Acct220: Principles of Accounting I

cct220: Ideas of Accounting IFor this examination, omit all basic journal entry explanations.Query 1: Urged time 20 minutes: 15% factors:The account balances showing on the trial steadiness (beneath) had been taken from the final ledger of Flip’s Copy Store at June 30, 2012.Further info for the month of June which has not but been recorded within the accounts is as follows:(a) A bodily depend of provides signifies $300 readily available at June 30.(b) The quantity of insurance coverage that expired within the month of June was $200.(c) Depreciation on tools for June was $400.(d) Lease owed on the copy store for the month of June was $600 however won’t be paid till July.Flip’s Copy ShopTrial BalanceFor the Month Ended June 30, 2012Account TitlesDebitCreditCash$1,000Supplies1,100Pay as you go Insurance2,200Tools24,000Accum. Depreciation— Tools$four,500Accounts Payable2,400Notes Payable4,000Flip’s Capital15,300Flip’s Drawings2,400Service Revenue4,900Utilities Expense400Totals$31,100$31,100Directions: Put together in journal kind, with out explanations, the top of month adjusting entries & closing entries for Flip’s Copy Store for the month of June.Acct220a Web page 1 of 9Question 2: Urged time 15 minutes: 15% factors:The next objects had been taken from the publish adjusted trial steadiness of Flip Firm. (All balances are regular.)Mortgage payable $ 1,443 Collected depreciation three,655Pay as you go bills 880 Accounts payable 1,444Tools 11,000 Notes payable after 2015 1,200Lengthy-term investments 1,100 Flip’s capital 13,480Brief-term investments three,690 Accounts receivable 1,696Notes payable in 2014 1,000 Inventories 1,756Money 2,100Directions: Put together a categorized steadiness sheet in good kind as of December 31, 2013.Query three: Urged time 15 minutes: 15% factors:The next info is accessible for Flip Firm:Starting stock 600 items at $4First buy 900 items at $6Second buy 500 items at $7.20Assume that Flip makes use of a periodic stock system and that there are 700 items left on the finish of the month.Directions: Compute the price of ending stock and Value of Good Bought below the(a) LIFO methodology.(b) FIFO methodology.(c) Common-cost methodAcct220a Web page 2 of 9Question four: Urged time 15 minutes: 10% factors:Put together journal entries to file the next transactions entered into by Flip Firm:2012June 1 Accepted a $10,000, 12%, 1-year observe from Flop as full fee on her account.Nov. 1 Bought merchandise on account to Flap, Inc. for $12,000, phrases 2/10, n/30.Nov. 5 Flap, Inc. returned merchandise price $500.Nov. 9 Acquired fee in full from Flap, Inc.Dec. 31 Accrued curiosity on Flop’s observe.2013June 1 Flop honored her promissory observe by sending the face quantity plus curiosity. No curiosity has been accrued in 2013Query 5: Urged time 20 minutes: 10% factors:Flip Firm bought tools on January 1, 2011 for $90,000. It’s estimated that the tools can have a $5,000 salvage worth on the finish of its 5-year helpful life. Additionally it is estimated that the tools will produce 100,000 items over its 5-year life.InstructionsAnswer the next unbiased questions.1. Compute the quantity of depreciation expense for the yr ended December 31, 2011, utilizing the straight-line methodology of depreciation.2. If 16,000 items of product are produced in 2011 and 24,000 items are produced in 2012, what’s the e-book worth of the tools at December 31, 2012? The corporate makes use of the units-of-activity depreciation methodology.three. If the corporate makes use of the double-declining-balance methodology of depreciation, what’s the steadiness of the Collected Depreciation—Tools account at December 31, 2013?Acct220a Web page three of 9Question 6: Urged time 10 minutes: 10% factors:Flip earns a wage of $7,500 per 30 days in the course of the yr. FICA taxes are eight% on the primary $100,000 of gross earnings. Federal unemployment insurance coverage taxes are 6.2% of the primary $7,000; nonetheless, a credit score is allowed equal to the state unemployment insurance coverage taxes of 5.four% on the $7,000. Throughout the yr, $25,600 was withheld for federal earnings taxes and $5,700 was withheld for state earnings taxes.Directions(a) Put together a journal entry summarizing the fee of Flip’s complete wage in the course of the yr.(b) Put together a journal entry summarizing the employer payroll tax expense on Flip’s wage for the yr.(c) Decide the price of using Flip for the yr.A number of selection questions allotted 1% level every. Make your choice by recording the letter within the reply field offered. Urged time is 60 minutes.Query 7: Which of the next are the identical below each GAAP and IFRS?a. The journal.b. The ledger.c. The chart of accounts.d. The entire above.e. Solely a & c.Query eight: Which of the next is true?a. Transaction evaluation is totally totally different below IFRS and GAAP.b. Most transactions are recorded in a different way below IFRS and GAAP.c. Transaction evaluation is identical below IFRS and GAAP, however some transactions are recorded in a different way.d. All transactions are recorded the identical below IFRS and GAAP.Query 9: Income recognition below IFRS isa. considerably totally different from income recognition below GAAP.b. usually the identical as income recognition below GAAP, however with extra detailed steerage.c. usually the identical as income recognition below GAAP, however with much less detailed steerage.d. precisely the identical as income recognition below GAAP.Acct220a Web page four of 9Question 10: Each IFRS and GAAP require disclosure abouta. accounting insurance policies adopted.b. judgements that administration has made within the technique of making use of the entity’s accounting insurance policies.c. the important thing assumptions and estimation uncertainty.d. all the above.e. solely b & c.Query 11: Using truthful worth to report assetsa. isn’t allowed below GAAP or IFRS.b. is required by GAAP and IFRS.c. is rising below GAAP and IFRS, however GAAP has adopted it extra broadly.d. is rising below GAAP and IFRS, however IFRS has adopted it extra broadly.Query 12: Closing entries are madea. with a view to terminate the enterprise as an working entity.b. so that every one property, liabilities, and proprietor’s capital accounts can have zero balances when the following accounting interval begins.c. with a view to switch internet earnings (or loss) and proprietor’s drawings to the proprietor’s capital account.d. in order that monetary statements could be ready.Query 13: Flip Firm bought merchandise from Flop Firm with freight phrases of FOB transport level. The freight prices will likely be paid by thea. vendor.b. purchaser.c. transportation firm.d. purchaser and the vendor.Query 14: A Gross sales Returns and Allowances account isn’t debited if a customera. returns faulty merchandise.b. receives a credit score for merchandise of inferior high quality.c. makes use of a immediate fee incentive.d. returns items that aren’t in accordance with specs.Query 15: Which of the next statements is inaccurate?a. A significant consideration in growing an accounting system is price effectiveness.b. When an accounting system is designed, no consideration must be given to the wants and information of the varied customers.c. The accounting system ought to be capable of accommodate a wide range of customers and altering info wants.d. To be helpful, info have to be comprehensible, related, dependable, well timed, and correct.Acct220a Web page 5 of 9Question 16: Flip is warehouse custodian and in addition maintains the accounting file of the stock held on the warehouse. An evaluation of this example indicatesa. documentation procedures are violated.b. unbiased inner verification is violated.c. segregation of duties is violated.d. institution of accountability is violated.Query 17: Money equivalents embrace every of the next excepta. financial institution certificates of deposit.b. cash market funds.c. petty money.d. U.S. Treasury payments.Query 18: Flip Firm is constructing a brand new plant that can take three years to assemble. The development will likely be financed partially by funds borrowed in the course of the development interval. There are vital architect charges, excavation charges, and constructing allow charges. Which of the next statements is true?a. Excavation charges are capitalized however constructing allow charges will not be.b. Architect charges are capitalized however constructing allow charges will not be.c. Curiosity is capitalized in the course of the development as a part of the price of the constructing.d. The capitalized price is the same as the contract value to construct the plant much less any curiosity on borrowed funds.Query 19: Depreciation is the method of allocating the price of a plant asset over its service life ina. an equal and equitable method.b. an accelerated and correct method.c. a scientific and rational method.d. a conservative market-based method.Query 20: Gross sales taxes collected by a retailer are expensesa. of the retailer.b. of the purchasers.c. of the federal government.d. that aren’t acknowledged by the retailer till they’re submitted to the federal government.Acct220a Web page 6 of 9Question 21: Flip’s Market recorded the next occasions involving a latest buy of merchandise:Acquired items for $50,000, phrases 2/10, n/30.Returned $1,000 of the cargo for credit score.Paid $250 freight on the cargo.Paid the bill inside the low cost interval.On account of these occasions, the company’s stock elevated bya. $48,zero20.b. $48,265.c. $48,270.d. $49,250.Query 22: A $100 petty money fund has money of $16 and receipts of $81. The journal entry to replenish the account would come with aa. debit to Money for $81.b. credit score to Petty Money for $84.c. debit to Money Over and Brief for $three.d. credit score to Money for $81.Query 23: In making ready its financial institution reconciliation for the month of April 2013, Flip, Inc. has accessible the next info.Steadiness per financial institution assertion, four/30/13 $39,300NSF test returned with four/30/13 financial institution assertion 470Deposits in transit, four/30/13 5,000Excellent checks, four/30/13 5,200Financial institution service fees for April 30What needs to be the adjusted money steadiness at April 30, 2013?a. $38,630.b. $38,800.c. $39,zero10.d. $39,100.Query 24: If a test appropriately written and paid by the financial institution for $591 is incorrectly recorded on the company’s books for $519, the suitable remedy on the financial institution reconciliation could be toa. deduct $72 from the book’s steadiness.b. add $72 to the book’s steadiness.c. deduct $72 from the bank’s steadiness.d. deduct $591 from the book’s steadiness.Acct220a Web page 7 of 9Question 25: Flip Firm had internet credit score gross sales in the course of the yr of $1,200,000 and price of products offered of $720,000. The steadiness in accounts receivable at the start of the yr was $180,000, and the top of the yr it was $120,000. What was the accounts receivable turnover ratio?a. 5.0b. 6.7c. eight.0d. 10.0Question 26: The monetary statements of Flip Manufacturing Firm report internet gross sales of $400,000 and accounts receivable of $80,000 and $40,000 at the start and finish of the yr, respectively. What’s the common assortment interval for accounts receivable in days?a. 40 daysb. 50 daysc. 54.7 daysd. 80 daysQuestion 27: Flip Firm purchases a brand new supply truck for $60,000. The gross sales taxes are $four,000. The brand of the corporate is painted on the facet of the truck for $1,600. The truck license is $160. The truck undergoes security testing for $290. What does Flip file as the price of the brand new truck?a. $66,zero50b. $65,890c. $64,000d. $65,600Query 28: An organization bought manufacturing facility tools on April 1, 2012 for $80,000. It’s estimated that the tools can have an $10,000 salvage worth on the finish of its 10-year helpful life. Utilizing the straight-line methodology of depreciation, the quantity to be recorded as depreciation expense at December 31, 2012 isa. $eight,000.b. $7,000.c. $5,250.d. $6,000.Query 29: Flip’s Boutique has complete receipts for the month of $30,660 together with gross sales taxes. If the gross sales tax price is 5%, what are Flip’s gross sales for the month?a. $29,127b. $29,200c. $32,193d. It can’t be decided.Acct220a Web page eight of 9Question 30: Flip Electrical started operations in 2012 and supplies a one yr guarantee on the merchandise it sells. They estimate that 10,000 of the 200,000 items offered in 2012 will likely be returned for repairs and that these repairs will price $eight per unit. The price of repairing eight,000 items introduced for service in 2012 was $64,000. Flip ought to reporta. guarantee expense of $16,000 for 2012.b. guarantee expense of $80,000 for 2012.c. guarantee legal responsibility of $80,000 on December 31, 2012.d. no guarantee obligation on December 31, 2012, since that is solely a contingent legal responsibility.Query 31: Companions Flip and Flop have capital balances in a partnership of $80,000 and $120,000, respectively. They comply with share earnings and losses as follows:Flip FlopAs salaries $20,000 $24,000As curiosity on capital at the start of the yr 10% 10%Remaining earnings or losses 50% 50%If earnings for the yr was $60,000, what would be the distribution of earnings to Flip?a. $26,000b. $34,000c. $20,000d. $28,000

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