Accounting Assignment Questions In Tutorial Library

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TITLE: Accounting Assignment Questions

CLASS / COURSE: Accounting


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4. When a company has a financial leverage ratio close to 1 to 1, 
A. the company is primarily using debt financing for acquisition of its assets.
B. the creditors of the company would most likely be willing to give a loan to the company since debt is low.
C. the return to stockholders is lower than it would be if the ratio was higher.
D. both B and C are correct.
E. none of the above are correct.

5. At the end of December, the owner of an apartment complex realized that the December rent had not been collected from one of the tenants. December 31 was the end of the accounting year; therefore, the owner made the appropriate adjusting entry at that time. When the December rent was collected in January of the following year, the entry made by the apartment owner should include 
A. an increase (debit) to Rent revenue receivable.
B. a decrease (credit) to Rent revenue receivable.
C. a decrease (debit) to Rent revenue collected in advance.
D. an increase (credit) to Rent revenue.
E. a decrease (credit) to Cash.

7. Which of the following would cause retained earnings to decrease? 
A. Sale of service on credit.
B. Loss on disposal of equipment.
C. Dividend declared by the board of directors.
D. Both B and C cause retained earnings to decrease.
E. All of the above make retained earnings decrease.

8. Which of the following would not cause stockholders' equity to change? 
A. Sale of additional stock to investors.
B. Earning revenue for services performed.
C. Cash payment for dividends previously declared.
D. Declaration of a cash dividend to stockholders.
E. None of the above is correct.

9. On January 1, 2009 Gucci Brothers Inc. started the year with a $500,000 credit balance in retained earnings and $600,000 balance in capital stock. During 2009, the company earned net income of $100,000, declared a dividend of $15,000, and issued more stock for $25,000. What is total stockholders' equity on December 31, 2009? 
A. $1,100,000
B. $1,210,000
C. $1,225,000
D. $1,240,000
E. None of the above.




10. The Harris TV Store had the following transactions in August:

Complete the following statements:



 11. Explain why a $5,000 revenue collected in advance for service would be recorded as a debit to cash and a credit to a liability account. 
12. On October 1, 2009, World Services, Inc., was started with $100,000 invested by the owners as contributed capital. On October 31, the accounting records contained the following amounts:


Prepare an income statement in good form for October 31, 2009 which is the first month of operation. Ignore taxes. 

13. Closing entries 
A. are required to reduce the balances in the nominal accounts to zero at the end of each period.
B. transfer the components of net income to a stockholders' equity account each period.
C. establish a zero balance in all revenue and expense accounts at the end of each period.
D. are required so that the income statement accounts will be prepared to collect revenue and expense amounts for the subsequent period.
E. All of the above are correct.

14. At the end of 2009, the following data were taken from the accounts of Albert Company:


The 2009 closing entries would include a 
A. $80,000 net credit to Retained earnings.
B. $80,000 net debit to Retained earnings.
C. $90,000 debit to Retained earnings.
D. $90,000 credit to Retained earnings.
E. None of the above.

 15. Both the depreciation expense account and the accumulated depreciation account at the end of the first year of operations 
A. are closed.
B. appear in a trial balance prepared after the adjusting entries but before the closing entries.
C. are not closed at the end of the accounting period.
D. appear in a trial balance prepared prior to the adjusting and closing entries.
E. None of the above is correct.

1)    18. Ten independent transactions for Interstate Corporation are listed below. A list of accounts used to record the economic effects of transactions in terms of the fundamental accounting model is given below. You are to indicate the accounts to be debited and credited for each transaction by entering the appropriate letter in each blank.



19. Below are two related transactions for Golden Corporation. The annual accounting period ends December 31. For each date listed, give the required entry in journal format.

(a) December  1, 2009--Golden Corporation borrowed $250,000 and signed a note providing for 10% interest. The principal and interest are due in one year (on September 30, 2010).

(b) December 31, 2009--end of the annual accounting period. (If no entry is required, explain why). 

20. Bridge Company keeps a small inventory of supplies used for cleaning and maintenance purposes. On January 1, 2009, the inventory of supplies on hand was $2,000. During the year, supplies purchased were debited to the supplies inventory account in the amount of $6,500. On December 31, 2009, the inventory count of supplies in the storeroom was $1,750. Give the adjusting entry required at December 13, 2009. 
21. On November 1, 2009, Bruce Company leased some of its office space to Fairlane Company and immediately collected twelve months rent in advance of $600,000. Bruce debited cash and credited unearned rent revenue for $600,000. At the end of 2009 (the end of the accounting period), give the adjusting entry Fruce should make in respect to the rent. 
22. On December 1, 2009, Fleet Company paid $30,000 rent for some office space which was debited in full to the prepaid rent account. The rent was for three months. Assuming Fleet’s accounting year ends December 31, give the adjusting entry required on December 31, 2009. 

23. Below are four transactions that were completed during 2009 by Timber Lodge. The annual accounting period ends on December 31. Each transaction will require an adjusting entry at December 31, 2009. You are to provide the 2009 adjusting entries required for Timber Lodge.
(a) On July 1, 2009, Timber Lodge paid a two-year insurance premium for a policy on its facilities. This transaction was recorded as follows:


What is the December 31, 2009 adjusting entry needed:

(b) On December 31, 2009 a tenant renting some storage space from Timber Lodge had not paid the rent of $750 for December.
what is the December 31, 2009 adjusting entry needed:

(c) On September 1, 2009, Timber Lodge borrowed $25,000 cash and gave a one-year, 10 percent, note payable. The total interest of $2,500 is payable on the due date, August 31, 2010. The note was recorded as follows:


What is the December 31, 2009 Adjusting entry needed:

(d) On October 1, 2009, Timber Lodge collected $3,600 for rental of space two years in advance. The $3,600 collection was recorded as follows:

What is the December 31, 2009 adjusting entry needed: 

24. On January 1, 2008 the balance in the prepaid insurance account was $2,500. On December 31, 2008, after the 2008 adjusting entries were made, the balance of the prepaid insurance account was $1,200. During 2008, cash payments for insurance premiums amounted to $5,000, which was debited to the prepaid insurance account. Give the adjusting entry which must have been made at the end of 2008. 

25. On December 31, 2009, the manager of Jordan Creek Apartments noticed that four tenants had not paid their December rent amounting to $500 each (and not yet recorded). Assuming the calendar year is the accounting year, give the adjusting entry required on December 31, 2009. 




 On September 1, 2009, Fast Track, Inc. was started with $25,000 invested by the owners as contributed capital. On September 30, 2009, the accounting records contained the following amounts:



26. Prepare an income statement for the first month of Fast Track's operation. Ignore income taxes. Format is critical
27. Prepare a statement of stockholders' equity for September, the first month of operation. Ignore income taxes. Format is critical


28. Prepare a balance sheet for Fast Track, Inc.'s first month of operations. Format is critical.


31. Granger Corporation reported total assets of $5,200,000, total current liabilities of $2,300,000, and total long-term liabilities of $1,200,000. Therefore, the stockholders' equity was 
A. $ 100,000.
B. $ 800,000.
C. $1,600,000.
D. $1,700,000.
E. None of the above is correct.

35. Use the following items from Diamond Company's income statement to compute its net income:

Cost of Goods Sold


Selling, General & Administrative Expenses


Miscellaneous Income


Net Sales


Income Tax Expense


Net Loss from Discontinued Operations (net of tax)


Extraordinary Gain from Insurance settlement (net of tax)



What is Diamond Company's net income to be reported on the income statement? 
A. $110,000.
B. $160,000.
C. $185,000.
D. $210,000.
E. None of the above is correct.


 The adjusted trial balance of Lamont Corp. included the following accounts:



36. What amount of current assets would appear on the balance sheet? 
A. $72,000
B. $74,000
C. $83,000
D. $97,000
E. None of the above is correct.


37. What amount of current liabilities would appear on the balance sheet? 
A. $15,000
B. $19,000
C. $22,000
D. $24,000
E. None of the above is correct.


 38. For each of the following items, indicate whether it would appear in the operating, investing, or financing activities section of the statement of cash flows. Place a check mark in the appropriate column for each transaction. If neither an operating, investing, or financing activity is appropriate, place a check mark in the "none" column. Assume the indirect method is used for reporting.




39. Marissa Company is preparing a statement of cash flows using the indirect method. The following data are available:


Calculate cash flows from operating activities.     ______________


40.Brooks Company reported net income of $40,000 which included depreciation expense and depletion expense of $21,000 and $18,000, respectively. The following changes also occurred during 2009:


Calculate cash flows from operating activities. 




41.   Explain the importance of the Statement of Cash Flows.  What is the most important section and why?


42.   Give the journal entries for the transactions listed below for the perpetual inventory system

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