Principles of Accounting I
1. Which of the following statements is not correct?
a. use of sales journal eliminates repetition in posting
b. a journal that is used to record only one type
c the sales slip is the source document for sales on credit transaction
d if the firm must collect sales on retail transaction the sales journal should have a sales tax payable debit Colum
2. A firm that uses special journals, the purchase of merchandise for 2,800, payable in 30 days, plus a freight charge of $140 is recorded in ____ journal.
a cash payment
b cash receipts
4. which is the following statement is not correct ?
a the amount to social security tax withheld depends on an employee’s gross earning, marital status, and number of withholding allowances
b federal law requires that social security, Medicare, and federal income taxes
c Medicare taxes are levied in an equal amount
d once an employee’s year-to-date wages reach a certain amount prescribed by the social security tax
6. In beginning capital balance shown on a statement of owner’s equity is 86,000. Net income for the period is 36,000. The owner withdrew 4,000 cash from the business and made no additional investments during the period. The owner’s capital balance at the end of the period is.
7. A firm reported net credit sales of 225,000 during the year and has a balance of 20,000 in its accounts receivable account at year end. Prior to adjustments.
c . 900
d . 2,250
8. On March 1, a firm purchase equipment for 5,000, signing a 30-day note bearing interest at 12 percent a year. the entry to record the payment of the amount due on MARCH 31 WILL INCLUDE:
a A debit to notes payable for 5,050 and a credit to cash for 5,050
b a debit to notes payable for 5,000 and a credit to cash for 5,000
c a debit to notes payable for 5,000, a debit to interest expense for $50, and a credit to cash for 5,050.
d. A debit to notes payable for 5,000, a debit to inters exposé for 600, ad credit to cash for 5,600.
9. The best matching of the most recent costs of merchandise inventory against current period revenue results front his use of the _____ method.
c average cost
d lower of cost or market method
10. Dom’s delivery purchase a van for 32,000. The transportation charges were 400, sales tax was 2,240. Special shelving was installed in the van for 4,300. In addition, Dom had the company name painted on the doors. this cost the company 1,250. The total cost of the van to record in the proper asset account is
. a 40,440
11. Kara Johnson and Tyler Jones are partners, and each has a capital balance of 100,000. To gain admission to the partnership, radian Nash pay 60,000 directly to Johnson for one-half of her equity. after the admin of Nash, the total partners equity in the records of partnership will
12. A corporation is owned by:
a the individual who started the company
b its board of directors
c the president of the corporation
d its stockholders.
13. The entry to record the issuance of 1,000 shares of 10 are-value common stock for 14 a share consists of a debit to cash for
a 14,000 and a credit to common stock for 14,000
b 10,000 and a credit to gain on sale of common stock for 4,000
c 14,000 and a credit to paid in capital in excess of par value common stock for 4,000 and a credit of 10,000 to common stock.
d 10,000 and a credit to treasury stock for 4,000.
14. Which of the following statement is correct?
a Market value is the figure selected by the organizers of the corporation to be assigned to each share of stock for account purchases
b if there is only one class of stock, the stock is called preferred stock.
c in the event of liquidation, preferred stockholders have claim on assets before that of common stockholders.
d none of this statement is correct.
15. Which of the following statements is correct?
Retained earnings do not represent a cash fund
b. A corporation can have a large cash balance in the retained earnings.
c A corporation can have a balance in the retained earnings account but no cash.
d. All of these statements are correct.
16. A corporation n reported a net income of 90,000 for its fiscal yr and declared and paid cash dividends of 60,000. A stock div recorded at 30,000 was also distributed during the yr. if the beginning balance of the retained earnings acct was 140,000 the ending balance is.
17. Kara Johnson and Tyler Jones are partners, and each has a capital balance of 100,000. 12. A corporation is owned by. 13. A corporation reported a net income of 90,0000 for its fiscal year and declared and paid cash dividends of 60,000.