FULL TEST BANK FOR INTERMEDIATE
ACCOUNTING, 3RD EDITION | AUTHORS:
ELIZABETH A. GORDON, JANA S. RAEDY,
ALEXANDER J. SANNELLA
◉ Cash dividends paid to the stockholders will Answer: decrease
assets and decrease stockholders' equity
◉ A business purchases a truck by signing a note payable to the
seller. Such a transaction would include a: Answer: credit to Note
Payable
◉ The closing entry for utilities expense would include: Answer: a
debit to Income Summary and a credit to Utilities Expense
◉ Where would "Sales Returns and Allowances" be included on a
multiple step income statement? Answer: As part of Net Sales
◉ Given the following data, calculate the cost of ending inventory
using the LIFO costing method: (Refer to Test Bank) Answer: $535
◉ FIFO tends to decrease taxes when: Answer: costs are decreasing
, ◉ Each of the following items affect the cash balance per books
except: Answer: outstanding checks
◉ A company uses the percentage-of-receivables method of
accounting for uncollectables. The yearend accounts receivable are
$225,000 and 2% are estimated uncollectible. The Allowance for
Doubtful Accounts prior to adjustment has a debt balance of $1,400.
The amount of the adjusting entry is: Answer: B. $3,100
◉ The Mitchell Global Company accepts a note in exchange for the
sale of goods. The journal entry on Mitchell Global Company
includes a: Answer: credit to Sales
◉ The cost of a long-term asset is expensed Answer: as the asset
benefits the company
◉ Equipment costing $40,000 with a salvage value of $8,000 and an
estimated life of 8 years has been depreciated using the straight-line
method for 2 years. Assuming a revised estimated total life of 6
years __ change in the salvage value, the depreciated expense for the
year should be Answer: $6,000
◉ A truck costing $30,000 and on which $26,000 of accumulated
depreciation has been recorded was discarded as having no value.
The entry to record this event would include a Answer: loss of $4000
ACCOUNTING, 3RD EDITION | AUTHORS:
ELIZABETH A. GORDON, JANA S. RAEDY,
ALEXANDER J. SANNELLA
◉ Cash dividends paid to the stockholders will Answer: decrease
assets and decrease stockholders' equity
◉ A business purchases a truck by signing a note payable to the
seller. Such a transaction would include a: Answer: credit to Note
Payable
◉ The closing entry for utilities expense would include: Answer: a
debit to Income Summary and a credit to Utilities Expense
◉ Where would "Sales Returns and Allowances" be included on a
multiple step income statement? Answer: As part of Net Sales
◉ Given the following data, calculate the cost of ending inventory
using the LIFO costing method: (Refer to Test Bank) Answer: $535
◉ FIFO tends to decrease taxes when: Answer: costs are decreasing
, ◉ Each of the following items affect the cash balance per books
except: Answer: outstanding checks
◉ A company uses the percentage-of-receivables method of
accounting for uncollectables. The yearend accounts receivable are
$225,000 and 2% are estimated uncollectible. The Allowance for
Doubtful Accounts prior to adjustment has a debt balance of $1,400.
The amount of the adjusting entry is: Answer: B. $3,100
◉ The Mitchell Global Company accepts a note in exchange for the
sale of goods. The journal entry on Mitchell Global Company
includes a: Answer: credit to Sales
◉ The cost of a long-term asset is expensed Answer: as the asset
benefits the company
◉ Equipment costing $40,000 with a salvage value of $8,000 and an
estimated life of 8 years has been depreciated using the straight-line
method for 2 years. Assuming a revised estimated total life of 6
years __ change in the salvage value, the depreciated expense for the
year should be Answer: $6,000
◉ A truck costing $30,000 and on which $26,000 of accumulated
depreciation has been recorded was discarded as having no value.
The entry to record this event would include a Answer: loss of $4000
