Midterm Exam I Results for Manan Darbinyan
Score for this quiz: 52 out of 100
Submitted Oct 11 at 9pm
This attempt took 120 minutes.
Question 1
4 / 4 pts
Beta made a credit sale of $2,000 to a customer with terms FOB
Destination. Beta uses the perpetual inventory system and has a
gross profit percent of 25%. All of the merchandise was shipped
and received by the customer. What should be recorded?
Correct!
Debit Accounts Receivable 2,000, credit Sales 2,000, debit Cost of
Goods Sold 1,500, and credit Inventory 1,500
No journal entry should be recorded.
The correct answer is not listed.
Debit Accounts Receivable 2,000, and credit Sales 2,000
Debit Accounts Receivable 2,000, credit Sales 2,000, debit Cost of
Goods Sold 500, and credit Inventory 500
:
Question 2
4 / 4 pts
The following information describes Alpha’s quarterly dividend.
Date declared: February 1
Ex-dividend date: February 22
Date of record: February 24
Payment date: March 15
The following companies had purchased and/or sold Alpha’s
common stock on the dates listed.
Omega: Purchased on January 4 and sold it on February 21
Delta: Purchased on February 21 and sold it on February 25
Beta: Purchased on February 22 and sold it on March 16
Epsilon: Purchased on February 4 and sold it on February 23
Gamma: Purchased on February 24 and did not sell any stock
Which of these companies (if any) are entitled to receive a
dividend on March 15?
Epsilon and Beta
The correct answer is not listed.
Correct!
Delta and Epsilon
Omega and Gamma
:
Beta and Gamma
Question 3
Original Score: 0 / 4 pts Regraded Score: 0 / 4 pts
 This question has been regraded.
Beta has the following adjusted trial balance at the end of the year.
On the basis of its annual physical count of inventory at year-end,
Beta determined that its ending inventory was $30,000.
Debit
Cash
$ 20,000
Accounts receivable
40,000
Inventory
54,000
Supplies
6,000
Equipment
60,000
Accumulated depreciation
$30,000
Accounts payable
16,000
Salaries payable
3,000
Utilities payable
6,000
Income tax payable
4,000
Unearned sales revenue
1,000
Common stock
83,000
Retained earnings
15,000
Dividends
9,000
Sales
Sales returns and
allowances
Purchases
170,000
6,000
51,000
Purchase discounts
:
Credit
3,000
Rent expense
24,000
Salaries expense
45,000
Depreciation expense
6,000
Income tax expense
Total
10,000
$331,000
$331,000
Using this trial balance, the quick ratio is
2.1
1.0
1.3
Correct Answer
2.0
You Answered
The correct answer is not listed.
Question 4
0 / 4 pts
When comparing the perpetual inventory system to the periodic
inventory system, the advantage perpetual has is which of the
following?
It better tracks discounts.
It doesn't require a physical count of inventory.
Correct Answer
It better tracks shrinkage.
:
You Answered
It better tracks returns.
The correct answer is not listed.
Question 5
4 / 4 pts
Correcting the Trial Balance: Alpha failed to record the following two
transactions: Payment of $400 cash to purchase supplies, and the
issue of 500 shares of $1 par value common stock to new
stockholders for $1,500. What corrections, if any, should be made to
the trial balance?
Debit Column -400 +400 +1,500
Credit Column +1,000 +500
Answer 1:
Correct!
-400 +400 +1,500
Answer 2:
Correct!
+1,000 +500
Question 6
0 / 4 pts
Alpha purchased $600 of supplies and recorded them as an
:
"expense." If the beginning balance in the Supplies account was
$250 and the ending balance was $400, the required adjusting
journal entry at the end of the year is
The correct answer is not listed.
You Answered
Debit Supplies Expense 150 and credit Supplies 150
Debit Supplies Expense 450 and credit Supplies 450
Debit Supplies Expense 600 and credit Supplies 600
Correct Answer
Debit Supplies 150 and credit Supplies Expense 150
Question 7
4 / 4 pts
If both total assets and stockholders’ equity increased $2,500, the
transaction or AJE that caused this could have been which of the
following?
The prepayment of $2,500 to a vendor.
Correct!
A credit sale for $2,500.
The correct answer is not listed.
A normal AJE of $2,500 for supplies that were used.
:
A normal AJE for a deferred revenue of $2,500.
Question 8
4 / 4 pts
Correcting the Trial Balance: Beta received cash of $600 in advance
from a customer that has not yet been earned, but incorrectly
recorded it as a loan from the bank. What corrections, if any, should
be made to the trial balance?
Debit Column [ Select ]
Credit Column [ Select ]
Answer 1:
Correct!
No correction is required.
Answer 2:
Correct!
+600 -600
Question 9
0 / 4 pts
Beta sold land for cash of $40,000 (which was also the book value
of the land) and used $15,000 of that cash to purchase new
furniture for its sales office. What is the total effect of these two
transactions? Ignore any AJEs, gains, or losses.
:
You Answered
Total assets will be increased by $25,000.
The correct answer is not listed.
Correct Answer
Total assets will not change.
Total assets will be increased by $40,000.
Total assets will be decreased by $15,000.
0 / 4 pts
Question 10
Alpha has the following adjusted trial balance at the end of the
year. On the basis of its annual physical count of inventory at yearend, Alpha determined that its ending inventory was $25,000.
Debit
Cash
15,000
Inventory
36,000
Supplies
2,000
Accumulated
depreciation
Accounts payable
:
$ 9,000
Accounts
receivable
Equipment
Credit
60,000
$30,000
12,000
Salaries payable
3,000
Utilities payable
6,000
Income tax payable
4,000
Unearned sales
revenue
1,000
Common stock
56,000
Retained earnings
15,000
Dividends
3,000
Sales
130,000
Sales returns and
allowances
Purchases
6,000
51,000
Purchase
discounts
3,000
Rent expense
24,000
Salaries expense
45,000
Depreciation
expense
Income tax
expense
Total
6,000
3,000
$260,000 $260,000
The debit to the Retained Earnings account in the second closing
entry (as described in class) would be
You Answered
$163,000 or $133,000
$165,000 or $135,000
Correct Answer
$171,000 or $146,000
$165,000 or $146,000
:
The correct answer is not listed.
Question 11
4 / 4 pts
Beta had beginning inventory of $10 million, net purchases of $8
million, net sales of $20 million, and a gross profit percent of 20%.
Using the periodic inventory system, how much was Beta’s ending
inventory?
$4 million
$3 million
Correct!
$2 million
The correct answer is not listed.
$5 million
Question 12
4 / 4 pts
Beta purchased inventory on credit for $10,000 with terms
2/10,n30, FOB Shipping Point. By the end of the year, the
inventory had been shipped but not received. Using the periodic
inventory system, the correct journal entry for the purchase was
recorded. A few days after the purchase, Beta paid what was
:
owed within the discount period. What journal entry should Beta
have recorded for the payment?
Debit Accounts Payable 10,200, credit Cash 10,000, and credit
Purchase Discounts 200
Correct!
Debit Accounts Payable 10,000, credit Cash 9,800, and credit
Purchase Discounts 200
The correct answer is not listed.
Debit Cash 9,800, debit Purchase Discounts 200, and credit
Accounts Payable 10,000
Debit Accounts Payable 9,800, debit Purchase Discounts 200, and
credit Cash 10,000
Question 13
4 / 4 pts
Beta received $900 that satisfied an existing account receivable.
The journal entry to record this transaction is
Debit Cash 900 and credit Accounts Payable 900
Debit Cash 900 and credit Sales 900
The correct answer is not listed.
:
Correct!
Debit Cash 900 and credit Accounts Receivable 900
Debit Accounts Payable 900 and credit Cash 900
Question 14
0 / 4 pts
On October 1, Beta purchased equipment for $70,000, paying
$20,000 cash and issuing a 2-year, 5% note for the balance. The
equipment has a 5-year life and a $10,000 salvage value. The
straight-line method of depreciation is used. The AJE for the
depreciation that should be recorded on December 31 for the first
year will contain which of the following amounts?
Correct Answer
$3,000
The correct answer is not listed.
You Answered
$6,000
$12,000
$2,500
Question 15
0 / 4 pts
:
Using the information below, find Alpha’s total gross purchases (not
net purchases).
Ending inventory
$ 1,400
Beginning Inventory
Purchase returns &
allowances
4,000
600
Purchase discounts
400
Operating expenses
4,800
Sales returns & allowances
1,600
Sales discounts
Net Income
Income tax expense
Sales
400
1,600
400
16,600
$6,000
You Answered
$6,400
Correct Answer
$6,200
$6,800
The correct answer is not listed.
Question 16
Which of the following is false?
:
None of these answers are false.
0 / 4 pts
A related-party transaction is a transaction with individuals or
entities in which preferential treatment might exist and, therefore,
must be disclosed.
You Answered
An increase to the “purchase” account for the same amount as an
increase to the ending inventory has no effect on net income.
Correct Answer
A dividend decreases retained earnings on the payment date.
An expense creates (increases) a liability or uses up (decreases)
an asset, and a revenue creates (increases) an asset.
Question 17
0 / 4 pts
Beta received $10,000 cash from a customer for services to be
performed in the future, which was recorded as a revenue (not a
liability). By the end of the year, $4,000 of the services had not yet
been performed. The required adjusting journal entry to be
recorded on December 31 (end of year) is
You Answered
Debit Unearned Service Revenue 6,000 and credit Service
Revenue 6,000
:
Correct Answer
Debit Service Revenue 4,000 and credit Unearned Service
Revenue 4,000
Debit Service Revenue 6,000 and credit Unearned Service
Revenue 6,000
Debit Unearned Service Revenue 4,000 and credit Service
Revenue 4,000
The correct answer is not listed.
Question 18
4 / 4 pts
Alpha began the year with a credit balance in Retained Earnings
of $40,000 and a beginning balance of $30,000 in its Common
Stock account. During the year, Alpha sold (issued) additional
common stock for $10,000, declared dividends of $2,000 and had
net income of $14,000. Based on this information, what should
the ending balance be for Stockholders' Equity?
The correct answer is not listed.
$96,000
:
Correct!
$92,000
$94,000
$88,000
4 / 4 pts
Question 19
Beta has the following adjusted trial balance at the end of the year.
On the basis of its annual physical count of inventory at year-end,
Alpha determined that its ending inventory was $35,000.
Debit
Cash
20,000
Inventory
41,000
Supplies
2,000
Accumulated
depreciation
Accounts payable
60,000
$30,000
12,000
Salaries payable
3,000
Utilities payable
6,000
Income tax payable
4,000
Unearned sales
revenue
Common stock
:
$ 14,000
Accounts receivable
Equipment
Credit
1,000
63,000
Retained earnings
Dividends
12,000
8,000
Sales
145,000
Sales returns and
allowances
Purchases
6,000
43,000
Purchase discounts
3,000
Rent expense
24,000
Salaries expense
45,000
Depreciation expense
Income tax expense
Total
6,000
10,000
$279,000 $279,000
Using this trial balance and the periodic inventory system, net
income for the year is
The correct answer is not listed.
$20,000
Correct!
$8,000
$10,000
:
$12,000
Question 20
4 / 4 pts
Beta obtained and recorded a 3%, $20,000, 2-year loan from
Western Bank. The loan begins on July 1. The interest will be paid
when the loan is repaid. What adjusting journal entry should be
recorded on December 31 (end of year)?
Correct!
Debit Interest Expense 300 and credit Interest Payable 300
The correct answer is not listed.
Debit Interest Expense 600 and credit Interest Payable 600
Debit Interest Expense 1,200 and credit Interest Payable 1,200
Debit Interest Expense 400 and credit Interest Payable 400
Question 21
0 / 4 pts
Correcting the Trial Balance: Beta failed to record two transactions
that should have been recorded: (a) payment of cash of $2,000 to
satisfy an account payable and (b) a $10,000 credit sale using the
perpetual inventory system with a 40% gross profit percent. Ignore
any AJEs. What corrections, if any, should be made to the trial
balance?
:
Debit Column -10,000 +6,000 -6,000 -2,000
Credit Column -2,000 -10,000
Answer 1:
Correct Answer
-2,000 +10,000 +6,000 -6,000
You Answered
-10,000 +6,000 -6,000 -2,000
Answer 2:
Correct Answer
-2,000 +10,000
You Answered
-2,000 -10,000
Question 22
0 / 4 pts
Correcting the Trial Balance: Beta failed to record two types of normal
AJEs (as described in class): An accrued revenue for $1,000 and a
deferred expense for $1,600. What corrections, if any, should be
made to the trial balance?
Debit Column +1,000 +1,000
Credit Column +1,600 -1,600
Answer 1:
+1,000
You Answered
+1,000 +1,000
:
Correct Answer
Answer 2:
Correct Answer
+1,000 +1,600 -1,600
You Answered
+1,600 -1,600
Question 23
4 / 4 pts
Select the three source documents that many businesses match
before recording a purchase.
Purchase Order, Sales Invoice, Shipping Report
Receiving Report, Purchase Order, Sales Order
The correct answer is not listed.
Shipping Report, Sales Order, Sales Invoice
Correct!
Sales Invoice, Receiving Report, Purchase Order
Question 24
4 / 4 pts
Equipment with an original cost of $20,000 and a salvage value of
$2,000 is depreciated over 6 years using the straight-line method
of depreciation. At the end of the second year, what is the book
:
value of the equipment?
Correct!
$14,000
$12,000
$6,000
The correct answer is not listed.
$17,000
Question 25
0 / 4 pts
Correcting the Trial Balance: Five days after a cash sale for $4,000
was made and recorded, Alpha's customer returned this merchandise
for cash. Alpha did not record a journal entry for the return. The gross
profit percent was 30%. Alpha uses the perpetual inventory system.
What corrections, if any, should be made to the trial balance?
Debit Column +2,800 +2,800 -4,000 -4,000
Credit Column -1,400 -1,400 +2,000 +2,000
Answer 1:
Correct Answer
-2,800 +2,800 +4,000 -4,000
You Answered
+2,800 +2,800 -4,000 -4,000
Answer 2:
:
Correct Answer
No correction is required.
You Answered
-1,400 -1,400 +2,000 +2,000
:
Quiz Score: 52 out of 100