Exam (elaborations)
ACG MIDTERM QUESTIONS AND ANSWERS
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ACG MIDTERM QUESTIONS AND ANSWERS
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Name: Score:143 Multiple choice questions
Term 1 of 143
Lemmon Company uses the percent-of-sales method to estimate uncollectible. Net credit
sales for the current year amount to $140,000, and management estimates 3% will be
uncollectible. The amount of expense to report on the income statement was $4,200.
Allowance for Doubtful Accounts prior to adjustment has a credit balance of $3,000. The
balance of Allowance for Doubtful accounts, after adjustment, will be...
$1,500
Note X Interest Rate X Time =
30,000 x 12% x 5/12 months =
Interest revenue: $1,500
$134
Total units available= 82
Total cost of goods available = $501
Cost avail./ # of units=Av.cost/Unit
= 6.11
# of units - Units sold = # on hand
82 - 60 = 22
# on hand x Av. cost/Unit=End. Inv.
22 x 6.11 = $134
$7,200
Unadj. All.+ Uncoll. Expense =
3,000 + 4,200 =
Adjusted allowance for doubtful expense: $7,200
The company has not paid this invoice, its paying for the goods received, and its paying
for the goods ordered
,Term 2 of 143
What asset isn't included in "cash equivalents" in a typical balance sheet?
U.s. government securities
Certain very low-risk equity securities
Debit accounts payable and credit cash
Added to the book balance
Term 3 of 143
Trisha Corporation has asked you to prepare its bank reconciliation at the end of the current
month. Use the following code letters to indicate how the item described would be reported
on the bank reconciliation
A- Deduct from the bank balance
B- Add to the book balance
C- Does not belong on the bank reconciliation
D- Deduct from the book balance
E- Add to the bank balance
________________________________________________
The bank statement showed interest earned of $50.
C- Accumulated depreciation
E- Add to the bank balance
G.P. % Inv. Turnover
High Low
B- Add to the book balance
Term 4 of 143
Net income appears on which financial statements?
income statement and statement of cash flows
statement of retained earnings and income statement
statement of changes in equity and balance sheet
balance sheet and cash flow statement
,Term 5 of 143
The unearned revenue account of Assistant Incorporated began 2016 with a normal balance of
$6,500 and ended 2016 with a normal balance of $16,000. During 2016, the unearned revenue
account was credited for $22,000 that Assistant will earn later. Based on these facts, how much
revenue did Assistant earn in 2016?
3.6 Times
Beg. Inv.+End. Inv./2= Av. Inv.
(18,000 + 21,000) /2 = 19,500
Cost of S.goods/Av. Inv.=
70,,500 =
Inventory turnover: 3.6
$1,500
Note X Interest Rate X Time =
30,000 x 12% x 5/12 months =
Interest revenue: $1,500
$24,000
25,000 + 9,000 - 10,000 = $24,000
$12,500
Beg. Un.R.+Adv.Pay-End. Un.R
6,500 +22,000 - 16,000
=Earned Revenue: $12,500
Term 6 of 143
During a period of rising prices, the inventory method that will yield the highest net income
and asset value is...
ORDERED
WEIGHTED AVERAGE
LRU
FIFO
, Term 7 of 143
Purchasing a building for $120,000 by paying cash of $5,000 and signing a note payable for
$115,000 will...
A credit to Interest Revenue for $15
Note x Int. Rate x Time = Am. of Int
2,000 x 9 x 1/12 = $15
Increase both total assets and liabilities by $115,000
Assets Liabilities
Build. 120,000
Cash (5,000)
N. Pay. 115,000
---------------------------------------
115,000 115,000
Improves both ratios
Revenue -Expenses = Net Inc. (loss)
310,000 - 145,000 = 165,000
Net Inc. -Dividends = Change in R.E
165,000 - 4,000 = 161,000
Ans. +161,000
Term 8 of 143
The basic summary device of accounting is the...
Liability
Journal
Account
Trial Balance
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