Intro to Financial Accounting Exam 4
Questions With Solutions 100% Correct
Which of the following accounts is increased with a debit? Dividends.
If a company issues common stock for $40,000 and issues a note payable for $30,000, the
company's... total assets will increase by $70,000.
Which of the following is the correct sequence of events in the recording process?
Analyze a transaction; record it in the journal; post it to the ledger.
Posting... transfers journal entries to ledger accounts.
On December 31, a company's prepaid insurance account had a balance of $2,700 before
recording adjusting entries. The company's determined that $1,500 of the prepaid insurance had
expired before year-end. The insurance expense for the year would be... $1,500.
A company borrowed money from a bank by signing a three-year note payable in the amount of
$15,000 on July 1. The note requires the company to pay interest at an annual rate of 8%. The
company records adjusting entries on December 31. The adjusting entry that the company should
, Intro to Financial Accounting Exam 4
Questions With Solutions 100% Correct
record for accrued interest on December 31 of the same year would include a debit to interest
expense for... $600.
Companies prepare various types of trial balances. Which trial balance likely lists the smallest
number of accounts for a given company? The post-closing trial balance.
The following ratios are available for Alpha Inc. and Omega Inc.
Alpha Inc. Omega Inc. Current ratio 1.2 1.5Profit margin ratio 0.30 0.20
Compared to Omega Inc., Alpha Inc. has... lower liquidity.
A company uses a perpetual inventory system. On December 10, the company bought inventory
for $3,000. It is the only item of inventory it owns. On December 29, it sells the inventory for
$5,500 on account with terms 2/10 n/30. The company's customer pays for the inventory on
January 3. Which of the following is recorded by the company on December 29? Credit
inventory for $3,000.
The journal entry to record the receipt of payment within the discount period on a sale of $900
with terms of 2/10, n/30 will include a... debit to Sales Discounts for $18.
, Intro to Financial Accounting Exam 4
Questions With Solutions 100% Correct
Indicate which one of the following would not appear on both a single-step income statement
and a multiple-step income statement. Gross profit.
A company's gross profit rate is lower this year compared to the prior year. Which of the
following would not be a possible cause for this decline in the gross profit rate? The
company began selling products with a higher markup.
When terms are FOB shipping point... ownership of the goods passes to the buyer when
the public carrier accepts the goods from the seller.
A company has the following:
Sales revenue, $475,000
Beginning inventory, $80,000
Ending inventory, $110,000
Cost of goods sold, $285,000
Net income, $50,000
What is its days' sales in inventory? 140.9 days.
, Intro to Financial Accounting Exam 4
Questions With Solutions 100% Correct
A company uses the periodic inventory method. An understatement of ending inventory in one
period results in... an overstatement of net income of the next period.
Which one of the following is not a physical control? Segregation of duties.
A company has the following information:
Cash balance per bank, Dec. 31, $11,500
Outstanding checks, $700
Deposits in transit, $1,375
Credit memo for interest, $25
Bank service charge, $50
What is the company's adjusted cash balance on Dec. 31? $12,175.
If a company correctly wrote a check for $491 but it incorrectly recorded the check as $419 on
its books, the appropriate treatment on the bank reconciliation would be to... subtract $72
from the cash balance per books.
Questions With Solutions 100% Correct
Which of the following accounts is increased with a debit? Dividends.
If a company issues common stock for $40,000 and issues a note payable for $30,000, the
company's... total assets will increase by $70,000.
Which of the following is the correct sequence of events in the recording process?
Analyze a transaction; record it in the journal; post it to the ledger.
Posting... transfers journal entries to ledger accounts.
On December 31, a company's prepaid insurance account had a balance of $2,700 before
recording adjusting entries. The company's determined that $1,500 of the prepaid insurance had
expired before year-end. The insurance expense for the year would be... $1,500.
A company borrowed money from a bank by signing a three-year note payable in the amount of
$15,000 on July 1. The note requires the company to pay interest at an annual rate of 8%. The
company records adjusting entries on December 31. The adjusting entry that the company should
, Intro to Financial Accounting Exam 4
Questions With Solutions 100% Correct
record for accrued interest on December 31 of the same year would include a debit to interest
expense for... $600.
Companies prepare various types of trial balances. Which trial balance likely lists the smallest
number of accounts for a given company? The post-closing trial balance.
The following ratios are available for Alpha Inc. and Omega Inc.
Alpha Inc. Omega Inc. Current ratio 1.2 1.5Profit margin ratio 0.30 0.20
Compared to Omega Inc., Alpha Inc. has... lower liquidity.
A company uses a perpetual inventory system. On December 10, the company bought inventory
for $3,000. It is the only item of inventory it owns. On December 29, it sells the inventory for
$5,500 on account with terms 2/10 n/30. The company's customer pays for the inventory on
January 3. Which of the following is recorded by the company on December 29? Credit
inventory for $3,000.
The journal entry to record the receipt of payment within the discount period on a sale of $900
with terms of 2/10, n/30 will include a... debit to Sales Discounts for $18.
, Intro to Financial Accounting Exam 4
Questions With Solutions 100% Correct
Indicate which one of the following would not appear on both a single-step income statement
and a multiple-step income statement. Gross profit.
A company's gross profit rate is lower this year compared to the prior year. Which of the
following would not be a possible cause for this decline in the gross profit rate? The
company began selling products with a higher markup.
When terms are FOB shipping point... ownership of the goods passes to the buyer when
the public carrier accepts the goods from the seller.
A company has the following:
Sales revenue, $475,000
Beginning inventory, $80,000
Ending inventory, $110,000
Cost of goods sold, $285,000
Net income, $50,000
What is its days' sales in inventory? 140.9 days.
, Intro to Financial Accounting Exam 4
Questions With Solutions 100% Correct
A company uses the periodic inventory method. An understatement of ending inventory in one
period results in... an overstatement of net income of the next period.
Which one of the following is not a physical control? Segregation of duties.
A company has the following information:
Cash balance per bank, Dec. 31, $11,500
Outstanding checks, $700
Deposits in transit, $1,375
Credit memo for interest, $25
Bank service charge, $50
What is the company's adjusted cash balance on Dec. 31? $12,175.
If a company correctly wrote a check for $491 but it incorrectly recorded the check as $419 on
its books, the appropriate treatment on the bank reconciliation would be to... subtract $72
from the cash balance per books.
