Accounting Final

Front 1

A bond that can be bought back before maturity

Back 1

Callable Bond

Front 2

A bond only backed by good faith

Back 2

Debenture Bonds

Front 3

Two major accounting subjects are

Back 3

Managerial and Financial

Front 4

What could be included in cost of goods sold?

Back 4

Transportation cost

Front 5

When costs decrease

Back 5

LIFO tax exceeds FIFO

Front 6

Dividends are

Back 6

subtracted from long term investment.

Front 7

Accountants have

Back 7

developed principles

Front 8

When a customer returns merchandise

Back 8

assets decrease and equity decreases

Front 9

trial balance is

Back 9

not the same as balance sheet

Front 10

amoritization is straight line, what is interest expense?

Back 10

remains constant

Front 11

Three-Fourths into the year, what is on balance sheet?

Back 11

inventory on hand at that date

Front 12

when sale price exceeds cost of treasury stock

Back 12

credit contributed capital, treasury stock

Front 13

goodwill occurs when

Back 13

sale price exceeds market value

Front 14

Premium recieved in advance is classified as

Back 14

liability

Front 15

when you recognize revenue of a premium paid in advance

Back 15

liability goes down and equity goes up

Front 16

market adjustment for gains and losses on AFS

Back 16

goes to balance as unrealized gains and losses

Front 17

market adjustment for trading securities

Back 17

goes to income statement

Front 18

financial statements are made for

Back 18

investors and lenders

Front 19

sales returns and allowances, products sold more than cost

Back 19

assets decrease, equity decreases

Front 20

monetary unit principle

Back 20

the reason we use the dollar

Front 21

which is included in cost of good sold

Back 21

shipping

Front 22

which one violates the matching principle

Back 22

insurance paid for next year is recorded

Front 23

when shrinkage occurs what is effect on the acct. equation?

Back 23

assets decrease and equity decreases

Front 24

FASB

Back 24

sets the GAAP

Front 25

Common stock in accounts payable

Back 25

have some amounts of debits and credits

Front 26

example of an extraordinary item is

Back 26

government condemnation of anything

Front 27

which is not a type of investing activity

Back 27

bonds

Front 28

ending inventory overstated then

Back 28

COGS understated and Net income overstated

Front 29

when is there a factoring fee

Back 29

when you sell a notes recievable

Front 30

which is an investing activity

Back 30

equipment, plant assets, securities, collecting principals on loans

Front 31

which is a financing activity

Back 31

-issuing bonds and notes
-payments of dividends
-stock
-purchase treasury stock

Front 32

which is operating activity

Back 32

-interest
-recieving dividends
-taxes
-sales

Front 33

consolidated financial statements are used only when

Back 33

a company owns 50% or more of a company

Front 34

contingent liabilities that can be estimated and are reasonably possible goes on

Back 34

notes on financial statements

Front 35

dividends in arrears goes under

Back 35

disclosed under notes

Front 36

advantage of using a bond is

Back 36

bond interest expense is tax deductible

Front 37

accrued refers to an event that

Back 37

transaction where cash has not been exchanged

Front 38

when customers pay within the discount period

Back 38

debit cash, debit discount, and credit accounts receivable

Front 39

Fun Company purchases a machine for $18,000 on credit, and a month later makes a partial payment of $10,000 for
the machine. The overall result of the 2 transactions combined will cause:

Back 39

Total Liabilities to increase by $8,000

Front 40

If the liabilities of a business increased $92,000 during a period and the assets in the business increased $30,000 during the same period, the equities of the business must have:

Back 40

Decreased $62,000

Front 41

An internet retailer received an order from a customer on December 28, 2004, and shipped the merchandise on
January 2, 2005. If the company’s 2004 income statement included proceeds from this sale, which accounting principle was violated?

Back 41

Revenue Recognition principle

Front 42

Which of the following will not cause a trial balance to be out of balance?

Back 42

A credit entry is posted to the wrong account as a credit.

Front 43

Which pair of accounts has the same set of rules for debit and credit entries?

Back 43

Common stock and Unearned Revenue

Front 44

Henry Ford, a truck dealership, sells new trucks and pays each salesperson a commission of $2,000 for each truck sold. During the month of August 2005, a salesperson, Katrina, sold 3 new trucks. Henry Ford pays Katrina on the
10th day of the month following the sale. Katrina operates on the cash basis; Henry Ford operates on the accrual basis. Which of the following statements is true

Back 44

Henry Ford will recognize commission expense in the amount of $6,000 in August.

Front 45

The monthly payroll amount for Duffy Company is $100,000, and employees are paid the 15th day of every month. The last payday in 2004 was December 15th. If the accountant (NOT a UGA graduate) forgets to make the required adjusting entry on December 31, 2004 (the end of the accounting period), which of the following will be true for
Duffy’s 2004 financial statements?

Back 45

Total Equity will be overstated by $50,000

Front 46

Athens Fitness Center has 15,000 members in Athens whose monthly dues are $30 each. Athens Fitness does not
send individual bills to customers, who have until the 10th day of the following month to pay their monthly dues. On December 31, 2005, Athens Fitness’ records show that 6,000 customers have already paid their December dues. The adjusting entry to be recorded by Athens Fitness on December 31, 2005 will include

Back 46

A debit to Accounts Receivable of $270,000

Front 47

If a customer pays after the discount period, what is the seller's economic effect when they receive the payment?

Back 47

There is no effect.

Front 48

The seller’s journal entry to record a sales return (which is restored to inventory) would consist of:

Back 48

Debits to Sales Returns and Allowances and Inventory and Credits to Accounts Receivable and Cost of Goods Sold

Front 49

On January 15, Peach Wholesale Company (the seller) sold 100 cases of peaches to Kroger Company (the buyer) for $10 per case with terms of 2/10, n/30. On January 18, Kroger returned 20 cases of rotten peaches to Peach
Wholesale Company and received immediate credit. Peach Wholesale Company disposed of the rotten peaches. On January 22, Kroger Company paid Peach the amount due. Given this information, Peach’s journal entry on January 22 will include:

Back 49

A credit to Accounts Receivable of $800

Front 50

If ending inventory for the year ended December 31, 2004, is overstated by $25,000:

Back 50

net income for 2005 will be understated by $25,000

Front 51

When inventory prices are falling, using the LIFO costing method will generally result in a

Back 51

lower cost of goods sold than under FIFO

Front 52

If a company uses the allowance method to account for bad debts, when will the company's owners' equity decrease

Back 52

At the end of the accounting period when an adjusting entry for bad debts is recorded

Front 53

When a company uses the direct write-off method of accounting for bad debts

Back 53

it will record bad debts only when an account is determined to be uncollectible.

Front 54

Red Sox Company accepts VISA and MasterCard for payments of purchases made by customers. The credit card
drafts are deposited electronically in a bank account, and cash is received immediately on deposit. If a 3% collection
fee is charged by VISA and MasterCard, and credit card sales totaling $10,000 are recorded, the entry to record the sales and deposits will include

Back 54

a debit to Credit Card Expense for $300.

Front 55

Yankees Company received a promissory note from a customer on November 1, 2005. The face value of the note is
$8,000; the terms are 90 days and and the note carries 9% interest. The company’s accounting period ends on December 31. The journal entry on the books of Yankees Company on the maturity date will include a:

Back 55

Credit to Interest Receivable $120

Front 56

Angels Company traded an old delivery truck plus a cash payment of $35,000 for a new delivery truck. The old truck
had originally cost $30,000, and straight-line accumulated depreciation of $24,000 had been recorded as of the
exchange date under the assumption it would last ten years. The new delivery truck has a market value of $45,000. Angels Company’s journal entry in recording the exchange would include

Back 56

Credit to Delivery Truck (Old) for $30,000

Front 57

Where do gains or losses on sales of long-term assets appear in the financial statements?

Back 57

On the income statement, under Other gains and losses

Front 58

A $1,000 expenditure (paid in cash) was mistakenly treated as a capital expenditure, instead of as a revenue
expenditure. As a result,

Back 58

The Net Income for the period will be higher by $1,000

Front 59

On December 1, 2005, Augusta Company purchased $15,000 of equipment by issuing a 120-day, 10% note payable
to Bank of Georgia. The journal entry recorded by Augusta Company on the note maturity date will include:

Back 59

Debit to Interest Expense for $375

Front 60

Which of the following type of contingency would NOT be included in the financial statements including notes,
until it has been resolved?

Back 60

A lawsuit we have filed against a competitor and it is probable that we will win

Front 61

On January 1, 2005, Duckett Company borrowed $200,000 cash from a bank by signing a ten year installment note
bearing 7% interest. The note requires equal total payments each year on December 31. The journal entry to record
the second annual payment on December 31, 2006 will include a:

Back 61

debit to Interest Expense for $12,987

Front 62

On January 1, 2000, Vick Company issued $500,000 of 8%, 15 year bonds, at a price of 94. The bonds pay
semiannual interest on June 30 and December 31 of each year. Vick records the interest payments every six months
by amortizing the discount on bonds payable using the straight-line method. On Januray 1, 2005 Vick Company retires all of these bonds by buying them on the open market at a price of 97. The journal entry recorded by Vick Company on January 1, 2005 will include a:

Back 62

Loss on Bond Retirement of $5,000

Front 63

On January 1, Wildcats Company purchased 50,000 shares of common stock for $100,000 cash, and placed the
shares in the treasury. What impact will this transaction have on the accounting equation?

Back 63

decrease assets, no effect on liabilities, decrease stockholders’ equity

Front 64

Prior-period adjustments are:

Back 64

added to or deducted from the beginning balance of retained earnings

Front 65

Which of the following statements is false for a cash flow stament under the indirect method?

Back 65

The gain on the sale of the equipment would be added to net income in the operating activities section.