Test Bank: Financial Accounting Information for Decisions 6th Edition by Wild Test Bank

For This And Any Other test Bnaks, slotion Manuals, Quizess, Exams And Assignments Contact us At whiperhills@gmail.com

[Question]

140. Which of the following is the appropriate journal entry if a company purchases equipment costing $100,000 by paying cash of $10,000?

A. Debit to Cash, Debit to Equipment, Credit to Accounts Payable
B. No entry should be made
C. Debit to Equipment, Credit to Notes Payable, Credit to Cash
D. Debit to Cash, Debit to Notes Payable, Credit to Equipment
E. Debit to Equipment, Debit to Notes Payable, Credit to Cash

Answer: C

Bloom’s Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-P1

[Question]

141. What would be the account balance in the cash ledger account after the following transactions?

Owner investment	$100,000
Purchased Supplies with cash	$20,000
Received bill for one month of rent	$2,200
Paid wages	$800
Billed customer for services performed services performed	$1,250

A. $124,250
B. $80,150
C. $78,250
D. $79,200
E. $80,450

Answer: D

[Question]

142. What would be the account balance in the accounts receivable ledger account after the following transactions?

Performed services and left a bill	$4,200
Performed services and collected immediately	$3,500
Performed services and billed customer	$2,200
Performed services on account	$6,000
Received partial payment on account	$1,500

A. $17,400
B. $10,900
C. $14,400
D. $ 4,500
E. $ 2,000

Answer: B

[Question]

143. What would be the account balance in the revenue ledger account after the following transactions?

Performed services and left a bill	$4,200
Performed services and collected immediately	$3,500
Performed services and billed customer	$2,200
Performed services on account	$6,000
Received partial payment on account	$1,500

A. $17,400
B. $10,900
C. $14,400
D. $ 9,000
E. $15,900

Answer: E

[Question]

144. What would be the account balance in the revenue ledger account after the following transactions?

Performed services and left a bill	$4,200
Performed services and collected immediately	$3,500
Performed services and billed customer	$2,200
Performed services on account	$6,000
Received partial payment on account	$1,500

A. $17,400 Credit
B. $14,400 Credit
C. $14,400 Debit
D. $15,900 Credit
E. $15,900 Debit

Answer: D

[Question]

145. What are the total assets for Shiver Ice House?

Common Stock……$120,000 Accounts Payable…...$25,000

Cash……………….$116,640 Accounts Receivable..$22,450

Supplies………… $ 1,500 Office Equipment…...$23,300

Prepaid Rent……....$ 3,200 Unearned Revenue….$ 4,152

Revenue………….. $ 20,000 Utilities Expense…....$ 422

Retained Earnings...$ 30,000 Shaving Equipment…$31,640

A. $291,340
B. $106,962
C. $198,730
D. $218,730
E. $221,580

Answer: C

[Question]

146. What is ending retained earnings for Shiver Ice House?

Common Stock….$120,000 Accounts Payable…...$25,000

Cash……………..$116,640 Accounts Receivable..$22,450

Supplies………....$ 1,500 Office Equipment…...$23,300

Prepaid Rent…….$ 3,200 Unearned Revenue….$ 4,152

Revenue…………$ 20,000 Utilities Expense…....$ 422

Retained Earnings.$ 30,000 Shaving Equipment…$31,640

A. $19,578
B. $29,578
C. $23,728
D. $49,578
E. $45,000

Answer: D

[Question]

147. What is net income for Shiver Ice House?

Common Stock….$120,000 Accounts Payable…...$25,000

Cash……………..$116,640 Accounts Receivable..$22,450

Supplies…………$ 1,500 Office Equipment…...$23,300

Prepaid Rent…….$ 3,200 Unearned Revenue….$ 4,152

Revenue…………$ 20,000 Utilities Expense…....$ 422

Retained Earnings.$ 30,000 Shaving Equipment…$31,640

A. $19,578
B. $20,528
C. $23,728
D. $49,578
E. $24,578

Answer: A

[Question]

148. What is total for the debits on the Trial Balance for Shiver Ice House?

Common Stock….$120,000 Accounts Payable…...$25,000

Cash……………..$116,640 Accounts Receivable..$22,450

Supplies…………$ 1,500 Office Equipment…...$23,300

Prepaid Rent…….$ 3,200 Unearned Revenue….$ 4,152

Revenue…………$ 20,000 Utilities Expense…....$ 422

Retained Earnings.$ 30,000 Shaving Equipment…$31,640

A. $291,340
B. $106,964
C. $199,152
D. $193,390
E. $203.152

Answer: C

[Question]

149. Find net income using the following transactions.

1. Bill Co. paid $2,000 for one month rent

2. Bill Co. paid $1,200 for two weeks wages

3. Bill Co. performed $5,200 in consulting services on account

4. Bill Co billed a customer $1,500 for services performed

5. Bill Co. received $5,200 in payment for item 3

6. Bill Co performed services and immediately collected $2,000

7. Bill Co. paid $500 for advertising in the local paper

A. $10,200
B. $ 5,000
C. $ 8,700
D. $13,900
E. $ 7,000

Answer: B

[Question]

150. What would be the appropriate entry for the following transaction?

Bill Co. performed $5,200 in consulting services on account

A. Credit to Cash, Debit to Accounts Receivable
B. Debit to Revenue, Debit to Cash
C. Debit to Accounts Receivable, Credit to Cash
D. Debit to Revenue, Credit to Cash
E. Debit to Accounts Receivable, Credit to Revenue

Answer: E

Matching Questions

[Question]

151. Match the following definitions and terms by placing the number that identifies the best definition in the blank space next to the term.

1. Credit	The sources of accounting information.	5
2. Journal	An increase in an asset, dividend and expense account and decrease in a liability, common stock and revenue account; recorded on the left side of a T-account	7
3. Account	The process of transferring journal entry information to the ledger	9
4. Ledger	An accounting system where the impact of each transaction is recorded in at least two accounts; the sum of the debits for each entry must equal its credits	10
5. Source documents	A file containing all accounts of a company and their balances	4
6. Accounting records	A company's record of all transactions in one place that shows debits and credits for each transaction	2
7. Debit	A record of the increases and decreases in a specific asset, liability, equity, revenue or expense item	3
8. T-account	Decrease in an asset, dividend and expense account and increase in a liability, common stock and revenue account; recorded on the right side of a T-account	1
9. Posting	A simple account form used as a helpful tool in showing the effects of transactions and events on specific accounts	8
10. Double-entry accounting	Another name for the accounting books or simply the books	6

Bloom’s Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2, 02-C2

[Question]

152. Match the following definitions and terms by placing the number that identifies the best definition in the blank space next to the term.

1. Balance column account	An increase in an asset, dividend and expense account and a decrease in a liability, common stock and revenue account; recorded on the left side of a T-account	10
2. Debt ratio	A written promise to pay a definite sum of money on a specified future date	7
3. Account balance	A file containing all accounts of a company and their balances	5
4. Chart of accounts	A complete record of all transactions in one place that shows debits and credits for each transaction	6
5. Ledger	The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts	2
6. Journal	A list of all accounts used by a company and the identification number assigned to each account	4
7. Note payable	A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances	8
8. Trial balance	A decrease in an asset, dividend and expense account and an increase in a liability, common stock and revenue account; recorded on the right side of a T-account	9
9. Credit	The difference between total debits and total credits for an account including the beginning balance	3
10. Debit	An account with debit and credit columns for recording entries and a third column for showing the balance of the account after each entry	1

[Question]

153. Match the following definitions and terms by placing the number that identifies the best definition in the blank space next to the term.

1. Unearned revenues	The most flexible type of journal, it can be used to record any kind of transaction	10
2. Chart of accounts	A list of all accounts used by a company and the identification number assigned to each account	2
3. Note receivable	A written promise from a customer to pay a definite sum of money on a specified future date	3
4. Posting reference column	A simple form used as a helpful tool in understanding the effect of transactions and events on specific accounts	9
5. Posting	Liabilities created when customers pay in advance for products or services; satisfied by delivering the products or services in the future	1
6. Trial Balance	A journal entry that affects at least three accounts	7
7. Compound journal entry	A column in journals where individual account numbers are entered when entries are posted to ledger accounts	4
8. Account	The process of transferring journal entry information to the ledger	5
9. T-account	A record of the increases and decreases in a specific asset, liability, equity, revenue or expense item	8
10. General journal	A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances	6

[Question]

154. Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability (L) or equity (OE) by placing initials (R, E, A, L or OE) in the blanks.

1. Salary Expense
2. Accounts Payable
3. Prepaid Insurance
4. Unearned Fee Revenue
5. Fees Revenue
6. Accounts Receivable
7. Common Stock
8. Supplies
9. Retained Earnings
10. Cash
11. Equipment
12. Dividends

1. E
2. L
3. A
4. L
5. R
6. A
7. OE
8. A
9. OE
10. A
11. A
12. OE

Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C2

[Question]

155. The following accounts appear on either the Income Statement (IS) or Balance Sheet (BS). In the space provided next to each account write the letters is or BS, that identify the statement on which the account appears.

1. Accounts Payable
2. Unearned Fees Revenues
3. Office Equipment
4. Rent Expense
5. Fees Revenue
6.Wages Payable
7. Rent Expense
8. Cash
9. Common Stock
10. Notes Receivable

1. BS
2. BS
3. BS
4. IS
5. IS
6. BS
7. IS
8. BS
9. BS
10. BS

Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2

Essay Questions

[Question]

156. Vicki Lake is a computer consultant. Shown below are (a) several accounts in her ledger with each account preceded by an identification number and (b) several transactions completed by Lake. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.

1.	Accounts Payable	7.	Telephone Expense
2.	Accounts Receivable	8.	Unearned Consulting Fees
3.	Cash	9.	Common Stock
4.	Consulting Fees Earned	10.	Dividends
5.	Office Supplies	11.	Insurance Expense
6.	Office Supplies Expense	12.	Prepaid Insurance

		Debit	Credit
	Example
	Completed consulting work for a client	2	4
	who will pay at a later date
A	Received cash in advance from a customer
	for designing a software package
B	Purchased office supplies on credit

C	Paid for the supplies purchased in B

D	Received the telephone bill of the business
	and immediately paid it
E	Paid for a 3-year insurance policy

Answer:

	Debit	Credit
A	3	8
B	5	1
C	1	3
D	7	3
E	12	3

Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A1

[Question]

157. David Roberts is a real estate appraiser. Shown below are (a) several accounts in his ledger with each account preceded by an identification number and (b) several transactions completed by Roberts. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.

1.	Accounts Payable	8.	Office Supplies Expense
2.	Accounts Receivable	9.	Prepaid Insurance
3.	Appraisal Fees Earned	10.	Salaries Expense
4.	Cash	11.	Telephone Expense
5.	Insurance Expense	12.	Unearned Appraisal Fees
6.	Office Equipment	13.	Common Stock
7.	Office Supplies	14.	Dividends

Example		Debit	Credit
Completed an appraisal for a client who promised to pay at a later date.		2	3
A.	Received cash in advance for appraising an office building.
B.	Purchased office supplies on credit.
C.	Paid a cash dividend
D.	Received the telephone bill of the business and immediately paid it.
E.	Paid the salary of the office assistant.
F.	Paid for the supplies purchased in transaction B.
G.	Completed an appraisal for a client and immediately collected cash for the work done

Answer:

	Debit	Credit
A	4	12
B	7	1
C	14	4
D	11	4
E	10	4
F	1	4
G	4	3

Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1

[Question]

158. List the steps in processing transactions.

Answer: Business transactions and events are the starting point. Source documents are analyzed for the effects of the transactions and events on the accounting records. The information is recorded into the journal. The information is then posted to the accounts and a trial balance is prepared. The final step is the preparation of financial statements and reports for decision makers.

[Question]

159. Describe source documents and their purpose.

Answer: Source documents are the sources of information that identify and describe transactions and events. They provide objective and reliable evidence about transactions and their amounts. Examples of source documents include checks, invoices, sales receipts, credit card statements and bank statements. They can be in hard copy or electronic form.

Bloom’s Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2

[Question]

160. Explain how accounts are used in recording information about transactions.

Answer: Accounts are classified into three general categories: assets, liabilities and equity. Accounts are records of increases and decreases of specific items in these categories. The accounts serve as the information resource for financial statements and reports.

Bloom’s Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Decision Making
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2

[Question]

161. Explain the difference between a ledger and a chart of accounts.

Answer: A ledger is a record containing all of the accounts of a business and their balances. The chart of accounts is a list of all of the accounts in the ledger that includes an identification number for the accounts.

[Question]

162. Explain debits and credits and their role in the accounting system.

Answer: Debit refers to the left side of an account and credit refers to the right side of an account, both are part of the double-entry accounting system. This system is based on the concept that all transactions and events affect at least two accounts. The double entry system is organized around the accounting equation which states that assets = liabilities + equity. Assets, expenses and dividends have normal debit balances and liabilities, common stock and revenues have normal credit balances

Test Bank

Tuesday, 1 November 2016

Financial Accounting Information for Decisions 6th Edition by Wild Test Bank

For This And Any Other test Bnaks, slotion Manuals, Quizess, Exams And Assignments Contact us At whiperhills@gmail.com

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