1Financial statements generally include all of the following except:Multiple ChoiceIncome statement.Federal income tax return. Balance sheet.Statement of cash flows.2In general, revenue is recognized when the earnings process is virtually complete and:Multiple ChoiceGoods or services are transferred to the customer. A purchase order is received.Cash is collected.Production is completed.3The matching principle:Multiple ChoiceProvides guidelines where expenses should be placed in the income statement.Describes how expenses should be split between Cost of Goods Sold and Selling Expense.Indicates how current assets and current liabilities are presented on the balance sheet.Requires all relevant expenses be recorded in the same period as the revenues that are generated from having incurred the expense.4The journal entry to record the borrowing of cash and the signing of a note payable involves:Multiple ChoiceA debit to note payable and a credit to cash.Debits to cash and interest expense and a credit to note payable.A debit to cash and a credit to note payable. All of these answer choices are incorrect.5The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $27,000. The current pay period ends on Friday, July 3. Neat Clothes is now preparing quarterly financial statements for the three months ended June 30. What is the adjusting entry to record accrued salaries at the end of June?Multiple ChoicePrepaid salaries8,100Salaries payable8,100Salaries expense18,900Prepaid salaries8,100Salaries payable27,000Salaries expense18,900Salaries payable18,900Salaries expense5,400Salaries payable5,4006On September 15, 2018, Oliver’s Mortuary received a $3,600, nine-month note bearing interest at an annual rate of 8% from the estate of Jay Hendrix for services rendered. Oliver’s has a December 31 year-end. What adjusting entry will the company record on December 31, 2018?Multiple ChoiceInterest receivable288Interest revenue84Cash204Interest receivable84Notes receivable84Interest receivable204Interest revenue204Interest receivable84Interest revenue847Somerset Leasing received $12,000 for 24 months’ rent in advance. How should Somerset record this transaction?Multiple ChoicePrepaid rent12,000Rent expense12,000Cash12,000Deferred revenue12,000Interest expense12,000Interest payable12,000Salaries expense12,000Salaries payable12,0008Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of merchandise, costing $620, and sold on account for $960?Multiple ChoiceInventory620Accounts receivable620Sales960Revenue from sales960Accounts receivable960Sales revenue960Cost of goods sold620Inventory620Inventory620Gain on sale340Sales revenue960Accounts receivable960Sales revenue620Gain on sale3409The following partial balance sheet ($ in thousands) for Paisano Seafood Inc. is shown below.AssetsLiabilities and EquityCurrent assets:Current liabilities:Cash$80Accounts payable$236Accounts receivable (net)187Other liabilities69Notes receivable69Total current liabilities305Inventories207Long-term liabilities107Prepaid expenses31Total liabilities412Total current assets574Shareholders’ equity:Plant assets (net)267Capital stock140Retained earnings289Total shareholders’ equity429Total assets$841Total liabilities and equity$841 The current ratio is (Round your answer to two decimal places.):Multiple Choice0.68.1.88.1.39.2.15.10The balance sheet reports:Multiple ChoiceNet income at a point in time.Cash flows for a period of time.Assets and equities at a point in time. Assets and liabilities for a period of time.11When accounting for a long-term construction contract for which revenue is recognized over time according to the percentage of completion, gross profit is recognized in any year is debited to:Multiple ChoiceConstruction in progress.Billings on construction contractDeferred incomeAccounts receivable12Under the realization principle, revenue is recognized as earned when there is reasonable certainty as to the collectibility of the asset to be received and:Multiple ChoiceThe sales price has been collected.The earnings process is virtually complete. Production is completed.A purchase order has been received.13On November 10 of the current year, Flores Mills sold carpet to a customer for $8,800 with credit terms 1/10, n/30. Flores uses the gross method of accounting for cash discounts. What is the correct entry for Flores on December 5, assuming the correct payment was received on that date?Multiple ChoiceCash8,800Accounts receivable8,800Cash8,800Accounts receivable8,712Interest revenue88Cash8,800Accounts receivable8,712Discounts revenue88Cash8,888Accounts receivable8,800Interest revenue8814The statement of cash flows reports cash flows from the activities of:Multiple Choiceoperating, purchasing, and investing.borrowing, paying, and investing.financing, investing, and operating. using, investing, and financing.15In a bank reconciliation, deposits outstanding are:Multiple ChoiceSubtracted from the bank balance.Added to the book balance.Added to the bank balance. Subtracted from the book balance.16Tammy wants to buy a car that costs $10,000 and wishes to know the amount of the monthly payments, which will be made at the first of the month, with interest of 12% on the unpaid balance. She should use a table for the:Multiple ChoicePresent value of $1.Present value of an ordinary annuity of $1.Present value of an annuity due of $1. Future value of an annuity due of $1.17George Jones is planning on a cruise for his 70th birthday party. He wants to know how much he should set aside at the beginning of each month at 6% interest to accumulate the sum of $4,800 in five years. He should use a table for the:Multiple ChoiceFuture value of an ordinary annuity of $1.Future value of an annuity due of $1. Future value of $1.Present value of an annuity due of $1.18Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):42 units at $10570 units at $74174 units at $50 Sales for the year totaled 268 units, leaving 18 units on hand at the end of the year. Ending inventory using the average cost method is: (Do not round unit cost calculation. Round your final answer to the nearest whole dollar amount.)Multiple Choice$1,890.$1,151.$950.$900.19The Hamlet Company uses the periodic inventory system. Information for 2018 is as follows:Sales$2,650,000Beginning inventory680,000Purchases1,200,000Purchase returns12,000Ending inventory740,000 Hamlet’s cost of goods sold for 2018 is:rev: 06_20_2017_QC_CS-91751Multiple Choice$1,522,000$1,188,000$1,140,000$1,128,00020In a period of declining costs, the use of which of the following inventory cost methods would result in the highest ending inventory?Multiple ChoiceFIFO.LIFO. Average cost.Weighted-average cost.
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