Due to an oversight, a company made no adjusting entry for accrued and unpaid em
ID: 2500798 • Letter: D
Question
Due to an oversight, a company made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31. This oversight would:
Select one:
a. Overstate net income by $24,000.
b. Overstate assets by $24,000.
c. Understate net income by $24,000.
d. Have no effect on net income
e. Understate assets by $24,000.
A company had expenses other than cost of goods sold of $250,000. Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.
Select one:
a. Sales: $350,000; gross profit: $150,000
b. Sales: $350,000; gross profit: $50,000
c. Sales: $500,000; gross profit: $50,000
d. Sales: $400,000; gross profit: $500,000
e. Sales: $500,000; gross profit: $400,000
When two clerks share the same cash register, which internal control principle is violated?
Select one:
a. Maintain adequate records
b. Insure assets
c. Apply technological controls
d. Establish responsibilities
e. Bond key employees
At the end of the day, the cash register's record shows $1,250, but the count of cash in the cash register is $1,245. The correct entry to record the cash sales for the day is:
Select one:
a.
1,250
1,245
5
b.
1,250
1,250
c.
5
5
d.
1,245
1,245
e.
1,245
5
1,250
At the end of the day, the cash register's record shows $1,000 but the count of cash in the register is $1,035. The proper entry to record this excess includes a:
Select one:
a. Credit to Cash for $35.
b. Debit to Cash for $35.
c. Credit to Cash Over and Short for $35.
d. Debit to Petty Cash for $35.
e. Debit to Cash Over and Short for $35.
The entry necessary to establish a petty cash fund should include:
Select one:
a. A debit to Petty Cash and a credit to Accounts Receivable.
b. A debit to Cash and a credit to Petty Cash.
c. A debit to Cash and a credit to Cash Over and Short.
d. A debit to Cash and a credit to Petty Cash Over and Short.
e. A debit to Petty Cash and a credit to Cash.
The entry to record reimbursement of the petty cash fund for postage expense should include:
Select one:
a. A debit to Petty Cash.
b. A debit to Cash Short and Over.
c. A debit to Supplies.
d. A debit to Postage Expense.
e. A debit to Cash.
Cash1,250
Sales1,245
Cash Over and Short5
Explanation / Answer
1)correc option is "A" -overstated net income by $ 24000
[as we have not recorded a wage expense amounting to 24000 ,as a result expense is overstated and net income is overstated as we have charge less expense]
2)correct option is "E" - Sales: $500,000; gross profit: $400,000
[Gross profit =net income +other expense = 150000 + 250000 = 400000]
[sales =COGS + Gross profit = 100000+400000 = 500000]
3)correct option is "D" --Establish responsibilities
4)correct option is "E"
cash debit 1245 , cash over and short debit 5 and sales credit 1250
5)correct optionis "C" -Credit to Cash Over and Short for $35.
6)correct option is "E" -A debit to Petty Cash and a credit to Cash.
7)correct option is "A" -A debit to Petty Cash
[as we have pais out of petty cash for postage expense so in order to reimburse such expense we have to debit petty cash]
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