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10 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Matthew Company purchases a trading security for $12,000 cash. The journal entry to record this transaction will include a: |
A. debit to the Investment in Trading Securities account and a credit to Cash. B. debit to Long-term Investment and credit Cash. C. debit to Cash and a credit to the Investment in Trading Securities account. D. debit to Dividend Revenue and credit to Cash. |
A |
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When a company receives a cash dividend from a trading security, the journal entry includes: |
A. a debit to Cash and credit to Dividend Revenue. B. a debit to Cash and credit to Investment in Trading Securities. C. a debit to Investment in Trading Securities and credit to Cash. D. a debit to Dividend Revenue and credit to Cash. |
A |
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A company's trading security has a fair value which exceeds its cost. When recording the journal entry: |
A. the Investment in Trading Securities account will be credited. B. the Unrealized Loss on Trading Securities account will be debited. C. the Unrealized Gain on Trading Securities account will be credited. D. the Gain on Treasury Securities will be credited. |
C |
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Michael Company purchased a trading investment that had a carrying amount of $35,300 when they decided to sell it. Michael Company purchased the investment for $31,600. If Michael Company sold this investment for $45,200, Michael will have a(n): |
A. Gain on Sale of Trading Security for $9900. B. Unrealized Loss on Trading Security of $3700.C. Unrealized Gain on Trading Security of $13,600. D. Gain on Sale of Trading Security for $13,600. |
A 45,200 - 35,300 = 9900 gain |
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Investments in trading securities: |
A. are more liquid than cash. B. are reported at fair value on the balance sheet. C. are reported after accounts receivable on the balance sheet. D. are reported at historical cost on the balance sheet. |
B |
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A company has gross revenue of $505,000; sales discounts of $2700; and sales returns and allowances of $3000. Net revenue is: |
A. $502,000. B. $502,300. C. $505,000. D. $499,300. |
D 505,000 - 2700 - 3000 = 499,300 |
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On December 1, Macy Company sold merchandise with a selling price of $1000 on account to Mrs. Jorgensen, with terms 2/10, n/30. Ignoring Cost of Goods Sold, what journal entry did Macy Company prepare on December 1? |
A. Debit Cash for $1000 and credit Accounts Receivable for $1000. B. Debit Accounts Receivable for $1000 and credit Cash for $1000. C. Debit Sales Revenue for $1000 and credit Accounts Receivable for $1000. D. Debit Accounts Receivable for $1000 and credit Sales Revenue for $1000. |
D |
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If a buyer takes advantage of a sales discount, the journal entry recorded by the seller will include a(n): |
A. debit to Cash and credit to Accounts Receivable. B. debit to Cash, credit to Sales Discount and credit to Accounts Receivable. C. debit to Cash, debit to Sales Returns and Allowances and credit to Accounts Receivable.D. debit to Cash, debit to Sales Discount and credit to Accounts Receivable. |
D |
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A business offers credit terms of 2/15, n/30. These terms indicate that: |
A. the total amount of the invoice must be paid within 15 days of the invoice date. B. no discount is offered for early payment. C. a discount of 2% can be taken if the invoice is paid within 15 days of the invoice date. D. the buyer can take a 2% discount if the bill is paid within 30 days of the invoice date. |
C |
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The following account balances were extracted from the accounting records of Thomas Corporation at the end of the year:
Accounts Receivable $1,100,000 Allowance for Uncollectible Accounts (Credit) $37,000 Uncollectible-Account Expense $63,000 What is the net realizable value of the accounts receivable? |
A. $1,137,000 B. $1,063,000 C. $1,100,000 D. $1,163,000 |
B $1,100,000 - $37,000 = 1,063,000 |
