A bank statement lists a $700 deposit as $70.

On bank reconciliation, this will appear as a:

$630 addition to the bank balance

Which of the following items used to reconcile cash does not require an adjusting entry?
deposits in transit

Encryption rearranges message by a special process

Navarro Company's Cash account shows an ending balance of $850, and the bank statement
shows an ending balance of $804. The bank statement shows a $26 service charge and an NSF
check for $190. A $300 deposit is in transit, and outstanding checks total $470. What is
Navarro's adjusted cash balance? $634

Which of the following statements about bank reconciliation is not correct? It is a formal
financial statement

When the Cash Short (Over) account has a credit balance, it is treated as what type of account?
Revenue

Separation of duties is not important for internal control of: personal, sensitive information of
customers

After performing a bank reconciliation, we need to journalize: all items on the book side of
reconciliation

Navarro Company's ending cash balance is $850. The bank statement shows a $26 service charge
and an NSF check for $190. A $300 deposit is in transit, and outstanding checks total $470.
What is Navarro's ending bank balance? $804

Buy Right, Inc. has a petty cash fund that carries a balance of $200. When the fund is returned,
there are expense receipts totaling $165 and there is $30 in cash left in the fund. What is the
journal entry to record the expenses? Expenses 165
Cash Short (Over) 5
Cash 170

When the Cash Short (Over) account has a debit balance, it is treated as what type of account?
expense

If the petty cash fund is not replenished, which of the following will be true? assets and
income will be overstated

Internal control organizational plan and related measures adopted by an entity to safeguard
assets, encourage adherence to company policies, promote operational efficiency, and ensure
accurate and reliable accounting records. DOES NOT INCLUDE SEPARATION OF DUTIES.
Which of the following is not a control over petty cash? keep an unlimited amount of cash on
hand

For which items must journal entries be prepared? any errors made on the books by the bank
reconciliation

Which of the following items does not cause a difference between the cash balance per bank and
book? voided checks

bank side of reconciliation deposits in transit(+), outstanding checks(-), and bank errors

book side of reconciliation bank collections(+), electronic fund transfers(+ receipts,

-payments), service charge(-), interest revenue(+), NSF checks(-), cost of printed checks(-), and
book errors

Which of the following is not an objective of internal control? to guarantee that a company
will not go bankrupt

Navarro Company's bank statement shows an ending balance of $804. The bank statement shows
a $26 service charge and an NSF check for $190. A $300 deposit is in transit, and outstanding
checks total $470. What is Navarro's ending cash balance appearing on the bank reconciliation?
$850

A bank statement lists a $700 deposit as $70. On a bank reconciliation, this will appear as a(n):
addition to the bank balance

The document that explains all differences between a company's cash records and the bank's
figures is called a(n): bank reconciliation

Darice Goodrich receives cash from customers. Her other assigned job is to post the collection to
customer accounts receivable. Her company has weak: separation of duties

What is the effect of using FIFO during a period of rising prices under a perpetual inventory
system? higher gross profit than LIFO

In a time of rising prices, which inventory valuation method will report higher cost of goods
sold? LIFO

During a period of rising prices, which inventory valuation method produces the lowest reported
net income? LIFO

If a company's inventory was destroyed by fire, but the accounting records were saved, the
method that would probably be used to estimate the amount of inventory lost would be: gross
profit method
Which of the following items would most likely be accounted for using the specific identification
inventory method? artistic painting

Which of the following accounting treatments violates the matching principle? inventory is
expensed in the period when it is purchased

Which of the following problems might explain an unusually high inventory turnover ratio?
The inventory may be too low, causing goods to be out of stock and sales to be lost.

The gross profit ratio for Profits, Inc., increased from 45% in 2010 to 50% in 2011. Which of the
following must be true? Profits' cost of sales was lower relative to sales in 2011 than in
2010.

During periods of falling prices, which inventory valuation method produces the lowest reported
net income? FIFO

Ending inventory= beginning inventory + purchases - COGS

Gross Profit= Sales-Cost of Goods Sold

Inventory would be found in: the current assets section of the statement of financial positions

In a time of falling prices, which inventory valuation method will report higher net income?
LIFO

During a period of falling prices, which inventory valuation method produces the lowest reported
net income? FIFO

During a period of falling prices, which inventory valuation method produces the highest
reported net income? LIFO

The lower-of-cost-or-market rule requires a company to: adjust the inventory balance
downward if its replacement cost is lower than its historical cost.

LIFO Method the last costs into inventory are the first costs out to cost of goods sold; leaves
oldest costs in ending inventory

FIFO Method first costs to inventory are the first costs out to cost of goods sold; ending
inventory based on the costs of most recent purchases

Land Cost= purchase price+property tax+title insurance+removal of old building

Land Improvement Cost= fence+sign+lighting

annual depreciation= (cost-residual value)/useful life

book value= cost - accumulated depreciation

sales revenue units sold x price

COGS= units sold x cost/unit

net sales= sales revenue - sales returns

gross profit % (net sales - COGS)/net sales

gain/loss= sale value - book value

Equipment costing $55,000 with a book value of $24,500 is sold for $21,000. The journal entry
will involve a: debit to loss on sale of $9,500

Fathom Company acquired a $50,000 machine on January 1, 20X4. The machine is estimated to
have a useful life of 5 years, and a residual value of $5,000. For unit depreciation purposes, the
machine is expected to produce 500,000 units.
If Fathom Company uses unit depreciation, and the company produces 75,000 units in 20X5,
what will be the depreciation expense for 20X5? $6,750

Pittsburg Resources acquired a coalmine for $6,000,000. The company's survey estimates that
120,000 tons of coal can be extracted from the mine, but environmental costs to close the mine
will be $360,000. In the first year of operations, 25,000 tons of coal was extracted.
Pittsburg Resources would recognize: depletion expense of $1,325,000

Treating capital expenditures as repairs and maintenance expense: overstates expenses and
understates net income

Which of the following accounting treatments violates the matching principle? Expensing the
replacement cost of the motor for a piece of equipment will extend the useful life of the
equipment.

If equipment is purchased for $200,000, freight costs are $3,800, sales tax amounts to $2,000,
and maintenance during the first year of use is $7,000, what is the cost of the equipment?
$205,800

Fathom Company acquired a $50,000 machine on January 1, 20X4. The machine is estimated to
have a useful life of 5 years, and a residual value of $5,000. For unit depreciation purposes, the
machine is expected to produce 500,000 units.
If Fathom Company uses double-declining-balance depreciation, what is the depreciation
expense in 20X6? $7,200

Fathom Company acquired a $50,000 machine on January 1, 20X4. The machine is estimated to
have a useful life of 5 years, and a residual value of $5,000. For unit depreciation purposes, the
machine is expected to produce 500,000 units.
If Fathom Company uses straight-line depreciation, what is the depreciation expense in 20X5?
$9,000

A major expenditure made to equipment that extends its useful life beyond the original estimate
is journalized by: debiting equipment

Fair Market, Inc. purchased land, a warehouse, and a delivery truck for $450,000. The appraised
values for the items are $300,000, $150,000 and $50,000, respectively. Fair Market should
record this purchase: as assets on the balance sheet: $270,000 for the land, $135,000 for the
building, and $45,000 for the delivery truck.

The process of expensing the cost of an intangible asset over its useful life is called:
amortization

Which of the following expenditures would be debited to an expense account? replacement of

tires

Fathom Company acquired a $50,000 machine on January 1, 20X4. The machine is estimated to
have a useful life of 5 years, and a residual value of $5,000. For unit depreciation purposes, the
machine is expected to produce 500,000 units.

What is the depreciable value of the machine acquired by Fathom Company? $45,000

Equipment costing $55,000 with a book value of $24,500 is sold for $21,000. The journal entry
will involve a: debit to accumulated depreciation for $30,500.

Intangible Asset asset with no physical form-a special right to current and expected future
benefits.

Which of the following should be recorded as an intangible asset? Cost to obtain exclusive
rights to manufacture a unique product

A bookkeeper did not record depreciation expense for a period. As a result: stockholder's
equity will be overstated

The process of expensing the cost of a natural resource over its useful life is called:
depletion

The net book value (or carrying value) of an asset is: cost of asset - accumulated
depreciation

A bookkeeper recorded a capital expenditure as an asset. As a result: there is no effect on

the accounting equation because capital expenditures should be recorded as assets, not expenses.
Westchester Company recently sold some used furniture for $3,800 cash. The furniture cost
$19,600 and had accumulated depreciation through the date of sale totaling $17,300. What is the
journal entry to record the sale of furniture? Cash 3,800
Accumulated Depreciation 17,300
Furniture 19,600
Gain 1,500

Equipment costing $20,000 with $17,800 of accumulated depreciation is sold for $2,500 cash.
The journal entry will involve a: debit to accumulated depreciation of $17,800

Which financial statement shows how much cash was paid for newly acquired property, plant
and equipment? statement of cash flows

Which depreciation method generally results in the greatest depreciation expense in the first full
year of an asset's life? double-decling balance method

Which of the following is true of Accumulated Depreciation? it is a contra asset

plant asset long-lived assets, such as land, buildings, and equipment, used in operation of a
business. COPYRIGHT IS NOT ONE.

straight-line depreciation method (cost-residual value)/useful life, in years

units-of-production depreciation (cost-residual value)/useful life, units of production; rate x

units produced in year

Double-Declining- Balance Method =1/useful life, in years x 2

depletion expense= cost-salvage value/estimated # of units x # units extracted