Why would a manager prefer the perpetual inventory system over the periodic system of inventory?
> Who elects the board of directors?
> In stock subscriptions, why does one credit Common Stock Subscribed?
> What is the purpose of the account Organization Costs?
> Explain the account Paid-In Capital in Excess of Par Value as it relates to exchange of stock for noncash assets.
> What is meant by a “side transaction” when a new partner is admitted by an existing partner’s selling the new partner equity?
> The statement of partners’ capital is a required report. Agree or disagree? Defend your position.
> Give an example of a fractional ratio.
> Explain why salary and interest allowances are not expenses for a partnership.
> What is the function of the Purchases account?
> Mutual agency could create unlimited liability. Agree or disagree? Defend your position.
> Explain how a company could operate even when being dissolved.
> The Smith Computer Center created its chart of accounts as follows: You will use this chart of accounts to complete the Continuing Problem. The following problem continues from Chapter 1. Assignment 1. Set up T accounts in a ledger and post the ending
> What is the function of the articles of partnership?
> List five characteristics of a partnership.
> What are the four steps of the liquidation process?
> Why would a partner who is withdrawing take more or less than book equity?
> When a partner withdraws, why would a partnership revalue its assets?
> What is meant by a “bonus” when a partner is admitted?
> How is the equity of a partnership different from that of a sole proprietorship?
> What purpose could a typical invoice approval form serve?
> A loss on an exchange of plant assets occurs when the book value of the old machine is more than the trade-in allowance. True or false?
> When a plant asset is sold, a loss results if the cash received is greater than book value. Agree or disagree? Please explain.
> Which method of depreciation does not deduct residual value in its calculation?
> The following problem continues from one chapter to the next, carrying the balances of each month forward. Each chapter focuses on the learning experience of the chapter, adds information as the business grows, and shows how critical the knowledge of acc
> A betterment is a revenue expenditure. True or false? Please explain.
> What is the purpose of the Modified Accelerated Cost Recovery System?
> What are three methods of calculating depreciation? Briefly explain the key points of each.
> What is the difference between revenue and capital expenditures?
> What is the purpose of the Land Improvements account?
> List and describe three intangible assets.
> What is the relationship between a purchase requisition and a purchase order?
> What is the purpose of the Accumulated Depletion account?
> Explain how the income tax method differs from the Accounting Principles Board ruling with regard to the recording of exchanges of plant assets that result in a loss.
> What types of costs are considered “reasonable and necessary” when determining the cost of an asset?
> Which inventory method provides the most current valuation of inventory on the balance sheet? Please explain.
> This comprehensive review problem requires you to complete the accounting cycle for Sousa Realty twice. This practice set allows you to review Chapters 1–5 while reinforcing the relationships between all parts of the accounting cycle. B
> During inflation, which inventory method will provide the lowest income on the income statement?
> What are the four methods of inventory valuation? Explain each.
> Must the flow of cost in inventory match the physical movement of merchandise? Please explain.
> Explain the relationship between the Merchandise Inventory account and the subsidiary inventory ledger.
> Why are there two entries required to record each sale in the perpetual inventory system?
> Why could the balance of the controlling account, Accounts Payable, equal the sum of the accounts payable subsidiary ledger during the month?
> In the perpetual system, what account is debited to record the cost of merchandise purchased?
> What are the two key accounts in the perpetual inventory system?
> Lyon Co. has used a perpetual inventory system for 6 months. The president of the company issued a memo stating that the new computer system failed to deliver acceptable standards in servicing the customers and that too many goods are out of stock. Fran,
> Why would a company use the retail method to determine the value of the ending inventory? Why would it use the gross profit method?
> When ending inventory is understated, what effect will it have on cost of goods sold and net income?
> Kevin Hoffaman works as a teller in Victory Bank. Yesterday, he looked up confidential information about promissory notes concerning several friends. Kevin told his girlfriend all about the confidential information. Do you think Kevin acted appropriately
> Explain why goods in transit (F.O.B. shipping point) to buyer and goods issued on consignment are added to inventory valuations.
> What is meant by a contingent liability?
> List the four steps to arrive at proceeds in the process of discounting a note.
> What is the normal balance of each creditor in the accounts payable subsidiary ledger?
> Explain what will happen if a maker defaults on a note. (Assume that the note has not been discounted.)
> Only matured notes are listed in the Notes Receivable account. Agree or disagree? Please discuss.
> Why is a subsidiary ledger not needed for notes?
> Notes Receivable is a current liability on the balance sheet. Accept or reject. Why?
> What is the difference between finding a maturity date by (a) days or (b) months?
> Explain the parts of a promissory note.
> Spring Co. bought merchandise from All Co. with terms 2/10, n/30. Joanne Ring, the bookkeeper, forgot to pay the bill within the first 10 days. She went to Mel Ryan, the head accountant, who told her to backdate the check so that it looked like the bill
> How could Discount on Notes Payable be adjusted?
> How is the effective interest rate calculated?
> What is the normal balance of the Discount on Notes Payable account?
> F.O.B. destination means that title to the goods will switch to the buyer when goods are shipped. Do you agree or disagree? Why?
> When could interest be deducted in advance by a lender?
> List three reasons why a company may use Notes Payable instead of Accounts Payable and whether the company is the maker or payee.
> Why would a company age its Accounts Receivable?
> In which approach is the balance of the Allowance for Doubtful Accounts considered when the estimate of Bad Debts Expense is made? Please explain.
> The income statement approach used to estimate bad debts is based on Accounts Receivable on the balance sheet. Agree or disagree? Why?
> Recording Bad Debts Expense is a closing entry. True or false? Defend your position.
> Explain why the Allowance for Doubtful Accounts is a contra-asset account.
> Sean Nah, the bookkeeper for Revell Co., received a bank statement from Lone Bank. Sean noticed a $250 mistake made by the bank in the company’s favor. Sean called his supervisor, who said that as long as it benefits the company, he should not tell the b
> When an account receivable is written off, Bad Debts Expense must be debited. True or false? Please discuss.
> What is net realizable value?
> Explain the difference between F.O.B. shipping point and F.O.B. destination.
> What is the purpose of the Allowance for Doubtful Accounts?
> Pete Sazich, the accountant for Moore Company, feels that all bad debts will be eliminated if credit transactions are done by credit card. He also feels that the cost of the credit cards should be added to the price of the goods. Pete feels that in the f
> Explain the purpose of the Bad Debts Recovered account.
> What is the purpose of using a direct write-off method?
> The trial balance for Damon’s Repair Service appears in Figure 4.24. Figure 4.24: Adjustment Data to Update Trial Balance a. Insurance expired, $600. b. Repair supplies on hand, $2,400. c. Depreciation on repair equipment, $600. d. W
> Update the trial balance for Kent’s Moving Co. (Figure 4.23) for December 31, 201X. Figure 4.23: Adjustment Data to Update Trial Balance a. Insurance expired, $200. b. Moving supplies on hand, $1,100. c. Depreciation on moving truck,
> The following transactions occurred in June 201X for A. One’s Placement Agency: The chart of accounts for A. One Placement Agency is as follows: Your tasks are to do the following: a. Set up the ledger based on the chart of accounts
> On June 1, 201X, Brenda Rennicke opened Brenda’s Art Studio. The following transactions occurred in June: Your tasks are to do the following: a. Set up the ledger based on the following chart of accounts using four-column accounts. b.
> Jason Lang operates Jason’s Cleaning Service. As the bookkeeper, you have been requested to journalize the following transactions: The chart of accounts for Jason’s Cleaning Service is as follows: 201X Oct. 1 Pa
> The chart of accounts for Adler’s Delivery Service is as follows: Chart of Accounts Assets …………………………………….…..………………….………………………… Revenue Cash 111 ………………………………………………….………… Delivery Fees Earned 411 Accounts Receivable 112 …………………………………………………………… Expenses O
> From the trial balance of Girtie Lillis, Attorney-at-Law given in Figure 2.7 (40 min) on page 62, prepare (a) an income statement for the month of May, (b) a statement of owner’s equity for the month ended May 31, and (c) a balance shee
> Brett Pillows opened a consulting company, and the following transactions resulted: A. Brett invested $20,000 in the consulting agency. B. Bought office equipment on account, $8,000. C. Agency received cash for consulting work that it completed for a cl
> James Tanson, a retired army officer, opened Tanson’s Catering Service. As his accountant, analyze the transactions listed next and present them in proper form. a. The analysis of the transactions by using the expanded accounting equat
> Why doesn’t net realizable value change when an account is written off in the use of the Allowance account?
> Jody Williams, owner of Williams Home Decorating Service, has requested that you prepare from the following balances (a) an income statement for September 201X, (b) a statement of owner’s equity for September, and (c) a balance sheet as
> Journalize the following transactions: a. Sold merchandise on account to Troy Co., invoice no. 10, $50. b. Received check from Brown Co., $300, less 3% discount. c. Cash sales, $104. d. Issued credit memorandum no. 2 to Troy Co. for defective merchandis
> From the following T accounts of Bill’s Cleaning Service, (a) foot and determine ending balances, and (b) prepare a trial balance in proper form for December 201X. Cash 111 Accounts Payable 211 Cleaning Fees Earned 411 (A) 12,000 (
> Ben Shea is the accountant for Shea’s Internet Service. From the following information, his task is to construct a balance sheet as of June 30, 201X, in proper form. Could you help him? Building $ 55,000 Cash $38,000 Accounts Payab
> The following transactions occurred in the opening and operation of Brenden’s Delivery Service. A. Brenden Oulette opened the delivery service by investing $21,000 from his personal savings account. B. Purchased used delivery trucks on account, $6,000.
> From the trial balance in Figure 25.19 and the provided year-end information, prepare a worksheet for Stapel Corporation (assume no adjustments). Figure 25.19: Year-End Figures Raw materials inventory ……â&
> As the bookkeeper of Bishop Manufacturing, you are to record the following transactions in the general journal for the month of November: a. Raw materials of $78,000 were issued from the storeroom. b. Charged $62,000 of direct labor to production. c. Sup
> An analysis of the accounts of Billings Manufacturing reveals the following data for the month ended October 31, 201X: Costs Incurred: Raw materials purchased, $128,000; direct labor, $134,000; manufacturing overhead, $52,500. These specific overheads
> Glover Company has requested that you (1) assign indirect expenses to its jewelry and shoes departments as appropriate and (2) prepare an income statement for June 201X showing departmental contribution margins along with net income. Assume a 30% tax rat
> From the following partial data, prepare an income statement showing departmental income before tax along with net income for Phil’s Corporation for the year ended December 31, 201X. Net Sales, TVs …â€&br
> Explain the matching principle in relation to recording Bad Debts Expense.
> Given the following information about the clothing and hardware departments of Phillips Company, prepare a departmental expense allocation sheet showing expenses by department. Allocation Basis Rent and Insurance: …â€&brv
