MULTIPLE CHOICE 2. The historical cost of Jahn Company\'s ending inventory was l
ID: 2499438 • Letter: M
Question
MULTIPLE CHOICE
2. The historical cost of Jahn Company's ending inventory was less than the current replacement cost. Following US GAAP, which journal entry is required?
A. Debit cost of goods sold and credit inventory
B. Debit COGS and credit sales
C. Debit inventory and credit COGS
D. No journal entry is needed
3. The purchase of treasury stock is reported on the statement of cash flows as a:
A. Negative amount in the investing activities section
B. Positive amount in the investing activities section
C. Positive amount in the financing activities section
D. Negative amount in the financing activities section
7. Adjusting Entries:
A. are needed because errors have been made in previous journal entries
B. are need for all balance sheet accounts
C. must be made on a daily basis to record supplies used during that day.
D. are made before the financial statements can be prepared.
12. Every journal entry:
A. must increase at least one account and decrease one account
B. Must debit at least one account and credit at least one account
C. is recorded in either the journal or the ledger.
D. affects both an income statement account and a balance sheet account.
13. Which accounts are increased by debits?
A. salaries expense and common stock
B. cash and accounts payable
C. accounts payable and service revenue
D. accounts receivable and utilities expense
20. The category “other receivables” on the balance sheet includes:
A. interest receivable, dividend receivable, advances to employees
B. notes receivable, accounts receivable, interest receivable
C. accounts receivable, interest receivable
D. none of the above
21. Declaring and distributing stock dividends
A. is the distribution of cash to the stockholders
B. has no effect on total stockholders equity
C. reduced the total assets of the corporation
D. increases the total liabilities of the corporation and decreases the total stockholders equity
30. On the statement of cash flows, investing activities include:
A. repaying borrowed money
B. collecting cash on loans
C. selling stock to stockholders
D. obtaining cash from creditors
35. Which financial statement answers the following question: what is the company’s operating performance over the past year?
A. statement of retained earnings
B. statement of cash flows
C. income statement
D. balance sheet
36. The adjustment for an accrued expense:
A. decreases expenses and increases liabilities
B. increases expenses and increases liabilities
C. increases expenses and decreases assets
D. decreases expenses and increases assets
Explanation / Answer
2 D NO journal entry is required.
3 D Negative amount in financing activities
7 D Adjusting entries are required before financial statments are prepared.Like entry for closing stock.
12 B Journal enty must debit one account and credit one account atleast .
13 D An asset and an expense would increase by debits- so accounts receivable - asset, utilities - expense
20 A Receivables ae generally accounts receivable, others may have interest, dividend, advances so Option A
21 B Stck dividend has no change in shareholder equity. It increases one side the total shares outstanding , and reduces reserves, overall effcr being nil.
30 B Out of all the other options, the most possible investing activity is collecting cash on loan.
35 C The operating performance can be seen by Income statement
36 B It is recorded as an expense and in liabilities until finally paid off.
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