Exam 2: A Review of the Accounting Cycle

Which of the following regarding accrual versus cash-basis accounting is true?

The records of Majestic Co.showed the following account balances on December 31,2013: Assuming that the inventory balance at January 1,2013,is $152,000,prepare the entry to adjust the inventory accounts.

Which of the following accounts most likely would not appear in a post-closing trial balance?

The Supplies on Hand account balance at the beginning of the period was $6,600.Supplies totaling $12,825 were purchased during the period and debited to Supplies on Hand.A physical count shows $3,825 of Supplies on Hand at the end of the period.The proper journal entry at the end of the period

Comet Corporation's liability account balances at June 30,2013,included a 10 percent note payable.The note is dated October 1,2011,and carried an original principal amount of $600,000.The note is payable in three equal annual payments of $200,000 plus interest.The first interest and principal payment was made on October 1,2012.In Comet's June 30,2013,balance sheet,what amount should be reported as Interest Payable for this note?

On June 30,a company paid $3,600 for insurance premiums for the current year and debited the amount to Prepaid Insurance.At December 31,the bookkeeper forgot to record the amount expired.The omission has the following effect on the financial statements prepared December 31:

Failure to record depreciation expense at the end of an accounting period results in

Under the cash basis of accounting,

Caribou Corporation shows the following balances: Caribou paid suppliers $100,000 during the year.What is Caribou's cost of goods sold for the year?

Scott Co.reported an allowance for doubtful accounts of $28,000 (credit)at December 31,2013,before performing an aging of accounts receivable.As a result of the aging,Scott determined that an estimated $27,000 of the December 31,2013,accounts receivable would prove uncollectible.The adjusting entry required at December 31,2013,would be

Which of the following is true?

Record the following transactions and events of Royal Wulff Company in general journal form.If the item does not require a journal entry,write "no entry."

On March 1,2012,Forest Co.borrowed cash and signed a 36-month,interest-bearing note on which both the principal and interest are payable on February 28,2015.At December 31,2014,the liability for accrued interest should be

How would proceeds received in advance from the sale of nonrefundable tickets for the Super Bowl be reported in the seller's financial statements published before the Super Bowl?

At the end of the current fiscal year,an analysis of the payroll records of Bev Company showed accrued salaries of $22,200.The Accrued Salaries Payable account had a balance of $32,000 at the end of the current fiscal year,which was unchanged from its balance at the end of the prior fiscal year.The books of the company have not yet been closed.The entry needed in this situation would include a

In an accrual accounting system,

The following data are from a comparison of the balance sheets of Brassie Company as of December 31,2013,and December 31,2012: The following data are from Brassie's 2011 income statement: During 2013:

Which of the following is presented in a balance sheet?

Crescent Corporation's interest revenue for 2013 was $13,100.Accrued interest receivable on December 31,2013,was $2,275 and $1,875 on December 31,2012.The cash received for interest during 2013 was

Arid Company paid $1,704 on June 1,2013,for a two-year insurance policy and recorded the entire amount as Insurance Expense.The December 31,2013,adjusting entry is