ACCOUNTING INFORMATION SYSTEMS 1
1. Cal Farms reported supplies expense of $2,000,000 this year. The supplies.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>account decreased by $200,000 during the year to an ending balance of $400,000. What was the cost of supplies the Cal Farms purchased during the year?
A.$1,600,000
B.$2,200,000
C.$1,800,000
D.$2,400,000
2. Listed below are.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>account balances (in $millions) taken from the records of Symphony Stores. All of these are permanent accounts, except the last two that have yet to be closed. The installment receivables are current. Symphony uses a perpetual inventory system.
.0/msohtmlclip1/01/clip_image001.gif” alt=”https://my.pennfoster.com/exams/images/061500NR_Q16-19.gif”>
What is the amount of working capital for Symphony?
A.$98
B.$113
C.$143
D.$128
3. On December 31, 2011, the end of Larry’s Used.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>Cars first year of operations, the accounts receivable was $53,600. The company estimates that $1,200 of the year-end receivables will not be collected. Accounts receivable in the 2011 balance sheet will be valued at
A.$53,600.
B.$54,800.
C.$52,400.
D.$1,200.
4. In its first year of operations, Best Corp. had income before.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>tax of $500,000. Best made income tax payments totaling $210,000 during the year and has an income tax rate of 40%. What was Best’s net income for the year?
A.$294,000
B.$290,000
C.$300,000
D.$306,000
5. Yummy Foods purchased a two-year fire and extended coverage.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>insurance policy on August 1, 2011, and charged the $4,200 premium to Insurance expense. At its December 31, 2011, year-end, Yummy Foods would record which of the following adjusting entries?
a.
Insurance expense
875
?Prepaid insurance
875
b.
Prepaid insurance
875
?Insurance expense
875
c.
Insurance expense
875
Prepaid insurance
3,325
?Insurance payable
4,200
d.
Prepaid insurance
3,325
?Insurance expense
3,325
A.Option b
B.Option d
C.Option c
D.Option a
6. Janson Corporation Co.’s trial balance included the following.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>account balances at December 31, 2011:
Accounts payable
$25,000
Bond payable, due 2020
22,000
Salaries payable
16,000
Note payable, due 2012
20,000
Note payable, due 2016
40,000
What amount should be included in the.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>current liability section of Janson’s December 31, 2011, balance sheet?
A.$41,000
B.$101,000
C.$61,000
D.$63,000
7. On June 1, Royal Corp. began operating a service company with an initial cash investment by shareholders of $2,000,000. The company provided $6,400,000 of services in June and received full payment in July. Royal also incurred expenses of $3,000,000 in June that were paid in August. During June, Royal paid its shareholders cash dividends of $1,000,000. What was the company’s income before income taxes for the two months ended July 31 under the following methods of.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>accounting?
??
Cash Basis
Accrual Basis
a.
$3,400,000
$3,400,000
b.
$5,400,000
$2,400,000
c.
$6,400,000
$3,400,000
d.
$6,400,000
$2,400,000
A.Option c
B.Option b
C.Option a
D.Option d
8. Temporary accounts would not include
A.cost of goods sold.
B.depreciation expense.
C.salaries payable.
D.supplies expense.
9. On November 1, 2011, Tim’s Toys borrows $30,000,000 at 9% to finance the holiday sales season. The note is for a six-month term and both principal and interest are payable at maturity. What should be the balance of interest payable for the.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>loan as of December 31, 2011?
A.$1,350,000.
B.$112,500.
C.$450,000.
D.$225,000.
10. A cause-and-effect relationship is implicit in the
A.historical cost principle.
B.going concern assumption.
C.matching principle.
D.realization principle.
11. The mostlikely important flaw leading to the demise of the APB was the perceived lack of
A.importance.
B.competence.
C.independence.
D.confidence.
12. An example of a contra.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>account is
A.sales revenue.
B.accounts receivable.
C.depreciation expense.
D.accumulated depreciation.
13. Janson Corporation Co.’s trial balance included the following.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>account balances at December 31, 2011:
Accounts receivable
$12,000
Inventories
40,000
Patent
12,000
Investments
30,000
Prepaid.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>insurance
6,000
Note receivable, due 2014
50,000
Investments consist of treasury bills that were purchased in November and mature in January. Prepaid insurance is for the next two years. What amount should be included in the.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>current asset section of Janson’s December 31, 2011, balance sheet?
A.$135,000
B.$55,000
C.$88.000
D.$85,000
14. In its first year of operations Best Corp. had income before.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>tax of $500,000. Best made income tax payments totaling $210,000 during the year and has an income tax rate of 40%. What was Best’s net income for the year?
A.$290,000
B.$306,000
C.$294,000
D.$300,000
15. Based on recent financial statement data for Harmony Health Foods, Inc. (HHF), shown below, HHF’s debt-to-equity ratio is (rounded)
.0/msohtmlclip1/01/clip_image002.gif” alt=”https://my.pennfoster.com/exams/images/061500NR_Q36-38.gif”>
A.0.53.
B.0.75.
C.1.13.
16. Pat’s Custom.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>Tuxedo Shop maintains its records on the cash basis. During this past year Pat’s collected $42,000 in tailoring fees, and paid $14,000 in expenses. Depreciation expense totaled $2,000. Accounts receivable increased $1,500, supplies increased $4,000, and accrued liabilities increased $2,500. Pat’s accrual basis net income would be
A.$29,000.
B.$23,000.
C.$18,000.
D.$34,000.
17. SFAC No.5 focuses on
A.objectives of financial reporting.
B.qualitative characteristics of accounting information.
C.elements of financial statements.
D.recognition and measurement concepts in accounting.
18. Which of the following was the first private sector entity that set.pennfoster.com/StudentLMS/Student/Exams/Random.aspx” title=”Powered by Text-Enhance”>accounting standards in the United States?
A.AICPA
B.Committee on Accounting Procedure
C.Accounting Principles Board
D.Financial Accounting Standards Board