WorksheetsAccounting Final Exam - Spring 2024 Review
Total questions: 60
Worksheet time: 30mins
Name
Class
Date
1.
Quick assets are defined as:
a)
Cash, short-term investments, and accounts payable.
b)
Cash, short-term investments, and current receivables.
c)
Cash, inventory, and current receivables.
d)
Cash, noncurrent receivables, and prepaid expenses.
e)
Accounts receivable, inventory, and prepaid expenses.
2.
A company's current assets are $18,940, its quick assets are $10,370 and its current liabilities are $12,500. Its quick ratio is closest to:
a)
0.83.
b)
1.21.
c)
1.51.
d)
1.83.
e)
2.34.
3.
Cost of goods sold:
a)
Is another term for merchandise sales.
b)
Is the term used for the expense of buying and preparing merchandise for sale.
c)
Is another term for revenue.
d)
Is also called gross margin.
e)
Is a term only used by service firms.
4.
A company has net sales of $398,400 and its gross profit is $167,900. Its cost of goods sold is:
a)
207400
b)
398400
c)
167900
d)
230500
e)
566300
5.
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:
a)
200
b)
1564
c)
1568
d)
1600
e)
1800
6.
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 28 is:
a)
Debit Merchandise Inventory $1,600; credit Cash $1,600.
b)
Debit Cash $1,600; credit Accounts Payable $1,600.
c)
Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568.
d)
Debit Accounts Payable $1,800; credit Cash $1,800.
e)
Debit Accounts Payable $1,600; credit Cash $1,600.
7.
Sales returns:
a)
Refer to merchandise that customers return to the seller for a refund.
b)
Refer to reductions in the selling price of merchandise sold to customers.
c)
Represent cash discounts.
d)
Represent purchases discounts.
e)
Are not recorded under the perpetual inventory system until the end of each accounting period.
8.
Garza Company had sales of $152,200, sales discounts of $2,300, and sales returns of $3,655. Garza Company's net sales equals:
a)
5955
b)
146245
c)
149900
d)
152200
e)
158155
9.
The current period's ending inventory is:
a)
The next period's beginning inventory.
b)
The current period's cost of goods sold.
c)
The prior period's beginning inventory.
d)
The current period's net purchases.
e)
The current period's beginning inventory.
10.
Frisco Company's Merchandise Inventory account at year-end has a balance of $62,115, but a physical count reveals that only $61,900 of inventory exists. The adjusting entry to record this $215 of inventory shrinkage is:
a)
Debit Merchandise Inventory $215; credit Inventory Shrinkage Expense $215
b)
Debit Purchases Discount $215; credit Cost of Goods Sold $215
c)
Debit Cost of Goods Sold $215; credit Purchases Discount $215
d)
Debit Inventory Shrinkage Expense $215; credit Cost of Goods Sold $215
e)
Debit Cost of Goods Sold $215; credit Merchandise Inventory $215
11.
Prentice Company had cash sales of $94,700, credit sales of $83,700, sales returns and allowances of $1,875, and sales discounts of $3,650. Prentice’s net sales for this period equal:
a)
94700
b)
172875
c)
174750
d)
176525
e)
178400
12.
A company has net sales of $795,800 and cost of goods sold of $574,800. Its net income is $28,030. The company's gross margin and operating expenses, respectively, are:
a)
$221,000 and $192,970
b)
$221,000 and $249,500
c)
$546,770 and $249,500
d)
$249,500 and $546,770
e)
$767,300 and $192,970
13.
On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. Babson pays the invoice on March 17 and takes the appropriate discount. The journal entry that Klein makes on March 17 is:
a)
Debit Cash $7,800; credit Accounts Receivable $7,800
b)
Debit Cash $4,500; credit Accounts Receivable $4,500
c)
Debit Cash $7,644; Debit Sales Discount $156; credit Accounts Receivable $7,800
d)
Debit Cash $7,644; credit Accounts Receivable $7,644
e)
Debit Cash $4,410; Debit Sales Discount $90; credit Accounts Receivable $4,500
14.
Cushman Company had $820,000 in sales, sales discounts of $12,300, sales returns and allowances of $18,450, cost of goods sold of $389,500, and $282,080 in operating expenses. Gross profit equals:
a)
789250
b)
117670
c)
399750
d)
412050
e)
418200
15.
Credit terms are:
a)
The terms of a partnership agreement.
b)
A cash discount from the buyer’s perspective.
c)
The amounts and timing of payments from a buyer to a seller.
d)
The terms of an employment agreement.
e)
Always less than 30 days.
16.
The number of days' sales uncollected is used to:
a)
Measure how many days of sales remain until the end of the year.
b)
Determine the number of days that have passed without collecting on accounts receivable.
c)
Identify the likelihood of collecting sales on account.
d)
Estimate how much time is likely to pass before the current amount of accounts receivable is received in cash.
e)
Measure the amount of cash sales during a period.
17.
A company had net sales of $29,600 and accounts receivable of $4,600 for the current period. Its days' sales uncollected equals: (Use 365 days a year.)
a)
56.72 days.
b)
72.02 days.
c)
48.72 days.
d)
67.92 days.
e)
6.43 days.
18.
The following information is taken from Reagan Company's December 31 balance sheet:
Cash and cash equivalents $ 10,219
Accounts receivable 79,422
Merchandise inventories 69,362
Prepaid expenses 5,900
Accounts payable $ 16,750
Notes payable 95,638
Other current liabilities 11,300
If net sales for the current year were $602,500, the firm's days' sales uncollected for the year is: (Use 365 days a year.)
a)
80.9 days
b)
160.1 days
c)
48.1 days
d)
42.0 days
e)
70.7 days
19.
Managers use an internal control system:
a)
To monitor and control business activities.
b)
To ensure profitable operations.
c)
To eliminate the need for an audit.
d)
To guarantee a return to investors.
e)
Only if the company uses a computerized system.
20.
Internal control systems are:
a)
Developed by the Securities and Exchange Commission for public companies.
b)
Developed by the Small Business Administration for non-public companies.
c)
Developed by the Internal Revenue Service for all U.S. companies.
d)
Required by Sarbanes-Oxley (SOX) to be documented and verified if the company's stock is traded on an exchange (a public company).
e)
Required only if a company plans to engage in interstate commerce.
21.
Purchasing insurance against theft by employees who frequently handle cash follows which principle of internal control?
a)
Establish responsibilities.
b)
Maintain adequate records.
c)
Insure assets and bond key employees.
d)
Separate recordkeeping from custody of assets.
e)
Apply technological controls.
22.
Cash equivalents:
a)
Are short-term, highly liquid investment assets.
b)
Include 5-year certificates of deposit.
c)
Include accounts receivable.
d)
Are recorded in petty cash.
e)
Include long-term investments.
23.
The following information is available for Fenton Manufacturing Company at June 30:
Cash in bank account $ 7,555
Inventory of postage stamps $ 85
Bank account balance $ 13,500
Petty cash balance $ 460
NSF checks from customers returned by bank $ 977
Accounts payable $ 666
Cash in register $ 1,357
A certificate of deposit maturing in five years $ 9,100
Based on this information, Fenton Manufacturing Company should report Cash and Cash Equivalents on June 30 of:
a)
21515
b)
18472
c)
22577
d)
22492
e)
22872
24.
The Cash Over and Short account:
a)
Is used when the cash account reports a credit balance.
b)
Is used to record the income effects of cash overages and cash shortages.
c)
Is not necessary in a computerized accounting system.
d)
Can never have a debit balance.
e)
Can never have a credit balance.
25.
At the end of the day, the cash register's record shows $1,282, but the count of cash in the cash register is $1,261. The correct entry to record the cash sales is
a)
Debit Cash $1,261; debit Cash Over and Short $21; credit Sales $1,282.
b)
Debit Cash $1,261; Credit Sales $1,261.
c)
Debit Cash Over and Short $21, credit Sales $21.
d)
Debit Cash $1,282; credit Cash Over and Short $1,261; credit Sales $21.
e)
Debit Cash $1,282; credit Sales $1,282.
26.
At the end of the day, the cash register tape shows $1,140 in cash sales but the count of cash in the register is $1,185. The proper entry to account for this excess is:
a)
Debit Cash $1,140; credit Sales $1,140.
b)
Debit Cash $1,185; credit Sales $1,185.
c)
Debit Cash $1,185; credit Sales $1,140; credit Cash Over and Short $45.
d)
Debit Cash $1,140; debit Cash Over and Short for $45; credit Sales $1,185.
e)
Debit Cash Over and Short $45; credit Cash $45.
27.
The custodian of a $450 petty cash fund discovers that the fund has $56.30 in coins and currency plus $389.00 in receipts at the end of the month. The entry to replenish the petty cash fund will include:
a)
A debit to Cash for $384.30.
b)
A credit to Cash Over and Short for $4.70.
c)
A debit to Petty Cash for $389.00.
d)
A debit to Cash for $393.70.
e)
A credit to Cash for $393.70.
28.
Havermill Company establishes a $470 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $95 for Office Supplies, $181 for merchandise inventory, and $44 for miscellaneous expenses. The fund has a balance of $150. On October 1, the accountant determines that the fund should be increased by $94. The journal entry to record the establishment of the fund on September 1 is:
a)
Debit Cash $470; credit Petty Cash $470.
b)
Debit Petty Cash $470; credit Accounts Payable $470.
c)
Debit Miscellaneous Expense $470; credit Cash $470.
d)
Debit Petty Cash $470; credit Cash $470.
e)
Debit Cash $470; credit Accounts Payable $470.
29.
A bank statement provided by the bank includes:
a)
A list of outstanding checks.
b)
A list of petty cash amounts.
c)
The beginning and the ending account balance.
d)
A listing of deposits in transit.
e)
A reconciliation to the depositor cash account.
30.
If a check correctly written and paid by the bank for $439 is incorrectly recorded in the company's books for $493, how should this error be treated on the bank reconciliation?
a)
Subtract $54 from the book balance.
b)
Add $54 to the book balance.
c)
Subtract $54 from the bank's balance and add $45 to the book's balance.
d)
Add $54 to the bank's balance.
e)
Subtract $54 from the bank's balance.
31.
A company has net sales of $1,780,800 and average accounts receivable, net of $424,000. What is its accounts receivable turnover for the period?
a)
0.32
b)
7.4
c)
23.6
d)
77.8
e)
4.2
32.
Sustainable Supplies prepares the following aging of receivables analysis:
Days Past Due
Total Current 1 to 30 31 to 60 61 to 90 Over 90
Accounts receivable $ 57,600 $ 40,000 $ 9,000 $ 3,600 $ 2,000 $ 3,000
Percent uncollectible 1% 3% 5% 8% 11%
Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $500 credit.
a)
Debit Bad Debts Expense $840; credit Allowance for Doubtful Accounts $840.
b)
Debit Allowance for Doubtful Accounts $840; credit Bad Debts Expense $840.
c)
Debit Bad Debts Expense $1,840; credit Allowance for Doubtful Accounts $1,840.
d)
Debit Allowance for Doubtful Accounts $1,840; credit Bad Debts Expense $1,840.
e)
Debit Bad Debts Expense $1,340; credit Allowance for Doubtful Accounts $1,340.
33.
Jervis accepts all major bank credit cards, including those issued by Northern Bank (NB), which assesses a 4.5% charge on sales for using its card. On June 28, Jervis had $5,300 in NB Card credit sales. What entry should Jervis make on June 28 to record the deposit?
a)
Debit Cash $5,300; credit Sales $5,300
b)
Debit Accounts Receivable $5,300; credit Sales $5,300
c)
Debit Cash $5,538.50; credit Credit Card Expense $238.50; credit Sales $5,300
d)
Debit Cash $5,061.50; debit Credit Card Expense $238.50; credit Sales $5,300
e)
Debit Accounts Receivable $5,061.50; debit Credit Card Expense $238.50; credit Sales $5,300
34.
The person who signs a note receivable and promises to pay the principal and interest is the:
a)
Maker.
b)
Payee.
c)
Holder.
d)
Receiver.
e)
Owner.
35.
The quality of receivables refers to:
a)
The creditworthiness of sellers.
b)
The method of collection.
c)
The likelihood of collection without loss.
d)
Sales turnover.
e)
The interest rate charged.
36.
The expense recognition principle, as applied to bad debts:
a)
Requires that expenses be ignored if their effect on the financial statements is unimportant to users' business decisions.
b)
Favors the use of the direct write-off method for bad debts.
c)
Favors the use of the allowance method of accounting for bad debts.
d)
Requires that bad debts be disclosed in the financial statements.
e)
Requires that bad debts not be written off.
37.
The materiality constraint, as applied to bad debts:
a)
Permits the use of the direct write-off method when its results approximate those of the allowance method.
b)
Requires use of the pledge method for bad debts.
c)
Requires use of the direct write-off method.
d)
Requires that bad debts not be written off.
e)
Requires that expenses be reported when paid in cash.
38.
Gideon Company uses the direct write-off method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write-off of the account on May 3 is:
a)
Debit Accounts Receivable--A. Hopkins $2,000; credit Bad Debts Expense $2,000
b)
Debit Allowance for Doubtful Accounts $2,000; credit Accounts Receivable--A. Hopkins $2,000
c)
Debit Accounts Receivable--A. Hopkins $2,000; credit Cash $2,000
d)
Debit Bad Debts Expense $2,000; credit Accounts Receivable--A. Hopkins $2,000
e)
Debit Cash $2,000; credit Accounts Receivable--A. Hopkins $2,000
39.
Assuming the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:
a)
An increase in the expenses of the current period.
b)
An increase in current assets.
c)
A reduction in equity.
d)
No effect on the expenses of the current period.
e)
A reduction in current liabilities.
40.
Gideon Company uses the direct write-off method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write-off of the account on May 3 is:
a)
Debit Accounts Receivable--A. Hopkins $4,000; credit Bad Debts Expense $4,000
b)
Debit Allowance for Doubtful Accounts $4,000; credit Accounts Receivable--A. Hopkins $4,000
c)
Debit Accounts Receivable--A. Hopkins $4,000; credit Cash $4,000
d)
Debit Bad Debts Expense $4,000; credit Accounts Receivable--A. Hopkins $4,000
e)
Debit Cash $4,000; credit Accounts Receivable--A. Hopkins $4,000
41.
On February 1, a customer's account balance of $2,500 was deemed to be uncollectible. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method?
a)
Debit Allowance for Doubtful Accounts $2,500; credit Bad Debts Expense $2,500.
b)
Debit Allowance for Doubtful Accounts $2,500; credit Accounts Receivable $2,500.
c)
Debit Bad Debts Expense $2,500; credit Allowance for Doubtful Accounts $2,500.
d)
Debit Accounts Receivable $2,500; credit Allowance for Doubtful Accounts $2,500.
e)
Debit Bad Debts Expense $2,500; credit Accounts Receivable $2,500.
42.
The allowance method that assumes a percent of a company’s credit sales for the period is uncollectible is:
a)
The percent of sales method.
b)
The percent of accounts receivable method.
c)
The aging of accounts receivable method.
d)
The direct write-off method.
e)
The factoring method.
43.
On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $97,400; Allowance for Doubtful Accounts, credit balance of $981. What amount should be debited to Bad Debts Expense, assuming 3% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?
a)
1941
b)
3903
c)
981
d)
2922
e)
1049
44.
Failure by a promissory notes’ maker to pay the amount due at maturity is known as:
a)
Protesting a note.
b)
Closing a note.
c)
Dishonoring a note.
d)
Discounting a note.
e)
Depreciating a note.
45.
Which of the following is not a reason that sellers allow customers to use bank (or third-party) credit cards?
a)
To be able to charge customers more due to fees and interest.
b)
To avoid the risk of customers not paying.
c)
To speed up receipt of cash from the credit sale.
d)
To increase total sales.
e)
To avoid having to decide who gets credit and how much.
46.
When purchase costs regularly rise, the inventory costing method that yields the highest reported net income is:
a)
Specific identification method.
b)
Average cost method.
c)
Weighted-average method.
d)
FIFO method.
e)
LIFO method.
47.
The inventory costing method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost, and also follows the actual flow of goods for most businesses is:
a)
FIFO.
b)
Weighted average.
c)
LIFO.
d)
Specific identification.
e)
Lower of cost or market.
48.
Damaged, obsolete (out-of-date), and/or deteriorated goods that can be sold:
a)
Are never counted as inventory.
b)
Are included in inventory at their full cost.
c)
Are included in inventory at their net realizable value.
d)
Should be disposed of immediately.
e)
Are assigned a value of zero.
49.
Goods in transit are included in a purchaser's inventory:
a)
At any time during transit.
b)
When the goods are shipped FOB shipping point.
c)
When the supplier is responsible for freight charges.
d)
If the goods are shipped FOB destination.
e)
After the half-way point between the buyer and seller.
50.
Buffalo Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available:
The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Buffalo on December 28 and shipped FOB destination on that date. Buffalo did not receive the goods until January 2 of the following year.
The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000. The net realizable value of the damaged goods was $10,000.
Based on this information, the correct balance for ending inventory on December 31 is:
a)
374000
b)
384000
c)
460000
d)
422000
e)
438000
51.
Sandoval needs to determine its year-end inventory. The warehouse contains 36,000 units, of which 4,600 were damaged by flood and are not sellable. Another 3,600 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 5,600 units at a consignee's location. How many units should Sandoval include in its year-end inventory?
a)
37000
b)
45200
c)
40600
d)
49800
e)
33400
52.
Physical counts of inventory:
a)
Are not necessary under the perpetual system.
b)
Are used to adjust the Inventory account balance to the actual inventory available.
c)
Must be taken at least once a month.
d)
Requires the use of hand-held portable computers.
e)
Are not necessary under the cost-to benefit constraint.
53.
Which of the following statements related to goods on consignment is false?
a)
Goods on consignment are goods sent by the owner, called the consignor.
b)
A consignee sells goods for the owner.
c)
The consignor continues to own the consigned goods.
d)
The consignee reports the goods in its inventory until sold.
e)
The consignor reports the goods in its inventory until sold.
54.
A company had the following purchases and sales during its first month of operations:
Date Activities Units Acquired at Cost Units Sold at Retail
January 1 Purchase 10 units @ $4.00 = $40.00
January 9 Sales 6 units @ $12.00
January 17 Purchase 8 units @ $5.50 = $44.00
January 27 Sales 7 units @ $12.00
Using the perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)
a)
$40.00.
b)
$59.00.
c)
$25.00.
d)
$24.00.
e)
$23.35.
55.
Monarch Company uses a weighted-average perpetual inventory system, and has the following purchases and sales:
Date Activities Units Acquired at Cost Units Sold at Retail
January 1 Purchase 20 units @ $10 = $200
January 12 Sales 12 units sold
January 20 Purchase 18 units @ $11 = $198
What is the value of ending inventory? (Round average cost per unit to 2 decimal places, and final answer to the nearest dollar.)
a)
278
b)
272
c)
126
d)
398
e)
120
56.
A company's inventory records report the following in November of the current year:
Date Activities Units Acquired at Cost Units Sold at Retail
November 1 Beginning inventory 5 units @ $20 = $100
November 2 Purchase 10 units @ $22 = $220
November 8 Sales 12 units @ $54
November 12 Purchase 6 units @ $25 = $150
Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?
a)
254
b)
260
c)
282
d)
188
e)
210
57.
In applying the lower of cost or market method to LIFO inventory costing, market is defined as:
a)
Historical cost.
b)
Replacement cost.
c)
Current sales price.
d)
FIFO.
e)
LIFO.
58.
Lower of cost or market:
a)
Can be applied to each individual item, major categories of items, or the whole inventory.
b)
Is only applicable to companies using FIFO.
c)
Records only an increase in inventory value.
d)
Is only applicable to companies using LIFO.
e)
Reports all inventory items at full cost.
59.
Harris Company has the following products in its ending inventory. Compute lower of cost or market for inventory applied separately to each product.
Product Quantity Cost per Unit Market per Unit
Televisions 500 $ 500 $ 550
Radios 600 $ 30 $ 25
a)
250000
b)
268000
c)
265000
d)
290000
e)
275000
60.
When costs to purchase inventory regularly decline, which method of inventory costing will yield the lowest cost of goods sold?
a)
FIFO.
b)
LIFO.
c)
Weighted average.
d)
Specific identification.
e)
Gross margin.
100 %
