FBLA Accounting II

A proof of the equality of debits and credits in a general ledger is a(n):

B.trial balance

Expenses paid in one fiscal period but not reported as expenses until a later fiscal period

are initially recorded as:

B.prepaid expenses on the Balance Sheet

A written application requesting permission to form a corporation is called the:

D.articles of incorporation

What effect would a two for one stock split have?

C.The stock price will drop by half and the number of shares of stock outstanding will

double.

Cole and Madison are partners who decided to liquidate the partnership. Before the

liquidation, the partnership's balance sheet showed Cash $10,000, total "other assets",

$106,000; total liabilities, $88,000; Cole Capital, $15,100; and Madison, Capital, $12,900.

The "other assets" were sold for $118,000. After liabilities are paid, what is total distribution

to Cole?

D.$21,100

Wilson invests cash of $30,000 in the partnership. Jones invests the assets of an existing

business. Jones's balance sheet shows $8,000 in cash, $10,000 in accounts receivable,

$500 in allowance for uncollectible accounts, $7,000 for other current assets, $15,000 for

equipment, $5,000 for accumulated depreciation minus equipment, and $1,000 for accounts

payable. The total capital of the partnership will be:

C.$63,500

Marsh Corporation has a current assets valued at $15 million, inventory at $12 million, and

current liabilities valued at $6 million. The cost of goods sold was $60 million. Based on this

information, its current ratio is:

B.2.5

Use horizontal analysis to compute the percentage increase in sales: In 2009 sales were

$200,000 and in 2010 sales were $250,000. The result is:

D.sales increased by 25 percent

The entry to record the receipt of a note from a charge customer in settlement of the

account is:

C.debit Notes Receivable; credit Accounts Receivable

Using the aging method, Marsh Corporation estimates that uncollectible accounts will total

$700 this year. The Allowance for Uncollectible Accounts balance is $490. The adjusting

entry:

B.debit the expense account $490; credit the allowance account $490

Which one of the following items would be included in a cash budget?

A.dividends

Marsh Corporation reported sales of $160,000 (20,000 units). Fixed costs amounted to

$20,000 and income for the period was $80,000. The per-unit variable cost is:

D.$3.00

Which one of the following accounts is not considered factory overhead?

C.administrative office salaries

What is the cost of raw materials used if Raw Materials Purchases is $800,000; beginning

Raw Materials Inventory is $100,000; and, ending Raw Materials inventory is $150,000.

C.$750,000

The cost of supplies used by a specific department is an example of a(n):

D.direct expense

Three departments (A, B, C) occupy floor space of 15,000, 75,000, and 30,000 square feet

respectively. How much of this year's $225,000 rent expense will be allocated to the

Department C?

D.$56,250

Allowing workers time to work for nonprofit organizations, making donations to schools,

hospitals, and community projects, and sponsoring community programs such as the

Special Olympics is a part of which one of the following?

A.social responsibility

The principle that requires an accountant to protect information learned in the course of

work is called:

B.confidentiality

. The Employer's Quarterly Federal Tax Return is prepared using Form

C.941

The difference between the value of a liability or an asset and the amount of tax that is due

on the liability or asset is called a(n):

C.deferred tax

Find the cost assigned to ending merchandise inventory of 500 units using the weighted

average method.

Beginning Inventory 100 @ $18.00 = $1,800.00

First Purchase 400 @ $19.00 = 7,600.00

Second Purchase 800 @ $18.25 = 14,600.00

Third Purchase 500 @ $20.40 = 10,200.00

B.$9,500

What is estimated ending inventory using the Gross Profit method with the following data?

Marsh Corporation has a gross profit rate of 35 percent of net sales. Net Sales are $600,000

and total Merchandise Available for Sale is $525,000.

A.$135,000

. The journal entry to record the return of merchandise sold on account is:

B.debit Sales Returns & Allowances; credit Accounts Receivable

Which one of the following accounts would not be closed at the end of an accounting

period?

B.Capital Stock

Williams earns time-and-a-half for all hours worked in excess of 8 hours per day and double

time for all hours worked on Sunday. His hourly rate is $12. During the week, his timecard

recorded the following: Monday-8; Tuesday-9; Wednesday-9; Thursday-8; Friday-9;

Sunday 5. Williams' gross earnings for the week are:

D.$654

Employers do not make deductions from employees' paychecks for:

C.federal unemployment taxes

Using the sum of the year's digits method, calculate the depreciation for Year 3 for a plant

asset with a cost of $ 110,000, Salvage value of $20,000, and Useful life of 5 years.

B.$18,000

If the modified accelerated cost recovery system (MACRS) is used to depreciate an asset

for tax purposes, which one of the following statements is correct?

C.Depreciation will be greater for tax purposes than for financial reporting in the early

years

Revenues from sales are $450,000, sales discounts are $12,000, cost of goods sold is

$230,000, and operating expenses are $180,000. Income before taxes is:

D.$28,000

Marsh Corporation plans to sell security systems for $2,500 per unit. Variable costs are

$1,500 per unit and total fixed costs are $1,000,000. What is the break-even point in

dollars?

D.. $2,500,000

accounting

A set of concepts and techniques that are used to measure and report financial information about an economic unit.

accounting equation

A financial relationship at the heart of the accounting model: Assets = Liabilities + Owners' Equity

assets

The economic resources owned by an entity; entailing probable future benefits to the entity

auditing

The examination of transactions and systems that underlie an organization's financial statements with the goal or reporting thereon

balance sheet

A financial statement that presents a firm's assets, liabilities, and owners' equity at a particular point in time

certified public accountant (CPA)

An individual who is licensed by a state to practice public accounting

corporation

A form of business organization where ownership is represented by divisible units called shares of stock

dividends

Amounts paid from profits of a corporation to shareholders as a return on their investment in the stock of the entity

expenses

The costs incurred in producing revenues

financial accounting

An area of accounting that deals with external reporting to parties outside the firm; usually based on standardized rules and procedures

Financial Accounting Standards Board

An organization charged with producing standards for financial reporting in the USA

financial statements

Core financial reports that are prepared to represent the financial position and results of operations of a company

historical cost principle

The concept that many transactions and events are to be measured and reported at acquisition cost

income statement

A financial statement that summarizes the revenues, expenses, and results of operations for a specified period of time

internal auditor

A person within an organization who reviews and monitors the controls, procedures, and information of the organization

International Accounting Standards Board

An organization charged with producing accounting standards with global acceptance

liabilities

Amounts owed by an entity to others

managerial accounting

An area of accounting concerned with reporting results to managers and others who are internal to an organization

net income

The excess of revenues over expenses for a designated period of time

net loss

The excess of expenses over revenues for a designated period of time

owner investments

Resources provided to an organization by a person in exchange for a position of ownership in the organization

owners equity

The residual of assets minus liabilities, representing the collective interest or position of the entity's owners

partnership

A non-corporation representing an association of two or more persons organized to carry out a business plan for a profit motive

public accounting

Accounting activities provided by a person to the general public, typically relating to audit, tax and similar services

retained earnings

The excess of a corporation's income over its dividends

revenue

Inflows and other benefits received in exchange for the providing of goods and services

sole proprietorship

A non-corporation business owned by a sole individual

statement of retained earnings

A financial statement that discloses changes in retained earnings during a designated period of time; those changes usually attributable to income and dividends

Which equation properly represents a derivation of the fundamental accounting equation?

Assets = Liabilities + Owners' Equity

ASSETS