Accounting MCQs_12 Feb

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Description

1. One example of
a contra-asset is:
A. Sales Discount
B. Sales Returns and Allowances
C. Uncollectible Accounts Expense
D. None of the above are contra assets

2. The journal entry to record a sales return
made by a customer would include:
A. A debit to Accounts Receivable and a credit
to Sales Returns
B. A debit to Cash and Sales Returns
C. A debit to Sales Returns and a credit to
Accounts Receivable
D. A debit to Accounts Receivable and a credit
to Cash

3. Accounts receivable written off during the
year totaled $61,500 while the beginning and ending balance of Allowance for
Doubtful Accounts were $51,300 and $55,700, respectively. The amount of
uncollectible accounts expense for the period was:
A. $57,100
B. $65,900
C. $61,500
D. Cannot be determined from the information
given

4. Cady, Inc., had beginning and ending
accounts receivable balances of $35,000 and 32,000, respectively. During the
period, $100,000 was collected from credit customers. What was the amount of
credit sales during the period?
A. $135,000
B. $132,000
C. $100,000
D. $97,000

5. In times of rising prices, ______ generally
result(s) in the ______ ending inventory.
A. LIFO and FIFO, same
B. LIFO, higher
C. FIFO, lower
D. LIFO, lower

6. Affiliated Industries purchased a piece of
equipment for $5,500, FOB shipping point. The company paid freight of $225 and
installation costs of $485. During installation, the equipment was damaged
requiring $195 in repair costs. The total cost assigned to the equipment should
be:
A. $5,500
B. $5,725
C. $6,210
D. $6,405

7. Ivanhoe Enterprises acquired a piece of
equipment on January 3, 2007. The total cost of the equipment was $35,000.
Ivanhoe estimated that the equipment would be used for 8 years before being
sold for an estimated $7,000. Assuming the use of straight-line depreciation,
the total depreciation expense for the year ended December 31, 2007 was:
A. $3,500
B. $4,000
C. $4,375
D. $5,250

8. Brook side Enterprises acquired a piece of
machinery on January 3, 2006. The total cost of the machinery was $138,600.
Brook side estimated that the machinery would be used for 77,000 hours before
being sold for an estimated $3,850. Brook side uses the units-of-production
method of depreciation. Assuming the machine was used for 15,800 hours during
2006, 18,300 hours during 2007 and 17,400 hours during 2008, the balance in the
accumulated depreciation account on January 2, 2009 would be:
A. $45,900
B. $48,475
C. $90,125
D. $92,700

9. Irmelas Enterprises owns some equipment
with an original cost of $84,700 and accumulated depreciation of $41,650. If
the equipment is sold for $9,500 in cash plus a 9-month $30,000 note receivable
with a stated 12% interest rate, the gain or loss recognized on the sale would
be:
A. $3,550 loss
B. $3,550 gain
C. $2,150 loss
D. $2,150 gain

10. B&V Enterprises exchanged a used crane
with an original cost of $200,000 and accumulated depreciation of $140,000 for
a truck with a fair market value of $100,000. B&V also paid cash of
$25,000. What amount of gain should B&V report on this transaction?
A. $0
B. $15,000
C. $40,000
D. $100,000

11 – 15 Record the following journal
entries.
10/1 Sold $5,000 of tables on account the
terms of payment are 1/15n30

10/5 Customer returned $1,000 of tables

10/14 Customer paid $3,000 of the balance due
on the account

10/30 Customer paid the remaining balance due
on the account

16 – 20 Lorena Company purchased a van at a
total cost of $55,000. At the end of its useful life of 5 years, the van should
have a salvage value of $5,000. The van is expected to be driven 100,000 miles
over this time period as follows: year 1 25,000 miles, year 2 30,000 miles,
year 3 20,000 miles, year 4 15,000 miles, and year 5 10,000 miles. Prepare a
schedule showing the depreciation expense and year-end carrying value of the
van for each of the next two years under each of the following methods of depreciation:
• Straight Line
• Units-of-Production
• Double-declining-balance

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