Advanced Accounting S1 Mid-Term Exam Review

An employee who works 46 hours during a week and is paid $18.00 per hour would

earn $820.00.

• True

• False

The vertical analysis ratio for gross profit is calculated by dividing gross profit by net sales.

• True

• False

An amount recorded in the Accounts Receivable Debit column of a sales journal is posted to the customer’s account when the transaction is journalized.

• True

• False

A cost that can be controlled by a department manager is reported on a departmental margin statement as a direct expense.

• True

• False

The issuance of common stock would be reported as an investing activity on the statement of cash flows.

• True

• False

After special journals have been proved and ruled, column totals from the special amount columns are posted to the general ledger accounts indicated in the column headings.

• True

• False

The amount recorded in the Cash Credit column of the cash payments journal for the payment of payroll equals net pay.

• True

• False

Merchandising businesses often use a point-of-sale terminal to process cash and credit card sales.

• True

• False

Net income increases the retained earnings of a corporation as shown on the statement of stockholders’ equity.

• True

• False

A periodic count of inventory yields a cost of boats inventory less than the balance in Merchandise Inventory—Boats. The adjusting entry will include a credit to Income

Summary—General.

• True

• False