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UMUC ACCT 220 Complete Quiz Package Latest

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UMUC ACCT 220 Complete Quiz Package Latest

UMUC ACCT 220 Complete Quiz Package Latest

ACCT220

UMUC ACCT 220 Complete Quiz Package Latest

UMUC ACCT 220 Quiz 1 Latest

Question 1 Generally Accepted Accounting Principles (GAAP) allow companies to issue financial statements, using either the cash basis or the accrual basis of accounting, depending on their needs.

True

False

Question 2 Adjusting entries are done to make sure that expenses and revenues are recorded in the proper accounting period.

True

False

Question 3 A single journal entry must debit only one account and credit only one account for the same amount so that the entry is in balance.

True

False

Question 4 The current ratio is cash divided by current liabilities.

True

False

Question 5 Materiality is subjective. One company may consider $1,000 material and another company may not.

True

False

Multiple Choice Select the best answer for each of the following questions.

Question 6 Revenues are recorded when _______________.

goods or services are delivered to the customer

the check has cleared and the money is available for use

a check is received from a customer

a contract is signed

Question 7 Which of the following is NOT a liability?

unearned revenue

long-term debt

accumulated depreciation

accounts payable

Question 8 Management failing to reveal a default on a loan agreement will have violated what principle?

cost principle

ethics principle

matching principle

full-disclosure principle

Question 9 Expenses are recorded in the same period that related revenue is recorded, according to the _______________.

revenue-recognition principle

matching principle

accounting equation

cost principle

Question 10 The percentage-of-completion method recognizes revenue _______________.

at the end of the entire project for a multi-year contract

at 10% per month

based on an estimate of the portion of work complete

when the contracted work has begun View Feedback

Question 11 An asset cost $14,400 and is expected to last 8 years, at which time it will be sold for a scrap value of $2,400. Using straight-line depreciation, the monthly depreciation journal entry would be _______________.

debit depreciation expense and credit accumulated depreciation for $150

debit depreciation expense and credit accumulated depreciation for $125

debit accumulated depreciation and credit depreciation expense for $125

debit accumulated depreciation and credit depreciation expense for $150

Question 12 When money is collected from a customer previously billed, we _______________.

credit cash and debit accounts receivable

credit accounts payable and debit cash

credit cash and debit accounts payable

debit cash and credit accounts receivable

Question 13 Which event will have the effect of increasing retained earnings?

a customer pays us for a bill we sent last month

revenue is recognized

an expense is paid

a dividend is declared

Question 14 The income summary account is used to _______________.

set aside earned money available to owners

zero out expense and revenue accounts at the end of the period

record a history of income items

calculate net income

Question 15 The dividends payable account belongs on which statement?

Balance sheet

Income statement

Statement of retained earnings

Statement of cash flows

Journal Entries

Prepare the following journal entries. Dates and descriptions are not required.

Question 16 Paid $20,000 for stock in a newly formed corporation.

Prepare the journal entry to document this transaction. Dates and descriptions are not required

Question 17 Purchased photocopier for $5000 on account.

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

Question 18 Bought office supplies for immediate consumption for $200 cash.

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

Question 19 Billed customer $3500 for services performed

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

Question 20 Customer paid $2,000 on account. Prepare the journal entry to document this transaction. Dates and descriptions are not required. View Feedback

Question 21 Prepaid insurance account has a $2,400 balance for a twelve-month premium. Month one has ended.

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

Question 22 Office supplies on hand account has a balance of $1,955, and a physical count reveals that there are $715 worth of supplies remaining at month end.

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

Question 23 A customer had previously paid $500 in advance on an order. The order has now been shipped FOB destination.

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

Question 24 Sales tax of $100 is collected from a customer to be remitted to the state at a later date.

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

Question 25 At month end, $2,300 of wages are due to employees but not yet paid.

Prepare the journal entry to document this transaction. Dates and descriptions are not required.

UMUC ACCT 220 Quiz 2 Latest

Question 1 One advantage to using a perpetual inventory system is that the company never has to physically count the inventory.

True

False

Question 2 The weighted-average inventory method will likely result in neither the highest nor the lowest ending inventory.

True

False

Question 3 When calculating accounts receivable turnover, a company would prefer a higher number rather than a lower number (within reason).

True

False

Question 4 When performing a bank reconciliation, checks outstanding are added back to the bank balance.

True

False

Question 5 Usually the quick ratio will be a lower number than the current ratio.

True

False

Multiple Choice Select the best answer for each of the following questions.

Question 6 The bad-debt method that uses the accounts receivable aging report is _______________.

the percentage-of-sales method

the bad-debt expense method

the direct write-off method

the percentage-of-receivables method

Question 7 When it is determined that too much money has been set aside for uncollectible accounts, we will _______________.

credit reserve for uncollectible accounts

debit reserve for uncollectible accounts

credit cash

debit accounts receivable

Question 8 A customer whose account was previously written off unexpectedly pays us. If we are using the allowance method we would _______________.

debit bad-debt expense and credit cash

debit cash and credit bad-debt expense

debit reserve for uncollectible accounts and credit cash

debit accounts receivable and credit allowance for uncollectible accounts AND debit cash and credit accounts receivable

Question 9 When a retailer accepts a bank card (VISA or MasterCard), they will make what entry for the day’s receipts?

debit accounts receivable and credit sales

debit accounts receivable; credit sales, and credit “credit card expense”

debit cash and credit sales

debit cash and debit “credit card expense”; credit sales

Question 10 The company prepares, but does not yet pay, its first payroll of the new year. Salaries total $10,000 and 7.65% is withheld from paychecks for FICA tax. Ignore all other payroll deductions. The journal entries will be _______________.

debit wage expense $10,000 and credit wages payable 10,000; debit payroll tax expense for $1,530 and credit FICA tax payable $1,530

debit wage expense $10,000 and credit wages payable $10,000; debit payroll tax expense for $765 and credit FICA tax payable $765

debit wage expense $10,000 and debit payroll tax expense $765; credit wages payable $9,235 and credit FICA tax payable $1,530

debit wage expense $10,000; credit wages payable $8,470 and FICA tax payable $1,530

Question 11 A company buys a $10,000 bond at 102 as an investment. The correct entry is _______________.

debit investment in bonds and credit cash for $9,800

credit investment in bonds and debit cash for $10,200

debit investment in bonds and credit cash for $10,200

credit investment in bonds and debit cash for $9,800

Question 12 A company issues bonds having a stated value of $100,000 for $102,500. At maturity, the company will _______________.

debit bonds payable for $100,000

credit bonds payable for $102,500

credit bonds payable for $100,000

debit bonds payable for $102,500

Question 13 A company uses the percentage-of-receivables method for establishing the bad-debt reserve. They want the reserve balance to equal 0.5% of debts 30 days old or less, 2% of debts aged 31 to 60 days, and 4% of debts aged over 60 days. An aging report shows $780,000 relating to the past month, $232,600 relating to the prior month, and $89,200 relating to more than two months ago. The balance in the reserve account before adjustment is $10,175. What is the adjusting journal entry?

debit bad-debt expense, credit allowance for bad debts $1,945

debit bad-debt expense, credit accounts receivable $1,945

debit allowance for bad debts, credit bad-debt expense $1,945

debit bad-debt expense, credit allowance for bad debts $12,120

Question 14 A company is closing out the accounting period. The inventory balance at the beginning of the period was $222,750, and at the end of the period it was $215,600. Purchases of goods for resale during the period equaled $682,500. What was the cost of goods sold total?

$905,250

$682,500

$689,650

$675,350

Question 15 The following transactions during the month of January: 1/5 bought 10 units at $11.00 each; 1/8 bought 15 units at $11.25 each; 1/15 sold 8 units for $16 each; 1/22 bought 10 units at $11.50 each and sold 12 units for $16.50 each. The ending inventory is $693.75. What inventory costing method is the company using?

LIFO – periodic

LIFO – perpetual

FIFO

Weighted average

Short Answer

Prepare the following journal entries. Dates and descriptions are not required.

Question 16 What is the difference between the periodic-inventory and perpetual-inventory methods?

UMUC ACCT 220 Quiz 3 Latest

Question 1 A company buys a new parcel of land. Which of the following items is properly debited to the land account?

a. paving a road to access the land

b. demolishing an existing structure

c. the fees on a mortgage loan on the land

d. planting of trees and shrubs

Question 2 What type of asset is subject to depletion?

a. natural resources

b. a literary work

c. an intangible asset

d. a computer

Question 3 Which is NOT an intangible asset?

a. a patent on a new invention

b. a copyright on a musical work

c. an estimated amount of coal in a piece of owned land that has not yet been mined

d. a contract granting the company a right-of-way

Question 4 Which is NOT an advantage of a corporation compared with a partnership or sole proprietorship?

a. The corporation’s existence is unaffected by the death of an owner.

b. Owners enjoy limited liability.

c. It is easier to raise large amounts of capital.

d. The total tax burden is lower.

Question 5 If a corporation’s stock is purchased by the corporation on the open market but is held in treasury and not retired, which of the following is correct?

a. A credit will be recorded to the treasury stock account, which is a liability account.

b. A debit will be recorded to the treasury stock account, which is an equity account.

c. A debit will be recorded to the treasury stock account, which is a liability account.

d. A credit will be recorded to the treasury stock account, which is an equity account.

Short Answer

Prepare the following journal entries. Dates and descriptions are not required.

Question 6

A company sells a fixed asset (equipment) for $30,000. The asset originally cost $80,000 and had accumulated depreciation of $55,000 at the time of the sale. Record the journal entry to recognize the sale.

Question 7

A company scraps a fully depreciated piece of equipment originally costing $20,000. They did not receive any proceeds. Record the journal entry.

Question 8

A company sells a piece of plant equipment for $2,000. The original cost was $10,000, and the accumulated depreciation through the date of the sale was $6,500. Record the journal entry.

Question 9

A company buys a new pickup truck for $35,000 on the first day of the month. They will assume a 5-year life with a salvage value equal to 10% of the original cost. Record the first monthly depreciation journal entry.

Question 10

A company sells 200,000 shares of newly issued common stock having a par value of $1 for $8.50 per share. Record the journal entry.

Question 11

A company has net income of $4,580,000. There are 200,000 shares of $50 par, 6% preferred stock outstanding and 800,000 shares of common stock. What is the net income per common share (earnings per share)? Show your calculation.

Question 12

When would repair costs be capitalized?

Question 13

What will be the result to inventory values, cost of goods sold, and net income if the LIFO method is used during times of inflation?

Question 14

What is a contra account? Give an example.

Question 15

A mining company pays $10,000,000 for a piece of land that they estimate has a recoverable reserve of oil equal to 1,500,000 barrels. They estimate that they will be able to sell the land for $500,000 after they have extracted all of the oil. In year one, the company extracts 300,000 barrels of oil. They have made no prior entries for the removal of this oil. Record the journal entry to recognize the removal of this oil.

Question 16

A company has 800,000 shares of common stock outstanding and no preferred stock. On February 21, the board of directors declares a 25-cents-per-share dividend, payable on March 31 to shareholders of record as of March 15. Record the journal entry for the declaration of the dividend.

Question 17

A company has 800,000 shares of common stock outstanding and no preferred stock. On February 21, the board of directors declares a 25-cents-per-share dividend payable on March 31 to shareholders of record as of March 15. Record the journal entry for the payment of the dividend.

Question 18

A corporation has 50,000 shares of $10 par common stock. A 10% stock dividend is declared and the market value of the stock is $80 immediately before the declaration. Record the journal entry made on the date the dividend is declared but not paid.

Question 19

What is the difference between a stock split and a stock dividend?

Question 20

A company has 150,000 shares of common stock outstanding and 10,000 shares of $100 par value, 5% preferred stock outstanding. The company’s net income was $387,500.

What are the earnings per common share? (Show your calculation.)

UMUC ACCT 220 Complete Quiz Package Latest

UMUC ACCT 220 Complete Quiz Package Latest

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