Accounting 101
Financial Accounting
Overs and Unders
Managerial Accounting
Balance Sheet
100
The term used to explain how quickly a company can convert assets into cash.
Liquidity
100
On December 31, 2016, Sub Inc. had a balance in its prepaid insurance account of $48,400. During 2017, $86,000 was paid for insurance. At the end of 2017, after adjusting entries were recorded, the balance in the prepaid insurance account was $42,000. 

Insurance expense for 2017 would be...

$92,400

Insurance expense =$48,400 + $86,000 - $42,000 = $92,400
100
Anthony borrowed money from the bank but erroneously recorded it as a cash sale.



Assets - N

Liabilities - U

Net Income - O

   

100
In general, costs incurred in the factory that do not qualify as either direct or indirect labor are called...
Manufacturing Overhead
100
Unearned Revenue appears?
As a Liability on the Balance Sheet
200
Provide users of Financial Statements with assurance that statements are verifiable and presented in conformity with GAAP.
Audit
200
In the first year of operations BAP Corp. had income before taxes of $400,000. BAP made income tax payments totaling $150,000 during the year and has an income tax rate of 40%. What is the balance in income tax payable at the end of the year?

$10,000 credit.


Income tax expense = $400,000 x 40% = $160,000

Income Tax Payable

150,000    160,000

                 10,000


200
Anthony failed to record the return of merchandise for cash from a customer (periodic inventory system).
Assets - O

Liabilities - N

Net Income - O

200
The level of activity at which total revenues equal total costs.
The Break-even Point
200
Working Capital is equal to:
Current Assets minus Current Liabilities
300
Very liquid short-term investments, such as <90-day Treasury Bills are referred to as?
Cash Equivalents
300
To determine the future value factor for an annuity due for period n when given tables are only for an ordinary annuity.
Obtain the FVA factor for n + 1 and deduct 1
300

King Spicy declared and paid cash dividends on December 15, 2017, but did not record them.

Assets - O

Liabilities - N

Net Income - N

300
A cost that cannot be changed or avoided by any present of future decision. 
Sunk Cost
300
The balance in Retained Earnings at the end of the year is determined by...


Retained Earnings at the beginning of the year 

+ Net Income

- Dividends

400
The FASB issues accounting standards in the form of...
Accounting Standards Updates
400
Froilan's Custom Tuxedo Shop maintains its records on the cash basis. During this past year Froilan collected $42,000 in tailoring fees and paid $14,000 in expenses. Depreciation expense totaled $2,000. Accounts receivable increased $1,500, supplies increased $4,000, and accrued liabilities increased $2,500. 

Froilan's accrual basis Net Income was:

$29,000

Collections                                              $42,000

Payments of expenses                             (14,000)

Add: Increase in assets (A/R)                       1,500

        Increase in assets (supplies)                 4,000

Deduct: Decrease in assets (accum. depr.)   (2,000)

            Increase in liabilities (accrued)        (2,500)

    Accrual basis Net Income:                     $29,000

400
Anthony sold merchandise to Shervin on account with terms FOB destination. As of December 31, the merchandise had not yet been received by Shervin. Anthony recorded the sale and did not count the merchandise in ending inventory (periodic system).
Assets - O

Liabilities - N

Net Income - O

400
Net Operating Income divided by average Operating Assets.
Return on Investment
400
A company may compare the amount of receivables in the current year to the amount of receivables in the previous year to estimate a trend in the company's ability to collect cash from customers. This type of analysis is known as...
Horizontal Analysis
500
Recognizing expected losses immediately, but deferring expected gains, is an example of:

a. Materiality

b. Conservatism

c. Cost-effectiveness

d. Timeliness

b. Conservatism
500
Argin and Spicy, a partnership, had revenues of $360,000 in its first year of operations. The partnership has not collected on $35,000 of its sales and still owes $40,000 on $150,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $25,000 in salaries. The partners invested $40,000 in the business and $25,000 was borrowed on a five-year note. Argin and Spicy paid $3,000 in interest that was the amount owed for the year and paid $8,000 for a two-year insurance policy on the first day of business.

Compute Net Income for the first year for Argin and Spicy. 

Net Income $178,000


Revenues                        $360,000

Expenses:

   COGS     $150,000

   Salaries     25,000

   Interest       3,000

   Insurance     4,000       (182,000)

Net Income                      $178,000

500

Argin purchased supplies during the year for $1,000 cash, and recorded it as a debit to Supplies Expense and a credit to Cash. Only $200 of supplies remain at the end of the year, but no further entries have been recorded.

Assets - U

Liabilities - N


Net Income - U

500
What is the formula for Cost of Goods Manufactured?
Beginning WIP Inventory

+Direct Materials

+Direct Labor

+Overhead

=Total Manufacturing Cost

- Ending WIP Inventory

= Cost of Goods Manufactured

500

When Princess Vania sells land for cash and recognizes a $75,000 gain:

a. the acid-test ratio decreases


b. current ratio decreases


c. debt to equity ratio decreases

Debt to Equity ratio decreases

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