Exam 15: Accounting Principles and Contingent Liabilities in Business Operations

A company which uses special journals should record a transaction involving the purchase of merchandise for cash in a

McGoff Company deposits $20,000 in a fund at the end of each year for 5 years. The fund pays interest of 4% compounded annually. The balance in the fund at the end of 5 years is computed by multiplying

Wingate Company borrowed $90,000 on January 2, 2014. This amount plus accrued interest of 6% compounded annually will be repaid at the end of 3 years. What amount will Wingate repay at the end of the third year?

A good internal control feature is to have a written hiring authorization form completed before a new employee is added to the payroll.

The amounts appearing in the Inventory column of the cash payments journal are posted individually to the accounts in the accounts payable subsidiary ledger.

A lease where the intent is temporary use of the property by the lessee with continued ownership of the property by the lessor is called

Horton Company uses four special journals, (cash receipts, cash payments, sales, and purchases journal) in addition to a general journal. On November 1, 2014, the control accounts in the general ledger had the following balances: Cash $12,000, Accounts Receivable $200,000 and Accounts Payable $42,000. Selected information on the final line of the special journals for the month of November is presented below: Additional Data: The Sales Journal total was $41,000. A customer returned merchandise for credit for $360 and Norton Company returned store supplies to a supplier for credit for $400. Instructions (a) Determine the missing amounts in the special journals. (b) Determine the balances in the general ledger accounts (Cash, Accounts Receivable, and Accounts Payable) at the end of November.

Which of the following economic events would not be recorded in the cash receipts journal?

FICA taxes withheld and federal income taxes withheld are mandatory payroll deductions.

By January 31 following the end of a calendar year, an employer is required to provide each employee with a(n)

The future value of a single amount is the value at a future date of a given amount invested now, assuming compound interest.

Special journals are used to record unique transactions which do not occur very often.

Cash from sales of merchandise will be recorded in the

Suzy Douglas has been offered an investing opportunity which requires an immediate deposit of $73,540 and will earn 8% per year. At the end of the investment's life it will return $200,000 to Suzy. How many years must Suzy wait to receive the $200,000?

The _____________________ of an annuity is the sum of all the payments plus the accumulated compound interest on them.

When determining the proceeds received when issuing a bond, the factor applied to the amount of the bond principal is determined from the table of the

The effective federal unemployment tax rate is usually

Using special journals can save time in posting because column totals are often posted rather than individual entries.

The renting of an apartment is an example of a finance lease.

Sandra Sikes sells exercise machines for home use. The machines carry a 2-year warranty. Past experience indicates that 5% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is $40 for labor and $50 for parts per unit. During 2014, 3,000 exercise machines were sold at an average price of $800. During the year, 95 of the machines that were sold were repaired at the average price per unit. Instructions (a) Prepare the journal entry to record the repairs made under warranty. (b) Prepare the journal entry to record the warranty expense for the year.