ACCT 220 ACCT220 Final Exam Answers (UMUC)
ACCT220 Final Exam (UMUC)
Multiple choice questions allocated 1% point each. Make your selection by recording the letter in the answer box provided.
Question 7: On 2010 July 1, Frick Company purchased equipment for $400,000, and installation and testing costs totaled $40,000. The equipment has an estimated useful life of 10 years and an estimated salvage value of $40,000. If Frick uses the double-declining-depreciation method, the depreciation expense for 2010 is:
Question 8: The result of recording a capital expenditure as a revenue expenditure is an:
Question 9: A truck costing $45,000 and having an estimated salvage value of $4,500 and an original life of five years is exchanged for a new truck. The cash price of the new truck is $57,000, and a trade-in allowance of $22,500 is received. The old truck has been depreciated for three years using the straight-line method. The new truck would be recorded at:
Question 10: Which of the following is not an advantage of the corporate form of organization?
Question 11: Treasury stock should be shown on the balance sheet as a(n):
Question 12: When the stockholders invest cash in the business, what is the effect?
Question 13: The ending balance in retained earnings is shown in the:
Question 14: A cash dividend of $500 was declared and paid to stockholders. The correct journal entry to record the declaration is:
Question 15: If $3,000 has been earned by a company’s workers since the last payday in an accounting period, the necessary adjusting entry would be:
Question 16: The accrual basis of accounting:
Question 17: The need for adjusting entries is based on:
Question 18: Which of the following statements is false regarding the closing process?
Question 19: Which of the following statements is true regarding the classified balance sheet?
Question 20: The underlying assumptions of accounting includes all the following except:
Question 21: Frick Company began the accounting period with $60,000 of merchandise, and net cost of purchases was $240,000. A physical inventory showed $72,000 of merchandise unsold at the end of the period. The cost of goods sold of Frick Company for the period is:
Question 22: A classified income statement consists of all of the following major sections except for:
Question 23: A business purchased merchandise for $12,000 on account; terms are 2/10, n/30. If $2,000 of the merchandise was returned and the remaining amount due was paid within the discount period, the purchase discount would be:
Question 24: Frick Company began the accounting period with inventory of 3,000 units at $30 each. During the period, the company purchased an additional 5,000 units at $36 each and sold 4,600 units. Assume the use of periodic inventory procedure. The cost of ending inventory using weighted-average is:
Question 25: Frick Company began the accounting period with inventory of 3,000 units at $30 each. During the period, the company purchased an additional 5,000 units at $36 each and sold 4,600 units. Assume the use of periodic inventory procedure. The cost of goods sold using weighted-average is:
Question 26: During a period of rising prices, which inventory method might be expected to give the highest net income?
Question 27: The following information: related to the bank reconciliation of the Flip Company:
Question 28: In a bank reconciliation, deposits in transit should be:
Question 29: After the bank reconciliation is prepared, the entry to record bank service charges would have a credit to:
Question 30: Frick Company estimates uncollectible accounts using the percentage-of-receivables method and expects that 5 percent of outstanding receivables will be uncollectible for 2010. The balance in Accounts Receivable is $200,000, and the allowance account has a $3,000 credit balance before adjustment at year-end. The uncollectible accounts expense for 2010 will be:
Question 31: Frick Company issued its own $10,000, 90-day, non interest-bearing note to a bank. If the note is discounted at 10 percent, the proceeds to Frick are:
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