ACCT 2010 Final Exam Review with
Complete Solutions
Assets are usually reported at their what? - ANSWER-historical cost
A major purpose of preparing closing entries is to? - ANSWER-update the retained
earnings account
On January 1 of the current year Ariel Company paid $1,500 in rent to cover six months.
Ariel recorded this transaction as follows. Ariel adjusts the accounts at the end of each
month. Ariel's adjusting entry at the end of february should include a debit to rent
expense in the amount of what? - ANSWER-prepaid rent/total months paid=month rent
expense so
1,500/6=250
A bank statement included a NSF check from customer Kim Fields for $2,100. The
journal entry to record this reconciling item should: - ANSWER-Debit Accounts
receivable and credit cash for $2,100
The ending bank statement balance at November 30 is $6,850. The bank statement
shows a service charge of $85, electronic funds receipts of $500, and a NSF check for
$350. Deposits in transit total $2,350 and outstanding checks are $1,535. The balance
per books at November 30 is $7,600. What is the adjusted bank balance at November
30? - ANSWER-DOB
bank ending balance+ deposits in transit-outstanding checks
6850+2350-1535
Under the allowance method for uncollectible receivables, the entry to record
uncollectible-account expense has what effect on the financial statements? - ANSWER-
Decreases net income and decreases assets
Company uses the percent-of-sales method to estimate uncollectibles. Net credit sales
for the current year amount to
$130,000,
and management estimates
1%
will be uncollectible. The amount of expense to report on the income statement was
$1,300.
The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of
$2,000.
, The balance of Allowance for Uncollectible Accounts, after adjustment, will be -
ANSWER-unadjusted allowance for uncollectible account+uncollectible-account
expense=adjusted allowance for uncollectible accounts
2000+1300=3300
Jumpin Corporation uses the
percent−of−sales
method to estimate uncollectibles. Net credit sales for the current year amount to
$2,040,000, and management estimates 5% will be uncollectible. The Allowance for
Uncollectible Accounts prior to adjustment has a debit balance of $1,100. The amount
of
Uncollectible−Account
Expense reported on the income statement will be - ANSWER-net credit sales x the
percentage for uncollectible
2040000*.05=102000
Jensen Corporation uses the
percentage−of−sales
method to estimate uncollectibles. Net credit sales for the current year amount to
$2,013,000 and management estimates 2% will be uncollectible. The Allowance for
Doubtful Accounts prior to adjustment has a debit balance of $21,000. After all adjusting
entries are made, the balance in Allowance for Uncollectible Accounts will be -
ANSWER-net credit sales x percentage of uncollectible-debit balance
2013000*.02-21000=19260
Lennon Company signed a
12−month,
$51,000,
10%
note on June 1, 2023. The amount of interest to be accrued on December 31, 2023, is:
(Round your final answer to the nearest dollar.) - ANSWER-take month amount x note
percentage/12 and x by months mentioned in this case 7
51,000x.1/12*7=2975
The maturity value of a
4−month,
10%
note for
$35,000,
dated May 12 is - ANSWER-36166.67
Complete Solutions
Assets are usually reported at their what? - ANSWER-historical cost
A major purpose of preparing closing entries is to? - ANSWER-update the retained
earnings account
On January 1 of the current year Ariel Company paid $1,500 in rent to cover six months.
Ariel recorded this transaction as follows. Ariel adjusts the accounts at the end of each
month. Ariel's adjusting entry at the end of february should include a debit to rent
expense in the amount of what? - ANSWER-prepaid rent/total months paid=month rent
expense so
1,500/6=250
A bank statement included a NSF check from customer Kim Fields for $2,100. The
journal entry to record this reconciling item should: - ANSWER-Debit Accounts
receivable and credit cash for $2,100
The ending bank statement balance at November 30 is $6,850. The bank statement
shows a service charge of $85, electronic funds receipts of $500, and a NSF check for
$350. Deposits in transit total $2,350 and outstanding checks are $1,535. The balance
per books at November 30 is $7,600. What is the adjusted bank balance at November
30? - ANSWER-DOB
bank ending balance+ deposits in transit-outstanding checks
6850+2350-1535
Under the allowance method for uncollectible receivables, the entry to record
uncollectible-account expense has what effect on the financial statements? - ANSWER-
Decreases net income and decreases assets
Company uses the percent-of-sales method to estimate uncollectibles. Net credit sales
for the current year amount to
$130,000,
and management estimates
1%
will be uncollectible. The amount of expense to report on the income statement was
$1,300.
The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of
$2,000.
, The balance of Allowance for Uncollectible Accounts, after adjustment, will be -
ANSWER-unadjusted allowance for uncollectible account+uncollectible-account
expense=adjusted allowance for uncollectible accounts
2000+1300=3300
Jumpin Corporation uses the
percent−of−sales
method to estimate uncollectibles. Net credit sales for the current year amount to
$2,040,000, and management estimates 5% will be uncollectible. The Allowance for
Uncollectible Accounts prior to adjustment has a debit balance of $1,100. The amount
of
Uncollectible−Account
Expense reported on the income statement will be - ANSWER-net credit sales x the
percentage for uncollectible
2040000*.05=102000
Jensen Corporation uses the
percentage−of−sales
method to estimate uncollectibles. Net credit sales for the current year amount to
$2,013,000 and management estimates 2% will be uncollectible. The Allowance for
Doubtful Accounts prior to adjustment has a debit balance of $21,000. After all adjusting
entries are made, the balance in Allowance for Uncollectible Accounts will be -
ANSWER-net credit sales x percentage of uncollectible-debit balance
2013000*.02-21000=19260
Lennon Company signed a
12−month,
$51,000,
10%
note on June 1, 2023. The amount of interest to be accrued on December 31, 2023, is:
(Round your final answer to the nearest dollar.) - ANSWER-take month amount x note
percentage/12 and x by months mentioned in this case 7
51,000x.1/12*7=2975
The maturity value of a
4−month,
10%
note for
$35,000,
dated May 12 is - ANSWER-36166.67
