Question 1

The financial statement effects template captures the effects of transactions on all four financial statements.

Accepted Answer

A) True 
 B)False  True

Question 2

Record the following transactions in the financial statements effects template below.

Accepted Answer

The answer of Record the following transactions in the financial...

Question 3

In December 2017, Beth Gilligan opened dry-cleaning store. The financial statement effects template below shows transactions for the month (a through i) and accounting adjustments (i through iv). 
Required:
Determine the ending balances for the accounts as of December 31, 2017 and prepare an income statement for Beth Gilligan's first month of operations and a balance sheet for December 31, 2017

Accepted Answer

The answer of In December 2017, Beth Gilligan opened dry-cleaning...

Question 4

During its first three months of operations, Cari's Bakery, Inc. purchased supplies such as plates, napkins, bags, and cutlery for $9,000 and recorded this as supplies inventory. Supplies on hand at the end of the first quarter, amount to $5,600.
To prepare financial statement for the first quarter, the company must record which of the following accounting adjustments?

Accepted Answer

A)  Increase Supplies expense by $5,600 and decrease Supplies inventory by $5,600 
B)  Increase Supplies expense by $3,400 and decrease Supplies inventory by $3,400 
C)  Increase Supplies inventory by $5,600 and decrease Supplies expense by $5,600 
D)  Increase Supplies inventory by $3,400 and decrease Supplies expense by $3,400 
E)  None of the above 
A)  Increase Supplies expense by $5,600 and decrease Supplies inventory by $5,600 
B)  Increase Supplies expense by $3,400 and decrease Supplies inventory by $3,400 
C)  Increase Supplies inventory by $5,600 and decrease Supplies expense by $5,600 
D)  Increase Supplies inventory by $3,400 and decrease Supplies expense by $3,400 
E)  None of the above

Question 5

Cari's Bakery, Inc., began operations in October 2017. The owner contributed cash of $18,000 and a delivery truck with fair value of $24,000 to the company.
Which of the following describes how these transactions would affect the company's equity accounts?

Accepted Answer

A)  Increase contributed capital by $42,000 
B)  Increase earned capital by $42,000 
C)  Increase contributed capital by $18,000 and earned capital by $24,000 
D)  Increase earned capital by $18,000 and contributed capital by $24,000 
E)  None of the above 
A)  Increase contributed capital by $42,000 
B)  Increase earned capital by $42,000 
C)  Increase contributed capital by $18,000 and earned capital by $24,000 
D)  Increase earned capital by $18,000 and contributed capital by $24,000 
E)  None of the above

Question 6

The journal entry for recording sales revenue that has been earned is to debit accounts receivable if cash will be received later, or credit unearned revenue if cash was received in advance.

Accepted Answer

A) True 
 B)False

Question 7

Explain what accounting adjustments are and why firms use them.

Accepted Answer

Companies make adjustments to more accur

Question 8

During fiscal 2016, Shoe Productions recorded inventory purchases on credit of $337.8 million. The financial statement effect of these purchase transactions would be to:

Accepted Answer

A)  Increase liabilities (Accounts payable) by $337.8 million 
B)  Decrease cash by $337.8 million 
C)  Increase expenses (Cost of goods sold) by $337.8 million 
D)  Decrease noncash assets (Inventory) by $337.8 million 
E)  Both A and D 
A)  Increase liabilities (Accounts payable) by $337.8 million 
B)  Decrease cash by $337.8 million 
C)  Increase expenses (Cost of goods sold) by $337.8 million 
D)  Decrease noncash assets (Inventory) by $337.8 million 
E)  Both A and D

Question 9

Revenue is typically recorded as earned when cash is received because that is when the company can measure the revenue objectively.

Accepted Answer

A) True 
 B)False

Question 10

The journal entry for recording cost of sales is to debit cost of sales expense and credit the inventory account.

Accepted Answer

A) True 
 B)False

Question 11

During the month of March 2017, Weimar World, a tax-preparation service, had the following transactions.
$\bullet$Billed $496,000 in revenues on credit
$\bullet$Received $164,000 from customers' accounts receivable
$\bullet$Incurred expenses of $194,000 but only paid $87,700 cash for these expenses
$\bullet$Prepaid $32,220 for computer services to be used next month
What was the company's accrual basis net income for the month?

Accepted Answer

A)  $ 302,000 
B)  $ 264,080 
C)  $ 41,860 
D)  $408,300 
E)  None of the above 
A)  $ 302,000 
B)  $ 264,080 
C)  $ 41,860 
D)  $408,300 
E)  None of the above

Question 12

Record the following transactions for Mouser Pet Foods, Inc., in the financial statements effects template below (in thousands).
a) Sell stock in company for $78,000
b) Obtain long-term bank loan of $30,000.
c) Purchase manufacturing equipment for $20,400 cash.
d) Rent manufacturing and warehousing space and pay $34,800 in advance for the year.
e) Purchase $30,000 of inventory, paying $6,000 in cash and the remaining amount on credit.
f) Sell half of the inventory purchased in Transaction e for $33,900 on account.
g) Pay $24,000 to creditors.
h) Make loan payment of $4,800 of which interest is $480 and the rest is principal.

Accepted Answer

The answer of Record the following transactions for Mouser Pet...

Question 13

How would a sale of $400 of inventory on credit affect the balance sheet if the cost of the inventory sold was $160?

Accepted Answer

A)  It would increase noncash assets by $400 and increase equity by $400 
B)  It would decrease noncash assets by $160 and decrease equity by $160 
C)  It would increase cash by $400 and increase equity by $400 
D)  Both A and B, above happen simultaneously 
E)  None of the above 
A)  It would increase noncash assets by $400 and increase equity by $400 
B)  It would decrease noncash assets by $160 and decrease equity by $160 
C)  It would increase cash by $400 and increase equity by $400 
D)  Both A and B, above happen simultaneously 
E)  None of the above

Question 14

During fiscal 2016, Caleres Inc. (formerly Brown Shoe Company), reported cost of goods sold of $1,517.4 million. Inventory at the start of the year was $546.7 million and at the end of the year was $585.8 million.
Which of the following describes the closing entry that the company will make for these accounts?

Accepted Answer

A)  Debit Inventory $39.1 million 
B)  Credit Inventory $585.8 million 
C)  Credit Cost of goods sold $1,517.4 million 
D)  Both A and C 
E)  None of the above 
A)  Debit Inventory $39.1 million 
B)  Credit Inventory $585.8 million 
C)  Credit Cost of goods sold $1,517.4 million 
D)  Both A and C 
E)  None of the above

Question 15

During 2016, Nike Inc., reported net income of $3,760 million. The company declared dividends of $1,022 million.
The closing entry for dividends would include which of the following?

Accepted Answer

A)  Credit Cash for $1,022 million 
B)  Credit Dividends for $1,022 million 
C)  Debit Net income for $1,022 million 
D)  Credit Retained earnings for $1,022 million 
E)  Debit Dividends for $1,022 million 
A)  Credit Cash for $1,022 million 
B)  Credit Dividends for $1,022 million 
C)  Debit Net income for $1,022 million 
D)  Credit Retained earnings for $1,022 million 
E)  Debit Dividends for $1,022 million

Question 16

On January 1, Fey Properties collected $7,200 for six months' rent in advance from a tenant renting an apartment. Fey Company prepares monthly financial statements.
Which of the following describes the required adjusting entry on January 31?

Accepted Answer

A)  Debit Cash for $7,200 and Credit Rent revenue for $7,200 
B)  Debit Unearned rent revenue for $1,200 and Credit Rent revenue for $1,200 
C)  Debit Rent revenue for $1,200 and Credit Unearned rent revenue for $1,200 
D)  Debit Cash for $6,000 and Credit Unearned rent revenue for $6,000 
E)  Debit Unearned rent revenue for $6,000 and Credit Cash for $6,000 
A)  Debit Cash for $7,200 and Credit Rent revenue for $7,200 
B)  Debit Unearned rent revenue for $1,200 and Credit Rent revenue for $1,200 
C)  Debit Rent revenue for $1,200 and Credit Unearned rent revenue for $1,200 
D)  Debit Cash for $6,000 and Credit Unearned rent revenue for $6,000 
E)  Debit Unearned rent revenue for $6,000 and Credit Cash for $6,000

Question 17

When shareholders contribute capital to a company, earned capital increases because the company has earned the shareholders' investments.

Accepted Answer

A) True 
 B)False

Question 18

At the end of fiscal 2017, Nick's Greenhouse counted inventory and determined that inventories of $87,160 were on hand. The end of fiscal year the unadjusted inventory account balance is $95,000. Inventory at the start of the year was $99,880.
Which of the following accounting adjustments should Nick's Greenhouse record?
      D) No accounting adjustment is required.

Accepted Answer

The answer of At the end of fiscal 2017, Nick's...

Question 19

Sales on account would produce what effect on the balance sheet?

Accepted Answer

A)  Increase the Revenue account 
B)  Increase noncash assets (Accounts receivable) 
C)  Increase cash assets 
D)  A and B 
E)  A, B and C 
A)  Increase the Revenue account 
B)  Increase noncash assets (Accounts receivable) 
C)  Increase cash assets 
D)  A and B 
E)  A, B and C

Question 20

Examine the financial statements effects template below. Then select the answer that best describes the transaction.

Accepted Answer

A)  Repay accounts payable of $120, net 
B)  Record accounts receivable of $600 and cash collected of $120 
C)  Purchase inventory of $600 partially on account 
D)  Purchase $600 of equipment on account 
E)  None of the above 
A)  Repay accounts payable of $120, net 
B)  Record accounts receivable of $600 and cash collected of $120 
C)  Purchase inventory of $600 partially on account 
D)  Purchase $600 of equipment on account 
E)  None of the above

The financial statement effects template captures the effects of transactions on all four financial statements.

Record the following transactions in the financial statements effects template below.

Cari's Bakery, Inc., began operations in October 2017. The owner contributed cash of $18,000 and a delivery truck with fair value of $24,000 to the company. Which of the following describes how these transactions would affect the company's equity accounts?

The journal entry for recording sales revenue that has been earned is to debit accounts receivable if cash will be received later, or credit unearned revenue if cash was received in advance.

Explain what accounting adjustments are and why firms use them.

During fiscal 2016, Shoe Productions recorded inventory purchases on credit of $337.8 million. The financial statement effect of these purchase transactions would be to:

Revenue is typically recorded as earned when cash is received because that is when the company can measure the revenue objectively.

The journal entry for recording cost of sales is to debit cost of sales expense and credit the inventory account.

How would a sale of $400 of inventory on credit affect the balance sheet if the cost of the inventory sold was $160?

During 2016, Nike Inc., reported net income of $3,760 million. The company declared dividends of $1,022 million. The closing entry for dividends would include which of the following?

On January 1, Fey Properties collected $7,200 for six months' rent in advance from a tenant renting an apartment. Fey Company prepares monthly financial statements. Which of the following describes the required adjusting entry on January 31?

When shareholders contribute capital to a company, earned capital increases because the company has earned the shareholders' investments.

Sales on account would produce what effect on the balance sheet?

Examine the financial statements effects template below. Then select the answer that best describes the transaction.

Financial Accounting for MBAS

Introducing Financial Statements

Analyzing and Interpreting Financial Statements

Revenues, Receivables, and Operating Expenses

Inventory, Accounts Payable, and Long-Term Assets

Current Liabilities and Long-Term Liabilities

Stock Transactions, Dividends, and EPS

Intercorporate Investments

Leases, Pensions, and Income Taxes

Cash Flows

Forecasting Financial Statements

Using Financial Statements for Valuation

Filters

Exam 3: Transactions, Adjustments, and Financial Statements

The financial statement effects template captures the effects of transactions on all four financial statements.

Record the following transactions in the financial statements effects template below.

Cari's Bakery, Inc., began operations in October 2017. The owner contributed cash of $18,000 and a delivery truck with fair value of $24,000 to the company. Which of the following describes how these transactions would affect the company's equity accounts?

The journal entry for recording sales revenue that has been earned is to debit accounts receivable if cash will be received later, or credit unearned revenue if cash was received in advance.

Explain what accounting adjustments are and why firms use them.

During fiscal 2016, Shoe Productions recorded inventory purchases on credit of $337.8 million. The financial statement effect of these purchase transactions would be to:

Revenue is typically recorded as earned when cash is received because that is when the company can measure the revenue objectively.

The journal entry for recording cost of sales is to debit cost of sales expense and credit the inventory account.

How would a sale of $400 of inventory on credit affect the balance sheet if the cost of the inventory sold was $160?

During 2016, Nike Inc., reported net income of $3,760 million. The company declared dividends of $1,022 million. The closing entry for dividends would include which of the following?

On January 1, Fey Properties collected $7,200 for six months' rent in advance from a tenant renting an apartment. Fey Company prepares monthly financial statements. Which of the following describes the required adjusting entry on January 31?

When shareholders contribute capital to a company, earned capital increases because the company has earned the shareholders' investments.

Sales on account would produce what effect on the balance sheet?

Examine the financial statements effects template below. Then select the answer that best describes the transaction.

Financial Accounting for MBAS

Introducing Financial Statements

Analyzing and Interpreting Financial Statements

Revenues, Receivables, and Operating Expenses

Inventory, Accounts Payable, and Long-Term Assets

Current Liabilities and Long-Term Liabilities

Stock Transactions, Dividends, and EPS

Intercorporate Investments

Leases, Pensions, and Income Taxes

Cash Flows

Forecasting Financial Statements

Using Financial Statements for Valuation

Filters