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ACC 291T Apply Assignment Week 2 Connect Assignment
(August, 2019) (with Excel File)
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During March a firm purchased $22,790 of merchandise and paid freight
charges of $1,860. If the net delivered cost of purchases for the March is
$22,040, what is the total purchase returns for March?
Multiple Choice
•
$0
•
$1,110
•
$2,610
•
$3,720

A firm had purchases of $17,000, freight charges of $340, and purchases
returns and allowances of $1,500 during one month. Its net delivered
cost of purchases was:
Multiple Choice
•
$15,160.
•
$18,840.
•
$17,000.
•
$15,840.
Lewis Corporation engaged in the following transactions during June.
DATE TRANSACTIONS
2019
June 4 Purchased merchandise on account from Salinas
Company; Invoice 100 for $965; terms n/30.

15 Recorded purchases for cash, $1,450.
30 Paid amount due to Salinas Company for the
purchase on June 4.
Record these transactions in a general journal.
Record the following transactions of Fronke’s Fashions in a general
journal:
DATE TRANSACTIONS
2019
April 1 Purchased merchandise for cash, $1,120.
2 Returned merchandise for cash purchased on
April 1; received a cash refund of $127.
4 Purchased merchandise on credit from Breit
Distributors, Invoice 125, $652, terms n/30; freight of $27. prepaid by
Breit Distributors and added to the invoice.
7 Returned damaged merchandise purchased on
April 4 from Breit Distributors; received Credit Memorandum 202 for
$34.

30 Paid the amount due to Breit Distributors for the
purchase of April 4, less the return on April 7, Check 1458.
On April 1, Moloney Meat Distributors sold merchandise on account to
Fronke’s Franks for $3,700 on Invoice 1001, terms 2/10, n/30. The cost
of merchandise sold was $2,400. Payment was received in full from
Fronke’s Franks, less discount, on April 10.
Record the transactions for Moloney Meat Distributors on April 1 and
April 10. The company uses the perpetual inventory system.
Record the following transactions of Fashion Park in a general journal.
Fashion Park must charge 7 percent sales tax on all sales. The company
uses the perpetual inventory system. (Round your intermediate
calculations and final answers to the nearest whole dollar value.)
DATE TRANSACTIONS
2019
April 2 Sold merchandise for cash, $2,640 plus sales tax.
The cost of merchandise sold was $1,640.

3 The customer purchasing merchandise for cash on
April 2 returned $320 of the merchandise; provided a cash refund to the
customer. The cost of returned merchandise was $220.
4 Sold merchandise on credit to Jordan Clark;
issued Sales Slip 908 for $1,190 plus tax, terms n/30. The cost of the
merchandise sold was $1,190.
6 Accepted return of merchandise from Jordan
Clark; issued Credit Memorandum 302 for $220 plus tax. The original
sale was made on Sales Slip 908 of April 4. The cost of returned
merchandise was $230.
30 Received payment on account from Jordan Clark
in payment of her purchase of April 4, less the return on April 6.
Record the following transactions of Allen Inc.: (Round your answers to
2 decimal places)
DATE TRANSACTIONS
2019

March 8 Purchased merchandise on credit from Alenikov
Designs, Invoice 1091, list price $5,000, trade discounts of 30% and
20%; terms 3/10, n/30.
17 Paid the amount owed on the purchase of March 8
from Alenikov Designs, less the 3 percent discount, Check 185.
Record the following transactions of J. Min Designs in a general journal.
The company uses the perpetual inventory system.
DATE TRANSACTIONS
2019
April 1 Purchased merchandise on credit from O’Rourke
Fabricators, Invoice 885, $3,550, terms 1/10, n/30; freight of $75
prepaid by O’Rourke Fabricators and added to the invoice (total invoice
amount, $3,625).

9 Paid amount due to O’Rourke Fabricators for the
purchase of April 1, less the 2 percent discount, Check 457.
15 Purchased merchandise on credit from Kroll
Company, Invoice 145, $1,800, terms 1/10, n/30; freight of $130 prepaid
by Kroll and added to the invoice.
17 Returned damaged merchandise purchased on
April 15 from Kroll Company; received Credit Memorandum 332 for
$105.
24 Paid the amount due to Kroll Company for the
purchase of April 15, less the return on April 17, taking the 1 percent
discount, Check 470.
Record these transactions in a general journal.
Tune Tones Instrument Tuning Company owes Mandy Lynn's Music
Studio $5,016 as of November 1. During November, Tune Tones
purchased merchandise from Mandy Lynn totaling $8,655 and made
payments on account to Mandy Lynn in the amount of $7,410. The
amount Tune Tones owes Mandy Lynn on November 30 is:
Multiple Choice
•

During the year, a firm purchased $257,500 of merchandise and paid
freight charges of $41,850. If the total purchases returns and allowances
were $16,440 and purchase discounts were $8,900 for the year, what is
the net delivered cost of purchases?
Multiple Choice
•
$299,350
•
$274,010
•
$324,690
•
$190,310
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This Tutorial contains excel file which can be used in case the value
changes
1. A firm’s bank reconciliation statement shows a book balance of
$15.940,an NSF check of $460,and a service charge of $26.Its
adjusted book balance is
2. On January 2,The Public Legal issued check 2108 for $260 to
establish a petty cash fund.Indicate how this transaction would be
recorded in a general journal
3. After returning from a three-day business trip,the accountant for
southeast sales,JohannaEstrada,checked bank activity in the
company’s checking account online.The activity for the last three
days follows.
After matching these transactions to the company’s cash account in the
general ledger,Johanna noted the following unrecorded transactions:
 The ATM withdrawal on 9/22/201 was for personal use by the
owner,Robert Savage.
 The ACH credit on 9/22/2019 was an electronic funds payment
received on account from Edwards UK, a credit customer located
in Great Britain.
 The bill payment made 9/23/2019was to waste control Trash
Services(utilities).

 The loan payment on 9/24/2019 was an automatic debit by central
motors for the company’s monthly payment on a loan for its
automobiles.The loan does not bear interest.
Prepare the journal entries in a general journal to record the
four transactions above.(Round your answers to 2 decimal
places.)
4. On January 2,Jasmine’s Beauty Supplies Inc,issued Check 3100
for $300 to establish a petty cash fund.On January 31, Check 3159
was issued to replenish the petty cash fund.An analysis of
payments from the fund showed these totals: Supplies, $44;
Delivery Expense,$85; and Miscellaneous Expense, $20.
Indicate how these transactions would be recorded in a general journal.
5. Read each of the following transactions.
A. The cash sales per a register tape were $579.The cash count is
$552.
B. The cash sales per a register tape were $8,700.The cash count is
$8,280.
Prepare the general journal entries to record the above transactions.
6. Teng Corporation received a bank statement showing a balance of
$14,250 as of October 31,2019.The firm’s records showed a book
balance of $13,893 on October 31. The difference between the two
balances was caused by the following items.
1.A debit memorandum for an NSF check from Richard Wolf for $415.

2. Three outstanding checks:Check 7017 for $115, Check 7098 for
$46,and Check 7107 for $1,470.
3. A bank service charge of $11.
4.A deposit in transit of $848.
Prepare the adjusted bank balance section and the adjusted book balance
section of the bank reconcillationstatement.Prepare the necessary journal
entries for the year 2019.
7. Florence company received a bank statement showing a balance of
$12,400 on November 30,2019.During the bank
reconcillationprocess.Florence’s accountant noted the following
bank errors:
A. A check for $147 issued by Florentine, Inc., was mistakenly
charged to Florence company’s account.
B. Check 2782 was written for $100 but was paid by the bank as
$1,100.
C. Check 2920 for $81 was paid by the bank twice.
D. A deposit for $570 on November 22 was credited by the bank for
$750.
Assuming outstanding checks total $1,750, Prepare the adjusted
bank balance section of the November 30,2019, bank
reconciliation.
8. Northwest Gift Shop, a retail business, started business on April
29,2019.It keeps a $300 change fund in its cash register. The cash

receipts for the period from April 29 to April 30,2019, are shown
below.
Record the cash receipts on April 29 and April 30, 2019, in a general
journal.
9. On March 31,2019, Home Decorating Pavilion received a bank
statement showing a balance of $9,690. The balance in the firm’s
checkbook and cash account on the same date was $10,134.The
difference between the two balances is caused by the items listed
below,
a. A $2,815 deposit made on March 30 does not appear on the bank
statement.
b. Check 358 for $455 issued on March 29 and check 359 for $1,590
issued on March 30 have not yet been paid by the bank.
c. A credit memorandum shows that the bank has collected a $1,200
note receivable and interest of $210 for the firm.
d. A service charge of $19 appears on the bank statement.
e. A debit memorandum shows an NSF check for $495.(The check
was issued by Dane jaris, a credit customer.)
f. The firm’s records Indicate that check 341 of March 1 was issued
for $800 to pay the month’s rent.However, the cancelled check and
the listing on the bank statement show that the actual amount of the
check was $750.
g. The bank made an error by deducting a check for $530 issued by
another business from the balance of Home Decorating Pavilion’s
account.
Required:

1.Prepare a bank reconciliation statement for the firm as of
March 31,2019.
2.Recordentires for any items on the bank reconciliation
statement that must be journalized.
10. Read the following transactions.
Lourdes LLC.keeps a $100 change fund in its cash register.At the end of
the day, Cash sales per the register tape were $2,650.The cash count was
$3,000.
Calculate the amount over or Short.
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changes

1) The following selected accounts were taken from the financial
records of Los Olivos Distributors at December 31,2019.All accounts
have normal balances.
Cash $27,945
Accounts Receivable 46,200
Note Receivable 8,000
Merchandise inventory 34,200
Prepaid Insurance 2,200
Supplies 1,260
Equipment 42,000
Accumulated depreciation,equipment 22,000
Note payable to bank,due 2020 20,000
Accounts payable 28,700
Interest payable 200
Sales 522,500
Sales discounts 1,700
Cost of goods sold 388,025
Accounts Receivable at December 31,2018, was $56,300.Merchandise at
December 31,2018, was $57,100.Based on the account balances
above,Calculate the following:
a. The gross profit percentage.
b. Working capital.
c. The current ratio.
d. The inventory turnover.
e. The accounts receivable turnover. All sales wer on credit
2) Solomon Company reports the following in its most recent year of
operations:

• Sales ,$1,040,400(all on account)
• Cost of Goods sold ,$601,400
• Gross Profit,$439,000
• Accounts receivable,beginning of year,$92,000
• Accounts receivable,end of year,$112,000
• Merchandaise inventory,beginning of year,$57,000
• Merchandaise inventory,end of year.$67,000
Based on these balances,compute:
a. The accounts receivable turnover.
b. The inventory turnover.
3) The worksheet of Bridget’s Office Supplies contains the following
revenue, cost and expenses account. The merchandise inventory
amounted to $59,675 on January 1, 2019 and $52,625 on December 31,
2019. The expense accounts numbered 611 through 617 represent selling
expenses, and those numbered 631 through 646 represent general and
administrative expenses.
401 Sales $248,200 Cr.
451 Sales Returns and Allowances 4,340 Dr.
491 Miscellaneous Income 390 Cr.
501 Purchases 103,500 Dr.
502 Freight In 1,965 Dr.
503 Purchases Returns and Allowances 3,590 Cr.
504 Purchases Discounts 1,790 Cr.
611 Salaries Expense-Sales 45,200 Dr.
614 Store Supply Expense 2,300 Dr.
617 Depreciation Expense-Store Equipment 1,500 Dr.
631 Rent Expense 13,400 Dr.
634 Utilities Expense 2,990 Cr.
637 Salaries Expense-Office 21,000 Cr.
640 Payroll Taxes Expense 5,900 Dr.
643 Depreciation Expense-Office Equipment 560 Dr.

646 Uncollectible Accounts Expense 710 Dr.
691 Interest expense 720 Dr.
Prepare a classified income statement for this firm for the year ended
December 31,2019.
4) The Worksheet of Bridger’s Office Supplies contains the following
revenue,cost and expense accounts.The merchandise inventory
amounted to $58.175 on January 1,2019,and$51,125 on December
31,2019. The expense accounts numbered 611 through 617 represent
selling expenses,and those numbered 631 through 646 represent general
and administrative expenses.
401 Sales $244,400 Cr.
491 Miscellaneous Income 240 Cr.
611 Salaries Expenses-Sales 43,700 Dr.
614 Store Supplies Expense 2,150 Dr.
617 Depreciation Expense-Store Equipment 1,350 Dr.
631 Rent,Expense 11,900 Dr.
634 Utilities Expense 2,840 Dr.
637 Salaries Expense-Office 19,500 Dr.
643 Depreciation Expense-Office Equipment 410 Dr.
691 Interest Expense 420 Dr.
The worksheet of Bridget’s Office Supplies contains the following
owner’s equity accounts.

301 Bridget Swanson, Capital $62,160 Cr.
302 Bridget Swanson, Drawing 41,000 Dr.
5) The beginning capital balance shown on a statement of owner’s
equity is $110,000.Net income for the period is $51,000. The owner
withdrew $25,500 cash from the business and made no additional
investments during the period. The owner’s capital balance at the end of
the period is
o 186,500
o $135,500
o $110,000
o $161,000
6) A Company reported gross profit of $93,000, total operating
expenses of $49,500 and interest income of $3,800. What is the income
from operations?
o $43,500
o $35,900
o $39,700
o $47,300

7)
2019
Dec.31 (Adjustment a)
Uncollectible Accounts Expense
Allowance for Doubtful Accounts
To record estimated loss from Uncollectible
accounts based on 0.5% of net credit sales,$728,000
3,640.00
3,640.00
31 (Adjustment b)
Supplies Expense
To record supplies used during the year
5,000.00
5,000.00
31 (Adjustment c)
Insurance Expenses
Prepaid Insurance
To record expired insurance on 1-year $5,760
policy purchased on oct.1
1,440.00
1,440.00
31 (Adjustment d)
Depreciation. Exp- Store Equipment
Accum. Depreciation-Store Equip.
To record depreciation
14,600.00
14,600.00
31 (Adjustment e)
Salaries Expense-office

Salaries payable
To record accrued salaries for Dec. 29-31
3,100.00
3,100.00
31 (Adjustment f)
Payroll Taxes Expense
Social Security Tax Payable
Medicare Tax Payable
TO record accrued payroll taxes on accrued
salaries: social security, 6.2% * 3,100 = $192.20; Medicare, 1.45% *
3,100 = $44.95
237.15
192.20
44.95
31 (Adjustment g)
Interest Expense
Interest Payable
To record accrued interest on a 4-month,6% trade
note payable dated Nov. 1: $23,000 * 2/12 = $230.00
230.00
230.00
8) The Adjusted Trial Balance section of the worksheet for Van Zant
Janitorial Supplies follows.The owner made no additional investments
during the year.
Accounts Debit Credit

Cash $ 19,600
Allowance for Doubtful Accounts $ 200
Merchandise Inventory 187,200
Supplies 7,240
Prepaid Insurance 3,160
Equipment 52,000
Accumulated Depreciation – Equipment 18,800
9) At the end of the year Stan Still Stationery Store had the following
balances: Sales $690,000 ;Sales Dicounts $2,640 ; Sales Returns and
Allownces $15,6000 ; Sales Salaries Expense $75,000. The Net Sales for
the year are:
• $596,760
• $674,400
• $671,760
• $687,360
10) The worksheet of Bridget’s Office Supplies contains the following
revenue, cost, and expense accounts. The merchandise inventory
amounted to $58,375 on January 1, 2019 and $51,325 on December 31,
2019. The expense accounts numbered 611 through 617 represents
selling expenses, and those numbered 631 through 646 represent general
and administrative expenses.
401 Sales $ 244,800 Cr.
491 Miscellaneous income 260 Cr.

611 Salaries Expense-Slaes 43,900 Dr.
614 Store Supplies Expense 2,170 Dr.
617 Deprediction Expense- Store Equipment 1,370 Dr.
631 Rent Expense 12,100 Dr.
634 Utilities Expense 2,860 Dr.
637 Salaries Expense-Office 19,700 Dr.
643 Depreciation Expense- Office Equipment 430 Dr.
691 Interest Expense 460 Dr.
The Worksheet of Bridget’s Office Supplies Contains the following
owner’s equity accounts. No additional investments were made during
the period.
301 Bridget Swanson, Capital $ 62,630 Cr.
302 Bridget Swanson, Drawing 40,900 Dr.
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ACC 291T Assignment Week 1 Apply: Connect® Exercise
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ACC 291T ASSIGNMENT Week 1 Apply: Connect® Exercise

Review the Knowledge Check in preparation for this Assignment.
Complete the Week 1 Exercise in Connect®.
Note: You have only one attempt available to complete this Assignment.
Grades must be transferred manually to eCampus by your instructor.
Don’t worry, this might happen after your due date
If Lacy’s Department Store charges 8 percent sales tax, the amount of
sales tax collected on a $525 sale would be
Multiple Choice
•
$4.20.

•
$420.00.
•
$42.00.
•
$567.00.
___________ are required to collect sales tax from customers, make
periodic payments to the taxing authority, and pay the taxes due when
reports are filed.
Multiple Choice
•
Wholesalers
•
Retailers
•
Manufacturers
•

Distributors
The Sales Returns and Allowances account is classified as
Multiple Choice
•
an asset account.
•
a contra asset account.
•
a contra revenue account.
•
a revenue account.
The amount used by wholesalers to record sales in the general journal is
Multiple Choice
•

$324.00
Kay Sadia sold merchandise for $7,200 subject to 8% sales tax. The
entry in the general journal to record the sale will include:
Multiple Choice
•
a debit to Sales Tax Payable for $576.00.
•
credit to Sales for $7,200.00.
•
a credit to Sales for $7,776.00.
•
a debit to Accounts Receivable for $7,200.00.
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ACC 291T Assignment Week 1 Practice: Connect® Knowledge
Check
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ACC 291T ASSIGNMENT Week 1 Practice: Connect® Knowledge
Check
Complete the Week 1 Knowledge Check in Connect®.
Note: You have unlimited attempts available to complete this practice
Assignment. The highest scored attempt will be recorded.
have earlier due dates, so plan accordingly.
Hour Place Clock Shop sold a grandfather clock for $3,750 subject to a
7% sales tax. The entry in the general journal will include a debit to
Accounts Receivable for
Multiple Choice
$3,625.00.
$4,012.50.
$3,750.00.
$3,487.50.
The amount used by wholesalers to record sales in the general journal is
Multiple Choice

the retail price.
the list price.
the original price.
the net price.
Merchandise is sold on credit for $1,600 plus 6 percent sales tax. The
journal entry to record the sale will include a debit to Accounts
Receivable for
Multiple Choice
$1,600.00.
$1,696.00.
$2,560.00.
$1,504.00.

The balance due from an individual customer can be found in:
Multiple Choice
the general journal.
the Sales account in the general ledger.
the accounts receivable subsidiary ledger.
the Accounts Receivable account in the general ledger.
The entry to record a return by a credit customer of defective
merchandise on which no sales tax was charged includes
Multiple Choice
a debit to Sales and a credit to Accounts Receivable.
a debit to Accounts Receivable and a credit to Sales Returns and
Allowances.
a debit to Sales and a credit to Sales Returns and Allowances.

a debit to Sales Returns and Allowances and a credit to Accounts
Receivable.
On June 12, Music, Inc. sells $4,000 of goods on account to a credit
customer with credit terms of 1/10, n/30. If the customer pays on June
20, select the entry to record the receipt of the customer’s payment:
Multiple Choice
Cash 3,960
Sales Discounts 40
________________________________________
•
Cash 4,000
________________________________________
Cash 4,000
Sales Discounts 40

________________________________________
Sales Discounts 40
Cash 4,000
________________________________________
Which of the following describes the Sales Returns and Allowances
account?
Multiple Choice
A contra expense account with a normal debit balance.
An expense account with a normal debit balance.
A revenue account with a normal credit balance.
A contra revenue account with a normal debit balance.

The Sales Returns and Allowances account is reported
Multiple Choice
on the income statement as an addition to Sales.
on the balance sheet as a deduction from Capital.
on the income statement as a deduction from Sales.
on the balance sheet as a deduction from Accounts Receivable.
Which of the following is a common example of the distribution
channel?
Multiple Choice
Customer sells to Wholesaler who sells to Retailer who sells to
Wholesaler
Manufacturer sells to Wholesaler who sells to Retailer who sells to
Customer
Manufacturer sells to Customer who sells to Wholesaler who sells to
Retailer
Manufacturer sells to Retailer who sells to Wholesaler who sells to
Customer
Which of the following is not one of the three basic types of businesses?

Multiple Choice
Service
Manufacturing
International
Merchandising
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Credit terms of 2/10, n/45 mean:
Multiple Choice
payment in full is due 2 days after date of the invoice.
•
if the invoice is paid within 10 days of its date, a 2% discount may be
taken; otherwise the total amount is due in 35 days.
•
if the invoice is paid within 10 days of its date, a 2% discount may be
taken; otherwise the total amount is due in 45 days.
•
payment in full is due 45 days after date of the invoice with no discount
offered.
Assuming a periodic inventory system is used, the entry to record a
return of merchandise purchased on credit would:
Multiple Choice
•
debit Purchases Returns and Allowances and credit Accounts
Receivable.
•

debit Purchases Returns and Allowances and credit Purchases.
•
debit Purchases and credit Purchases Returns and Allowances.
•
debit Accounts Payable and credit Purchases Returns and Allowances.
Assuming a periodic inventory system is used, freight charges on
merchandise purchases should be debited to:
Multiple Choice
•
the creditor’s account in the subsidiary ledger.
•
the Freight In account.
•
the Purchases account.
•
the Accounts Payable account.
Which of the following statements is ?

Multiple Choice
•
Purchases Discounts is a contra expense account with a normal credit
balance.
•
Purchases Discounts is a revenue account with a normal credit balance.
•
Purchases Discounts is an asset account with a normal credit balance.
•
Purchases Discounts is an expense account with a normal debit balance.
Multiple Choice
•
The person who ordered the goods should also authorize payment.
•
Purchase requisitions do not need to be printed on pre-numbered forms.
•

Calculations on an invoice are assumed to be if computer generated.
•
Purchases should be made only after receiving proper written
authorization.
On Oct 1, Jerry’s Lighting purchased merchandise with a list price of
$5,000 with credit terms of 1/10, n/30. On Oct 3, Jerry’s returns $500 of
the merchandise. Assuming a periodic inventory system is used and
Jerry’s pays the remaining amount owed on the purchase within the
discount period, Jerry’s journal entry to record the payment, would
include:
Multiple Choice
•
a debit to Accounts Receivable for $4,500.
•
a debit to Purchase Discounts for $45.
•

inventory system, the journal entry on April 13, to record the payment of
the amount owed, would be:
DEBIT CREDIT
A) Accounts Payable 1,000
Cash 1,000
B) Accounts Reveivable 1,000
Sales Discounts 16
Cash 984
C) Accounts Payable 800
Merchandise Inventory 16
Cash 784
D) Accounts Payable 800
Purchase Discounts 16
Cash 784
________________________________________
Multiple Choice

•
Option D.
•
Option A.
•
Option B.
•
Option C.
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These Assignments have earlier due dates, so plan accordingly.
Don’t worry, this might happen after your due date.
Assuming a periodic inventory system is used, freight charges on
merchandise purchases should be debited to:
Multiple Choice
the creditor’s account in the subsidiary ledger.
the Freight In account.

the Purchases account.
the Accounts Payable account.
Multiple Choice
Purchases Discounts is a contra expense account with a normal credit
balance.
Purchases Discounts is a revenue account with a normal credit balance.
Purchases Discounts is an asset account with a normal credit balance.
Purchases Discounts is an expense account with a normal debit balance.

Multiple Choice
The person who ordered the goods should also authorize payment.
Purchase requisitions do not need to be printed on pre-numbered forms.
Calculations on an invoice are assumed to be if computer generated.
Purchases should be made only after receiving proper written
authorization.
On Oct 1, Jerry’s Lighting purchased merchandise with a list price of
$5,000 with credit terms of 1/10, n/30. On Oct 3, Jerry’s returns $500 of
the merchandise. Assuming a periodic inventory system is used and
Jerry’s pays the remaining amount owed on the purchase within the
discount period, Jerry’s journal entry to record the payment, would
include:
Multiple Choice

a debit to Accounts Receivable for $4,500.
a debit to Purchase Discounts for $45.
a debit to Accounts Payable for $4,500.
a debit to Merchandise Inventory for $45.
When a payment is due is determined by the invoice date and the:
Multiple Choice
transportation schedule.
accounting cycle.
credit terms.

Cash 1,000
B) Accounts Reveivable 1,000
Sales Discounts 16
Cash 984
C) Accounts Payable 800
Merchandise Inventory 16
Cash 784
D) Accounts Payable 800
Purchase Discounts 16
Cash 784
________________________________________
Multiple Choice

Option D.
Option A.
Option B.
Option C.
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Which of the following statements is not correct?
Multiple Choice
•
In accounting, the term “cash” includes checks, money orders, and funds
on deposit in a bank as well as currency and coins.
•
In a well managed business, most bills are paid by cash.

•
The cash register proof is used to enter the cash sales and sales tax in the
journal.
•
The petty cash account balance is usually listed separately from the Cash
account on the Balance Sheet.
Most businesses use the petty cash fund to pay for
Multiple Choice
•
internal expenses.
•
accounts payable.
•
small expenditures.
•
merchandise purchases.
Which of the following statements is correct?
Multiple Choice
•
An endorsement is a written authorization that transfers ownership of a
check.
•

If a check is negotiable, it means that ownership cannot be transferred.
•
A check is a written order signed by an authorized person, the drawee.
•
Most businesses make one monthly deposit of cash receipts in order to
maintain better control over their cash.
The entry to replenish a petty cash fund typically includes
Multiple Choice
•
a debit to Cash and a credit to Petty Cash.
•
debits to various asset and expense accounts and a credit to Cash.
•
debits to various expense accounts and a credit to Petty Cash Fund.
•
a debit to Petty Cash Fund and a credit to Cash.

ABC Office Suppliers keeps a $200 change fund in its cash register. The
cash sales per the cash register tape on May 30 were $700. The cash
count was $908. Identify the correct journal entry below to record the
sales and cash overage (or shortage) for May 30.
DEBIT CREDIT
(A) Cash 700
Cash Short or Over 8
Sales 708
(B) Cash 700
Sales 700
(C) Cash 708

deducted from the book balance.
•
deducted from the bank statement balance.
•
added to the book balance.
The bank statement did not show a check for $630 that was written and
recorded by the company during the month. The journal entry needed for
this reconciling item includes:
Multiple Choice
•
a debit to cash.
•
a credit to Accounts Payable.
•
a credit to Cash.
•
no journal entry is required for the reconciling item.
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The bank statement did not show a check for $630 that was written and
recorded by the company during the month. The journal entry needed for
this reconciling item includes:
Multiple Choice
•
a credit to Accounts Payable.
•
•
a debit to cash.
•
a credit to Cash.
Included with its bank statement a firm may receive a credit
memorandum, which could indicate
Multiple Choice

•
a fee for printing new business checks.
•
a bank service charge deducted from the firm’s account balance.
•
an addition to the firm’s account balance because the bank collected the
amount due on a promissory note from a customer of the firm.
•
the bank’s return of a dishonored (NSF) check that was issued by a
credit customer of the firm.
A firm appropriately wrote a check for $78 but entered the amount as
payment of $87 in its records. On a bank reconciliation statement this
error would be shown as
Multiple Choice
•
a deduction of $9 from the book balance.
•
an addition of $9 to the book balance.
•
a deduction of $9 from the bank statement balance.
•

an addition of $9 to the bank statement balance.
Which of the following is not a reason why the book balance of cash
may not agree with the balance on the bank statement?
Multiple Choice
•
Outstanding checks
•
End of the month
•
Service charges and other deductions
•
Deposit in transit
The bank statement did not show a deposit of $850 that had been
recorded by the firm. The journal entry needed for this reconciling item
includes:
Multiple Choice
•
a credit to Accounts Receivable.
•
a credit to Cash.
•

•
a debit to cash.
The bank statement showed an NSF check from a customer, which the
company listed as a reconciling item on the bank reconciliation
statement. The journal entry needed for this reconciling item includes:
Multiple Choice
•
a debit to NSF Expense.
•
a debit to cash.
•
a credit to Cash.
•
a credit to Accounts Receivable.
To arrive at an accurate balance on a bank reconciliation statement, a
service charge should be

•
•
To arrive at an accurate balance on a bank reconciliation statement,
outstanding checks should be
Multiple Choice
•
added to the bank statement balance.
•
•
added to the book balance.
•
deducted from the bank statement balance.
The entry to replenish a petty cash fund typically includes
Multiple Choice
•

debits to various asset and expense accounts and a credit to Cash.
•
debits to various expense accounts and a credit to Petty Cash Fund.
•
a debit to Cash and a credit to Petty Cash.
•
a debit to Petty Cash Fund and a credit to Cash.
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Identify the statement below that is true regarding the Allowance for
Doubtful Accounts account.
Multiple Choice
•
The account has a normal credit balance and is reported on the balance
sheet.
•
The account has a normal debit balance and is reported on the balance
sheet.
•
The account has a normal credit balance and is reported on the income
statement.
•
The account has a normal debit balance and is reported on the income
statement.

On June 1, 2019, Mighty Fast Flooring issued a 10-month, 9 percent
note for $5,000. The note was recorded in the Notes Payable-Trade
account. The adjusting entry on December 31 to record the interest
accrued (owed) on the note is:
Multiple Choice
•
a debit to Interest Expense for $450.00 and a credit to Interest Payable
for $450.00.
•
a debit to Interest Income for $450.00 and a credit to Interest Receivable
for $450.00.
•
a debit to Interest Expense for $262.50 and a credit to Interest Payable
for $262.50.
Correct
•
a debit to Interest Expense for $262.50 and a credit to Notes Payable-
Trade for $262.50.

On January 1, 2019, a firm purchased machinery for $19,000.
Depreciation expense for the year ending December 31, 2019, given the
straight-line method, a 8-year useful life, and a salvage value of $2,000,
is
Multiple Choice
•
$2,125.
•
$2,000.
•
$2,375.
•
$2,400.
Multiple Choice
•
Income that has been earned but not yet received is called accrued
income.
•
Unearned Subscription Income is a liability account.
•

Under the accrual basis of accounting, revenue is recognized and
recorded in the period when it is earned regardless of when cash related
to the transaction is received.
•
All of these statements are correct.
On November 1, 2019, a firm accepted a 5-month, 10 percent note for
$1,200 from a customer with an overdue balance. The accrued interest
recorded for this note for the year ended December 31, 2019, is
Multiple Choice
•
$120.
•
$60.

•
$3,250
•
$8,125
Depreciation Expense has a debit balance in the Trial Balance section of
the worksheet of $2,200 and a debit of $200 in the adjustments section
of the worksheet, the balance of Depreciation Expense in the Adjusted
Trial Balance section of the worksheet is a
Multiple Choice
•
$2,400 credit.
•
$200 debit.
•
$2,000 debit.
•
$2,400 debit.

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Rose Bush Nursery purchased a delivery truck for $40,000. The truck is
expected to have a useful life of 5 years and a residual value of $2,800.
The company uses the straight-line method of depreciation. If the truck
was purchased on June 1, 2019, what is the amount of depreciation
expense for the truck for the year ended December 31, 2019?
Multiple Choice
•
$2,800
•
$3,100
•

$7,440
•
$4,340
The ending merchandise inventory is recorded on the worksheet in the
Multiple Choice
•
Income Statement Debit column only.
•
Income Statement Credit column only.
•
Income Statement Credit and the Balance Sheet Debit columns.
•
Balance Sheet Debit column only.
After both of the entries for the inventory adjustment have been posted,
the debit in the Income Summary account represents:
Multiple Choice
•
Beginning Inventory
•

Net Income
•
Ending Inventory
•
Cost of Goods Sold
An adjusting entry is usually not required for a revenue item when it is
Multiple Choice
•
earned, recorded and paid for by the customer in one period.
•
paid for by the customer and recorded in one period but not fully earned
until a later period.

•
earned in one period but not paid for by the customer or recorded until a
later period.
•
budgeted, paid for, and partially earned in one period but not fully
earned until a later period.
On December 1, 2019, a firm accepted a 6-month, 12 percent note for
$10,000 from a customer. The adjusting entry on December 31 to record
the interest earned on the note is:
Multiple Choice
•
a debit to Interest Receivable for $600 and a credit to Interest Income for
$600.
•
a debit to Interest Income for $100 and a credit to Interest Receivable for
$100.
•

a debit to Interest Receivable for $1,200 and a credit to Interest Income
for $1,200.
•
a debit to Interest Receivable for $100 and a credit to Interest Income
for $100.
Multiple Choice
•
On the worksheet, the amount of the ending merchandise inventory is
shown in the Income Statement Credit column in the account Income
Summary and the Balance Sheet Debit column in the account
Merchandise Inventory.
•
All of these statements are correct.
•
On the worksheet, the totals of the Income Statement columns should
equal the totals of the Balance Sheet columns.
•

On the worksheet, if debits exceed credits in the Adjusted Trial Balance
section, the difference represents a net loss.
Allowance for Doubtful Accounts is reported in the
Multiple Choice
•
Assets section of the balance sheet.
•
Liabilities section of the balance sheet.
•
Cost of Goods Sold section of the income statement.
•
Operating Expenses section of the income statement.

During the year, Spirit Fun had net credit sales of $800,000. Past
experience shows that 1.5 percent of the firm’s net credit sales will be
uncollectible. Determine the adjusting entry needed to recognize the
estimated expense for these uncollectible accounts.
Multiple Choice
•
debit Allowance for Doubtful Accounts $12,000 and credit Accounts
Receivable $12,000.
•
debit Uncollectible Accounts Expense $12,000 and credit Allowance for
Doubtful Accounts $12,000.
•

debit Uncollectible Accounts Expense $12,000 and credit Accounts
Receivable $12,000.
•
debit Uncollectible Accounts Expense $120,000 and credit Allowance
for Doubtful Accounts $120,000.
On January 2, 2019, a firm purchased equipment for $10,000.
Depreciation expense for the year ending December 31, 2019, given the
straight-line method, a 5-year useful life, and a salvage value of $1,200,
is
Multiple Choice
•
Hugh Morris Company pays weekly wages of $15,000 every Friday for
a five day week ending on that day. If the last day of the year is on
Tuesday, the adjusting entry to record the accrued wages is:
Multiple Choice

•
debit Wages Expense $6,000; credit Drawing $6,000
•
debit Wages Expense $6,000; credit Wages Payable $6,000
•
debit Wages Expense $15,000; credit Cash $15,000
•
debit Wages Expense $9,000; credit Wages Payable $9,000
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The beginning capital balance shown on a statement of owner’s equity is
$80,000. Net income for the period is $35,000. The owner withdrew
$18,000 cash from the business and made no additional investments
during the period. The owner’s capital balance at the end of the period is
Multiple Choice
$133,000.
•
$97,000.
•
$80,000.
•
$63,000.

The balance of the owner’s drawing account is reported
Multiple Choice
•
in the Other Expenses section of the income statement.
•
on the statement of owner’s equity.
•
in the Current Assets section of the balance sheet.
•
in the Operating Expenses section of the income statement.
Which of the following statements is not correct?
Multiple Choice
•
The gross profit percentage is calculated by dividing the gross profit for
the year by the net sales for the year.
•

The average inventory is calculated by adding the beginning inventory
to the ending inventory and dividing the sum by 2.
•
A current ratio of 3.5 to 1 means that a firm has $3.50 in current
liabilities for every $1 of current assets.
•
Working capital is the difference between total current assets and total
current liabilities.
On May 1, Brown’s Antiques paid $18,000 for 12 months of advance
rent on its store and immediately debited the asset account Prepaid Rent
for the full amount. Select the adjusting entry made on December 31, to
record the amount of rent that had expired.
Multiple Choice
•
Prepaid Rent 12,000
Rent Expense 12,000
________________________________________
•
Prepaid Rent 18,000
Rent Expense 18,000

________________________________________
•
Rent Expense 10,500
Prepaid Rent 10,500
________________________________________
•
Payroll Tax Expense
The current ratio is calculated by
Multiple Choice
•
dividing total assets by total liabilities.
•
subracting current liabilities from current assets.
•
dividing current assets by current liabilities.

•
adding current assets to current liabilities.
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Interest Expense is classified as a(n):
Multiple Choice
•
Other Income
•
Administrative Expense
•
Other Expense
•
Selling Expense
Which of the following accounts would be closed at the end of the
accounting period?
Multiple Choice

•
Prepaid Rent
•
Accumulated Depreciation
•
Depreciation Expense
•
Capital
The Income Summary account, for Wise Tools appears below. Based on
the data contained in the account, determine which of the statements
below is correct.
Income Summary
12/31 beg inv. 4,000 12/31 ending inv. 9,000
12/31 expenses 51,000 12/31 revenues 45,000
Multiple Choice

Wise Tools will report a $6,000 net loss for the period ending 12/31
•
Wise Tools will report a $1,000 net loss for the period ending 12/31
•
multiple-step income statement.
For the current fiscal year, Purchases were $187,000,Purchase Returns
and Allowances were $4,200 and Freight In was $10,500. If the
beginning merchandise inventory was $98,000 and the ending
merchandise inventory was $103,000, the Cost of Goods Sold is:
Multiple Choice
•
$193,300
•
$167,300
•
$196,700

•
$188,300
Which of the following groups of accounts will have zero balances after
the closing process is completed?
Multiple Choice
•
Allowance for Doubtful Accounts and Uncollectible Accounts Expense
•
Depreciation Expense and Accumulated Depreciation—Equipment
•
Purchases and Purchases Returns and Allowances
•
Merchandise Inventory and Sales
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