Financial Accounting - D102 WGU

Financial Accounting - D102 WGU Leave the first rating Students also studied Terms in this set (165) Western Governors UniversityD 196 Save D102 Financial Accounting WGU 52 terms Amy_WGUPreview wgu d102 pre assesment 64 terms Keto_BobPreview Financial Accounting - D102 286 terms paigejones711 Preview D102 Fi Teacher pjam Practice questions for this set Learn1 / 7Study using Learn A method of valuing inventory and determining cost of goods sold whereby the actual costs of specific inventory items are assigned to them AccountAn accounting record in which the results of transactions are accumulated; shows increases, decreases, and a balance Accounts ReceivableA current asset representing money due for services performed or merchandise sold on credit Choose an answer 1Transaction Analysis2Revenue Recognition 3Posting4Specific Identification Don't know?

On August 1 of Year 1, a company paid $7,200 for two years' rent. The rental period starts on August 1 of Year 1.Which debit or credit is correctly included in the adjusting journal entry necessary on December 31 of Year 1?

• Credit to rent expense for $1,500.
• Credit to prepaid rent for $5,100.
• Debit to rent expense for $1,500.
• Debit to rent expense for $5,100.

Correct: 3

On October 1 of Year 1, a company made a $60,000 cash loan to another company. The interest rate on the loan is 5%. No cash payments will be collected on the loan until September 30 of Year 2.Which debit or credit is correctly included in the adjusting journal entry necessary on the company's books (the lender) on December 31 with respect to this loan?

• Credit to interest revenue for $750.
• Debit to interest revenue for $2,250.
• Credit to interest revenue for $2,250.
• Debit to interest revenue for $750.

Correct: 2

On January 1, a company had office supplies costing $4,600. During the year, the company bought (and recorded) additional office supplies costing $9,900. On December 31, a physical count of office supplies revealed that supplies costing $2,900 remained.Which debit or credit is correctly included in the adjusting journal entry necessary on December 31 to record the supplies that the company used during the year?

• Credit to office supplies expense for $11,600.
• Debit to office supplies for $11,600.
• Credit to office supplies for $11,600.
• Debit to cash for $11,600.

Correct: 3

At the end of the year, before any closing entries are made, which account has a debit balance?Cost of goods sold Revenues: Credit or Debit on the book?Credits; they represent increases of equity Expenses and Dividends: Credit or Debit on the books? Debits; they represent decreases in equity

Steps to closing Entries:1. Separate Nominal accounts from real accounts

• Debit or credit each nominal account to make the balance = 0
• Corresponding debit or credit to Retained Earnings

How is the ending retained earnings calculated? Beginning retained earnings + Net Income - Dividends Net Incomethe difference between total revenue and total expenses On January 6, a credit sale was made for $1,000. Terms for the sale were 4/10, n/30. Cash for the sale was collected on January 25.Which debit or credit should be included in the journal entry to record the cash collection on January 25?

• Debit accounts receivable for $1,000
• Debit sales discounts for $960
• Debit cash for $1,000
• Debit sales discounts for $40

Correct: 2

A company's controller estimated bad debt expense using the percentage of accounts receivable method.Total sales for the year were $1,500,000. The ending balance in accounts receivable was $300,000. An examination of the outstanding accounts at the end of the year indicates that approximately 7% of these accounts will ultimately prove to be uncollectible. Before any adjustment, the balance in the allowance for bad debts is $4,000 (credit). Total accounts written off as uncollectible during the year were $15,000.Which debit or credit is included in the adjusting entry to record bad debt expense for the year?

• Credit allowance for bad debts for $21,000
• Debit allowance for bad debts for $25,000
• Debit allowance for bad debts for $15,000
• Credit allowance for bad debts for $17,000

Correct: 3

The following are payroll data for the employees of a

company:

Salaries Withholding Taxes Payable$20,000 Salaries Payable400,000Federal Withholding Taxes Payable48,000 FICA Taxes Payable, Employees26,000 What is needed in the journal entry to record the given employee payroll data?

• Credit to state withholding taxes payable $48,000
• Debit to salaries payable for $400,000
• Debit to salary expense for $400,000
• Credit to federal withholding taxes payable for $48,000

Correct: 3

In preparing a bank reconciliation, what is the proper treatment of a deposit in transit?

• Add it to the reported cash balance in the bank statement.
• Subtract it from the reported cash balance in the bank statement.
• Subtract it from the reported cash balance in the company's books.
• Add it to the reported cash balance in the company's books.

Correct: 1

How is revenue typically recorded with debits and credits?

• As a credit, representing an increase in equity.
• As a debit, representing an increase in assets.
• As a debit, representing a reduction in equity.
• As a credit, representing a reduction in assets.

Correct: 1

What is the proper way to record an increase in an asset account and an increase in an equity account?

• Asset, debit; equity, debit
• Asset, credit; equity, credit
• Asset, debit; equity, credit
• Asset, credit; equity, debit

Correct: 3

On January 1, a company had these assets, liabilities, and

equities:

Cash$100 Inventory$140Accounts payable$70 Paid-in capital$150 Retained earnings$20 During the year, the company entered into these

transactions:

Selling inventory costing $140 for a total of $200; cash of $30 was received, and the remaining $170 was put on account.Paying cash for rent of $45.Paying cash dividends of $30. What is this company's total equity at the end of the year?

1. 130

2. $150

3. $155

4. $210

Correct: 3

How are expenses typically recorded with debits and credits?

• As a debit, representing a reduction in equity.
• As a debit, representing an increase in assets.
• As a credit, representing a reduction in assets.
• As a credit, representing an increase in equity.

Correct: 3

What is reported in a multiple-step income statement that is not reported in a single-step income statement?

• Dividends
• Retained earnings
• Gross profit
• Cash collected from customers

Correct: 3

The following are some accounts from a company's

financial statements:

accounts receivable cost of goods sold cash retained earnings sales inventory income tax expense accounts payable Which set is a list of all of the items that are used in computing this company's net income?

• Sales, cost of goods sold, and income tax expense.
• Cash, retained earnings, and accounts payable.
• Inventory, accounts payable, and retained earnings.
• Cash, accounts receivable, and accounts payable.

Correct: 1

Here are some financial statement items for the year for a company.Cash received from customers Cash received from the sale of land Cash paid for dividends Cash paid to employees for wages Cash paid to purchase a new building Cash paid for rent Cash received as new investment from owners Which set of items is a list of items that are used in computing the company's financing cash flow for the year?

• Cash paid to purchase a new building and cash received from the sale of land.
• Cash received from customers and cash paid for rent.
• Cash paid for dividends and cash received as new investment from owners.
• Cash received from customers, and cash paid to employees for wages.

Correct: 3