Question

1)

March	10	Accounts Payable		3,300
		Cash			3,300
		Paid creditors on account

What effect does this journal entry have on the accounts?

	a.	Decrease accounts payable, increase cash
	b.	Increase accounts payable, increase cash
	c.	Increase cash, decrease accounts payable
	d.	Decrease accounts payable, decrease cash

2)

The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry.

Wages Expense	2,150
Wages Payable		2,150
????????????????

a.

Record wages paid in advance

b.

Record the payment of wages

c.

Record wages expense incurred and to be paid next month

d) Record wages to be paid this month

3)

Use the following information for #20.

1.	$7,000 of merchandise inventory was ordered on September 2, 2009
2.	$3,000 of this merchandise was received on September 5, 2009
3.	On September 6, 2009, an invoice dated September 4, 2009, with terms of 3/10, net 30 for $3,250 which included a $250 prepaid freight cost, was received.
4.	On September 10, 2009, $800 of the merchandise was returned to the seller.

Based on the above information, what would be the cash payment if the company decides to pay the invoice on September 30, 2009?

	a.	$3,250
	b.	$3,000
	c.	$2,450
	d.	$2,384

4)

The inventory data for an item for September are:

Sep. 1	Inventory	20 units at $19
4	Sold	10 units
10	Purchased	30 units at $20
17	Sold	20 units
30	Purchased	10 units at $21

Using the perpetual system, costing by the last-in, first-out method, what is the cost of the merchandise sold for September?

	a.	$580
	b.	$590
	c.	$600
	d.	$610

5)

Use the following information to answer Questions 22.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May.

Date	Product Z	Units	Cost
May 3	Purchase	5	$30
May 10	Sale	3
May 17	Purchase	10	$34
May 20	Sale	6
May 23	Sale	3
May 30	Purchase	10	$40

Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the average inventory cost method.

	a.	$450
	b.	$452
	c.	$500
	d.	$502

6)

Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note?

a.

Notes Receivable                                                     6,000
Interest Revenue                                                          90
           Accounts Receivable—Dame Company                         6,000
           Interest Receivable                                                            90

b.

Notes Receivable                                                     6,000
           Accounts Receivable—Dame Company                          6,000

c.

Notes Receivable                                                     6,090
                  Accounts Receivable—Dame Company                   6,000
                  Interest Revenue                                                         90

d.. Notes Receivable                                                     6,090
           Accounts Receivable—Dame Company                           6,090

7)

Grayson Bank agrees to lend the Trust Company $100,000 on January 1. Trust Company signs a $100,000, 8%, 9-month note. The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is

	a.	Notes Payable                                     100,000 Interest Payable                                      6,000            Cash                                                         100,000            Interest Expense                                           6,000
	b.	Cash                                                108,000             Interest Expense                                        8,000             Notes Payable                                         108,000
	c.	Interest Expense                                  8,000 Cash                                                  92,000                         Notes Payable                             100,000
	d.	Cash                                                 100,000                         Notes Payable                             100,000

8)

Alma Corp. issues 1,000 shares of $10 par value common stock at $16 per share. When the transaction is recorded, credits are made to:

	a.	Common Stock $10,000 and Paid-in Capital in Excess of Par Value $6,000.
	b.	Common Stock $10,000 and Retained Earnings $6,000.
	c.	Common Stock $10,000 and Paid-in Capital in Excess of Stated Value $6,000.
	d.	Common Stock $16,000.

Answer 1

1.If assets credited, balance will be decreased and liabilities debited, balance in liability account will decrease. In given case, cash account is asset and accounts payable is liability. So, answer will be D

2.The given journal entry is adjusting entry for Wages incurred but not yet paid. So answer will be C

3.

Invoice value	$ 3,250
Less: Purchase return	$   (800)
Cash to be paid	$ 2,450

Answer is C.

4.

	Units	rate	amount
Sale from Sep 10 purchases	20	$ 20	$     400
Sale from beginning inventory	10	$ 19	$     190
Cost of goods sold	30		$     590

ANswer is B.

Please note that, maximum 4 questions can be answered at a time