SBS MBA - Accounting Skills 505

If the indirect approach for the statement of cash flows is presented, which of the following items should be subtracted from accrual basis net income to derive cash flow from operating activities?

For purposes of calculating cash receipts from customers, which of the following adjustments should be made to convert accrual basis sales to cash basis sales?

In preparing the statement of cash flows, how should non-cash investing/financing activities be reported?

On a statement of cash flows, which of the following types of activities would not be disclosed in a separate section?

Which of the following activities would generally be regarded as a financing activity in preparing a statement of cash flows?

Ames Corporation's net accounts receivable were $750,000 on December 31, 20X1, and $1,250,000 on December 31, 20X2. Net cash sales for 20X2 were $3,300,000. The accounts receivable turnover ratio for 20X2 was 16. What were the total net sales for 20X2?

Thompson Corporation wrote off a $200 uncollectible account receivable against the $2,400 balance in its Allowance for Bad Debts account. Compare the current ratio before the write-off (X) with the current ratio after the write-off (Y).

Zhang Corporation had net income of $100,000 paid income taxes of $30,000, and had interest expense of $8,000. What was Zhang's times interest earned ratio?

Financial statement ratio analysis may be undertaken to study liquidity, turnover, profitability, and other indicators. To which does the current ratio most relate?

Gerber Department Store utilises the retail inventory method. Gerber's beginning inventory cost $140,000 and retailed for $280,000. Purchases for the period amounted to $390,000 and were priced to sell at twice that amount. Sales for the period, all at normal retail, were $600,000. How much is the cost of Gerber's estimated ending inventory?

Wonder Corporation failed to record the purchase of merchandise on account. The merchandise and related accounts payable should have been recorded but were not. What is the effect of these errors on assets, liabilities, retained earnings, and net income, respectively?

An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the ending inventory valuation is:

Which of the following inventory methods will always produce the same results under both a periodic and perpetual system?

Ritz Company agreed to purchase certain inventory items from Hostess Corporation. Hostess shipped the goods F.O.B. destination. On December 31, Ritz's accounting year-end, Ritz was aware that the goods had been shipped and would be received any day.

Inventory accounts should be classified in which section of a balance sheet?

Under the income statement approach to adjusting entries, the receipt of $5,000 of unearned revenue would be recorded by debiting Cash. What account should be credited?

At the end of the current accounting period, Johnson Company failed to record utilities consumed during the period. Johnson will be billed for the utilities during the next accounting period. As a result, current period assets, liabilities, equity, and income, respectively, are:

The appropriate journal entry to record equipment depreciation expense would consist of a debit to Depreciation Expense and a credit to which of the following accounts?

Adjusting entries at the end of an accounting period would not be required for which of the following?

For purposes of measuring business income, the life of a business is:

Which of the following errors will be disclosed in the preparation of a trial balance?

The trial balance:

Failure to record the receipt of a utility bill for services already received will result in:

The following comments each relate to the recording of journal entries. Which statement is true?

The following comments all relate to the recording process. Which of these statements is correct?

The basic sequence in the accounting process can best be described as:

Of the following account types, which would be increased by a debit?

Gerald has beginning total stockholder's equity of $160,000. During the year total assets increased by $240,000 and total liabilities increased by $120,000. Gerald's net income was $180,000. No additional investments were made; however, dividends did occur during the year. How much were the dividends?

Which of the following would not be included on a balance sheet?

Retained earning will change over time because of several factors. Which of the following factors would explain an increase in retained earnings?

Which of these items would be accounted for as an expense?

The accounting profession can be divided into three major categories; specifically, the practice of public accounting, private accounting, and governmental accounting. A somewhat unique and important service of public accounting is:

The primary private sector agency that oversees external financial reporting standards is the:

Which of the following equations properly represents a derivation of the fundamental accounting equation?

Wilson Company owns land that cost $100,000. If a "quick sale" of the land was necessary to generate cash, the company feels it would receive only $80,000. The company continues to report the asset on the balance sheet at $100,000. This is justified under which of the following concepts?

The proper journal entry to record Ransom Company's billing of clients for $500 of services rendered is:

The proper journal entry to record $1000 of Dividends paid by Myer's Corporation is:

Lynn Lipincott invested land valued at $5000 in her business. This transaction would be recorded by:

Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Which of the following journal entries would Blankenship ordinarily record on the Friday payday?

Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. What journal entry would be recorded (on Wednesday) if the end of the accounting period occurred on a Wednesday?

Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Blankenship's year-end occurred on Wednesday, at which time a correct adjusting entry was recorded. On the following Friday, which of the following payroll journal entries should be recorded?

On November 1, 20X1, Limit Company purchased a one-year insurance policy for $12,000. Limit Company debited Cash and credited Prepaid Insurance for $12,000. At the end of December, 20X1, $2,000 of insurance had expired. The journal entry to properly state all accounts involved on December 31, 20X1, would be:

Simmons Company received and recorded a $5,000 payment for services to be rendered in the future. If the income statement approach to adjusting entries is used, the appropriate adjusting entry at the end of the accounting period for $3,000 of revenue not yet earned would be:

Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year.

January 2 Beginning Inventory 500 units at $3.00
April 7 Purchased 1,100 units at $3.20
June 30 Purchased 400 units at $4.40
December 7 Purchased 1,600 units at $4.40

Sales during the year were 2,700 units at $5.00. If Hefty used the first-in, first-out method, ending inventory would be:

Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year.

January 2 Beginning Inventory 500 units at $3.00
April 7 Purchased 1,100 units at $3.20
June 30 Purchased 400 units at $4.00
December 7 Purchased 1,600 units at $4.40

Sales during the year were 2,700 units at $5.00. If Hefty used the periodic LIFO method, cost of goods sold would be:

Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year.

January 2 Beginning Inventory 500 units at $3.00
April 7 Purchased 1,100 units at $3.20
June 30 Purchased 400 units at $4.00
December 7 Purchased 1,600 units at $4.40

Sales during the year were 2,700 units at $5.00. If Hefty used the Weighted-Average method, gross profit would be:

Bernstein Corporation recently experienced a fire which destroyed all of its inventory. The following data have been reconstructed from partial accounting information, and pertain to the year up to the date of the fire.

Beginning inventory $20,000
Net Purchases $45,000
Sales $80,000
Gross Profit Rate 40%

Using the gross profit method, estimate the dollar amount of inventory which was destroyed in the fire.

Selected information for 20X1 for the Bernstein Company is as follows:

Cost of goods sold $6,000,000
Average Inventory $2,000,000
Net sales $8,000,000
Average receivables $3,000,000
Net Income $1,000,000

Assuming a 360-day business year, what was the inventory turnover ratio for Bernstein?