learning objective 3 6 questions 1 which of the following errors would a trial balan 4307574

Learning Objective 3.6 Questions

1) Which of the following errors would a trial balance help the accounting staff to find?

A) A sale for $8,300 occurred, and instead of debiting Cash for $8,300, Accounts Receivable was debited for $8,300.

B) A sale for $8,300 occurred, and instead of debiting Cash for $8,300, Accounts Payable was debited for $8,300.

C) A sale for $8,300 occurred, and instead of debiting Cash and crediting Sales for $8,300, Cash was credited and Sales was debited for $8,300.

D) A sale for $8,300 occurred, and instead of debiting Cash and crediting Sales for $8,300, Cash was debited for $700, and Sales was credited for $8,300.

E) A sale for $8,300 occurred and instead of debiting Cash for $8,300 and crediting Sales for $8,300, Cash was debited for $7,000 and Sales was credited for $7,000.

2) Failure to record depreciation at year-end will

A) overstate total liabilities.

B) understate assets.

C) overstate assets.

D) understate owners' equity.

E) overstate revenue.

3) Marc's Cleaning Services purchased merchandise inventory on account for $500. This transaction was properly recorded. A week later, Marc's Cleaning Services discovered a defect in the merchandise inventory and returned the merchandise inventory to the supplier for credit. As the accountant, you would tell the bookkeeper to record the return of the merchandise inventory by

A) debiting Merchandise Inventory and crediting Accounts Payable for $500.

B) debiting Accounts Payable and crediting Merchandise Inventory for $500.

C) debiting Merchandise Inventory and crediting Cash for $500.

D) debiting Cash and crediting Merchandise Inventory for $500.

E) debiting Cash and crediting Accounts Payable for $500.

4) Failure to record the expiration of a prepaid asset account will

A) overstate assets.

B) understate assets.

C) overstate liabilities.

D) understate liabilities.

E) understate net income.

5) Given the following two T-accounts, what can definitely be said about this company's transactions?

Cash       Acc. Receivable

(1) 17,700|              700 (2) (3)  1,400|1,900  (4)

(3)400|              700 (5)|

(4)1,900||

A) Transaction 1 indicates the company sold merchandise for $17,700.

B) Transaction 2 indicates the company bought merchandise for $700.

C) Transaction 3 indicates the company returned merchandise for $1,000.

D) Transaction 4 indicates the company received $1,900 from its credit customers.

E) Transaction 5 indicates the company paid $700 in salaries.

6) Whitestone Remodeling, Inc. journalized a $600 repair to the Supplies account in error. Which of the following is the correcting entry to be made?

A) Dr. Cr.

Accounts Payable600

Supplies600

B) Dr. Cr.

Repair Expense600

Cash600

C) Dr. Cr.

Repair Expense600

Supplies600

D) Dr. Cr.

Supplies600

Repair Expense600

E) Dr. Cr.

Cash600

Accounts Payable600

7) A credit customer paid $200 to Iron Works Company to reduce the customer's outstanding balance. However, Iron Works Company erroneously increased sales. Which of the following is the correcting entry to be made?

A) Dr. Cr.

Accounts Receivable200

Sales200

B) Dr. Cr.

Cash200

Accounts Receivable 200

C) Dr. Cr.

Cash200

Sales200

D) Dr. Cr.

Sales200

Accounts Receivable 200

E) Dr. Cr.

Sales 200

Cash200

8) Altoon Manufacturing's records were partially destroyed in a flood. The company does not know what sales have been for the year, but it does know all sales were on account. Also, the beginning accounts receivable balance was $19,000, and its accounts receivable balance at the time of the flood was $25,000. From the beginning of the year until the flood, cash collections from credit customers were $158,000. Given this information, what are Altoon Manufacturing's sales for the year until the flood?

A) $164,000

B) $114,000

C) $202,000

D) $209,000

E) $189,000

9) Which of the following is true regarding accounting errors?

A) Only the income statement of the second period is affected.

B) Only the balance sheet of the first period is affected.

C) Errors in the current period may be offset by errors in the next accounting period.

D) Only auditors can change them.

E) Because they reverse, it is not necessary to do anything after the fact.

10) If an expense is understated in the current period, then

A) net income is understated in the current period.

B) net income is overstated in the current period.

C) revenues are overstated in the current period.

D) revenues are understated in the current period.

E) dividends are overstated in the current period.