Question 1

Internal control over payroll is not necessary because employees will complain if they do not receive the correct amount on their payroll checks.

Accepted Answer

A) True 
 B)False  False

Question 2

Ryan Corporation entered into the following transactions:
1. Hewitt Car Rental leased a car to Ryan Corporation for one year. Terms of the operating lease call for monthly payments of $750.
2. On January 1, 2014, Ryan Corporation entered into an agreement to lease 20 machines from Meeks Corporation. The terms of the lease agreement require an initial payment of $210,000 and then three annual rental payments of $210,000 beginning on December 31, 2014. The present value of the three rental payments is $522,238. The lease is a finance lease.
Instructions
Prepare the appropriate journal entries to be made by Ryan Corporation in January related to the lease transactions.

Accepted Answer

2014

Question 3

If $30,000 is deposited in a savings account at the end of each year and the account pays interest of 5% compounded annually, what will be the balance of the account at the end of 10 years?

Accepted Answer

A)   $48,867
B)   $315,000
C)   $377,337
D)   $450,000 C

Question 4

The entries in the Accounts Receivable Credit column of the cash receipts journal must be posted _______________ to the accounts in the accounts receivable subsidiary ledger and in _______________ to the control account in the general ledger.

Accepted Answer

The answer of The entries in the Accounts Receivable Credit...

Question 5

Match between columns
                        Premises: A general ledger account that summarizes detailed information in a subsidiary ledger.
A subsidiary ledger that contains accounts with individual creditors.
A special journal with more than one column.
Detailed information about a group of accounts with a common characteristic.
Used to record high volume, similar type transactions.

Accepted Answer

The Answer of Accounts payable ledger and Columnar journal and is...

Question 6

Which of the following statements concerning leases is true?

Accepted Answer

A)   Finance leases are favored by lessees.
B)   The appearance of the account, Leased Asset, on the statement of financial position, signifies an operating lease.
C)   The portion of a lease liability expected to be paid in the next year is reported as a current liability.
D)   Present value is irrelevant in accounting for leases.

Question 7

The accounts receivable _____________ provides detailed information about customer accounts which is summarized in one ______________ account in the general ledger.

Accepted Answer

The answer of The accounts receivable _____________ provides detailed information...

Question 8

Circle the correct answer to each situation.

Accepted Answer

The answer of Circle the correct answer to each situation....

Question 9

The journal entry to record the payroll for a period will include a credit to Salaries and Wages Payable for the gross

Accepted Answer

A)   amount less all payroll deductions.
B)   amount of all paychecks issued.
C)   pay less taxes payable.
D)   pay less voluntary deductions.

Question 10

An employee's time card is used to record the number of exemptions claimed by the employee for income tax withholding purposes.

Accepted Answer

A) True 
 B)False

Question 11

If Sloane Joyner invests $10,514.81 now and she will receive $30,000 at the end of 11 years, what annual rate of interest will she be earning on her investment?

Accepted Answer

A)   8%
B)   8.5%
C)   9%
D)   10%

Question 12

The use of special journals to record transactions

Accepted Answer

A)   eliminates the need for a general ledger.
B)   can save time in the posting process.
C)   eliminates the need for a general journal.
D)   should only be used if the volume of transactions is small.

Question 13

Which of the following would not be an appropriate heading for a column in the cash receipts journal?

Accepted Answer

A)   Cash
B)   Accounts Payable
C)   Sales Discounts
D)   Sales Revenue

Question 14

The decision to make long-term capital investments is best evaluated using discounting techniques that recognize the time value of money.

Accepted Answer

A) True 
 B)False

Question 15

The one characteristic that all entries recorded in a multiple-column purchases journal have in common is a

Accepted Answer

A)   credit to the Cash account.
B)   debit to the Cash account.
C)   debit to the Accounts Payable account.
D)   credit to the Accounts Payable account.

Question 16

Many companies calculate the future value of the cash flows involved in an investment in evaluating long-term capital investments.

Accepted Answer

A) True 
 B)False

Question 17

Lucie Ball's regular rate of pay is $15 per hour with one and one-half times her regular rate for any hours which exceed 40 hours per week. She worked 48 hours last week. Therefore, her gross wages were

Accepted Answer

A)   $720.
B)   $600.
C)   $780.
D)   $1,080.

Question 18

Easton Company began business on October 1. The sales journal, as it appeared at the end of the month, follows:  
1. Open general ledger T-accounts for Accounts Receivable (No. 112) and Sales Revenue (No. 401) and an accounts receivable subsidiary T-account ledger with an account for each customer. Make the appropriate postings from the sales journal. Fill in the appropriate posting references in the sales journal above.
2. Prove the accounts receivable subsidiary ledger by preparing a schedule of accounts receivable.

Accepted Answer

The answer of Easton Company began business on October 1....

Question 19

A cash payments journal should not be used to record transactions which require payment by check.

Accepted Answer

A) True 
 B)False

Question 20

A subsidiary ledger provides up-to-date information on specific account balances.

Accepted Answer

A) True 
 B)False

Exam 15: Accounting Principles and Contingent Liabilities in Business Operations

Internal control over payroll is not necessary because employees will complain if they do not receive the correct amount on their payroll checks.

If $30,000 is deposited in a savings account at the end of each year and the account pays interest of 5% compounded annually, what will be the balance of the account at the end of 10 years?

The entries in the Accounts Receivable Credit column of the cash receipts journal must be posted _ to the accounts in the accounts receivable subsidiary ledger and in _ to the control account in the general ledger.

Match the statements below with the appropriate item

Which of the following statements concerning leases is true?

The accounts receivable _ provides detailed information about customer accounts which is summarized in one __ account in the general ledger.

Circle the correct answer to each situation.

The journal entry to record the payroll for a period will include a credit to Salaries and Wages Payable for the gross

An employee's time card is used to record the number of exemptions claimed by the employee for income tax withholding purposes.

If Sloane Joyner invests $10,514.81 now and she will receive $30,000 at the end of 11 years, what annual rate of interest will she be earning on her investment?

The use of special journals to record transactions

Which of the following would not be an appropriate heading for a column in the cash receipts journal?

The decision to make long-term capital investments is best evaluated using discounting techniques that recognize the time value of money.

The one characteristic that all entries recorded in a multiple-column purchases journal have in common is a

Many companies calculate the future value of the cash flows involved in an investment in evaluating long-term capital investments.

Lucie Ball's regular rate of pay is $15 per hour with one and one-half times her regular rate for any hours which exceed 40 hours per week. She worked 48 hours last week. Therefore, her gross wages were

A cash payments journal should not be used to record transactions which require payment by check.

A subsidiary ledger provides up-to-date information on specific account balances.