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  1) Under the temporal method, which of the following items would be translated using the year-end spot rate? A) Inventory B) Land C) Long-term debentures D) Building 2) Under the temporal method, which of the following items would be translated using the historical rate? A) Inventory B) Accounts receivable C) Accounts payable D) Long-term debentures 3) Which of the following accounts would be translated to the reporting currency at the current rate of exchange for an integrated subsidiary? A) Sales occurring evenly throughout the year B) Deposits received from customers for services to be rendered C) Capital assets D) […]

  41) The entry to close Income Summary (net loss) was entered in reverse—Income Summary was debited and Capital was credited. This error will cause: A) Income Summary to have a credit balance. B) Income Summary to have a debit balance. C) the assets to be overstated. D) the liabilities to be understated. 42) Which of the following is a real account? A) Cash B) Fees Earned C) Utilities Expense D) Withdrawals 43) Which of the following is a temporary account? A) Wages Expense B) Service Fees Earned C) Rent Expense D) All of the above are temporary accounts 44) […]

  51) Depreciation of equipment was recorded twice this period. This would: A) overstate expenses and overstate assets. B) overstate expenses and understate assets. C) understate expenses and overstate assets. D) understate assets and understate assets. 52) Adjusting the supplies account will: A) decrease the total assets and increase the total expenses. B) decrease the total assets and decrease the total expenses. C) increase the total assets and increase the total expenses. D) increase the total assets and decrease the total expenses. 53) It's the end of the accounting period and no electric bill has been received (but the expense […]

  7.3   Learning Objective 7-3 1) Bob's Auction House's payroll for June includes the following data:   Gross earnings $4,000 Salaries subject to FICA:      6.2% OASDI 2,800    1.45% Medicare 4,000 Salaries subject to unemployment:      0.8% FUTA 2,000    2.0% SUTA 2,000 Other deductions include:      Federal income tax 700    State income tax 500   What is the net pay? A) $2,568.40 B) $1,942.40 C) $3,000.00 D) $2,798.40 2) Workers' Compensation Insurance is: A) paid by the employer to protect the employee against job-related injury or death. B) paid by the employee to protect […]

  71) Rent expired at the end of an accounting period requires an adjustment. 72) The original cost of equipment is not reduced by the amount of Depreciation Expense. 73) The spreading or allocating of the cost of a long-term asset is called discounting. 74) Accumulated Depreciation is a contra-asset account. 75) The worksheet contains a trial balance. 76) Depreciation Expense is debited when recording the depreciation for the period. 77) The use of straight-line depreciation results in equal amounts of depreciation being taken over a period of time. 78) Prepaid Rent Expense is a contra-asset with a normal balance […]