,478? |
The amount of the error should be added to the book side of the reconciliation. |
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n preparing a monthly bank reconciliation how would you show bank service charges of $65? |
Service charges should be subtracted from the book side of the reconciliation. |
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In preparing a monthly bank reconciliation how would you show an electronic funds transfer from a customer to your bank account? |
The electronic funds transfer should be added to the book side of the reconciliation. |
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The president, of a medium size business, wants employees to pay closer attention to the operating budgets. In order to accomplish this goal she is requiring all divisional managers to document any variances from the operating budget in excess of 1.5% in either direction. This is an example of what type of internal control? |
Comparison and compliance monitoring |
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What do the authors, of the text, provide as the five components of internal controls? |
Control environment, control procedures, monitoring of controls, risk assessment, and information system |
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What is a Permanent Account? |
permanent accounts. Also referred to as real accounts. Accounts that do not close at the end of the accounting year. The permanent accounts are all of the balance sheet accounts (asset accounts, liability accounts, owner's equity accounts) except for the owner's drawing account. |
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On May 18, Tillmar Inc. received interest income from an investment it purchased 2 months ago. The investment was classified as a held-to-maturity security. What journal entry should be prepared to record the receipt of the interest income? |
Debit Cash, credit Interest Income - OCI |
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Stoltman Co. is preparing its financial statements for the year ended May 31. Stoltman Co. purchased an investment during the year which it classified as an available-for-sale security. During the year the investment increased in value. Assuming no adjusting entries have been made as of the end of the year, what is the necessary adjusting entry that must be made? |
Debit Unrealized Gain-OCI, credit Investment |
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What type of account is marketable securities? |
Equity - Revenue. Marketable securities are securities or debts that are to be sold or redeemed within a year. |
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Tobin Co. is preparing its financial statements for the year ended November 30. Tobin Co. purchased an investment during the year which it classified as a trading security. During the year the investment decreased in value. Assuming no adjusting entries have been made as of the end of the year, what is the necessary adjusting entry that must be made? |
Debit Unrealized Loss-OCI, credit Investment |
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Muilenburg Co. is preparing its financial statements for the year ended October 31. Muilenburg Co. purchased an investment during the year which it classified as a trading security. During the year the investment increased in value. Assuming no adjusting entries have been made as of the end of the year, what is the necessary adjusting entry that must be made? |
Debit Unrealized Gain-OCI, credit Investment |
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What type of account is allowance for bad debts? |
Contra-Asset |
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Williams Inc. collected $3,000 from a customer related to a prior sale made on account. How should Williams Inc. record the collection of $3,000? |
Debit Cash, credit Service Revenue |
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Kasper Co. is preparing its financial statements for the year ended January 31. Kasper Co. purchased an investment during the year which it classified as a held-to-maturity security. During the year the investment increased in value. Assuming no adjusting entries have been made as of the end of the year, what is the necessary adjusting entry that must be made? |
No adjusting entry is necessary. |
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Ulm Inc. has arranged with an important customer that the customer will pay $30,000 of the amount on account and that Ulm Inc. will write-off the remaining $15,000. How should this arrangement be recorded? |
Debit Doubtful Accounts Expense for $15,000 and credit Allowance for Doubtful Accounts for $15,000 |
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On February 28, Cox Inc. received a dividend from an investment it purchased 5 months ago. The investment was classified as an available-for-sale security. What journal entry should be prepared to record the receipt of the dividend? |
Debit Cash, credit Dividend Revenue - OCI |
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Wenzelow Co. purchased an investment for $75,000 which it classified as an available-for-sale security. During the year the investment decreased in value by $4,000. Each month the company prepared the necessary adjusting entries. Worried that the investment would continue to decrease in value Wenzelow Co. sold the investment for $70,000. What journal entry should be prepared to record the sale of the investment? |
Debit Cash, debit Loss on Sale of Investment, credit Unrealized Loss-OCI and credit Investment |
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How do you calculate company gross profit Percentage? |
Divide your gross profit by your total revenue generated |
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In accordance with GAAP, Inventory should be recorded in the financial statements at what amount? |
At the lower of its cost or market value. |
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How do you determine gross margin? |
Subtract cost of goods sold from sales. |
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On which financial statement(s) can you find cost of goods sold? |
Income Statement |
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What type of account is cost of goods sold? |
Equity - Expense |
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Which of the following best describes the disclosure principle in accounting? |
This principle holds that an entity's financial statements should provide enough information for investors to make informed decisions. |
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Look up Youtube Videos to see how to solve FIFO, LIFO, Average, Specific ID, inventory. |
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