Adjusting/
closing entries
closing entries
Receivables/
Others
Others
Inventory
PPE
Income statements
Cash flow/RE statements
Transactions
Random
100
An expense paid, but not incurred.
Prepaid expense.
100
What is the normal journal entry for recording bad debt expense under the allowance method?
Debit Bad Debt Expense, credit Allowance for Doubtful Accounts.
100
Goods that are shipped, but title remains with the consignor
consigned inventory/ Goods on consignment
100
Abida Company purchased equipment for $40,000. Sales tax on the purchase was $2,400. Other costs incurred were freight charges of $600, repairs of $350 for damage during installation, and installation costs of $675. What is recorded as the cost of the equipment?
$43,675
$40,000 + $2,400 + $600 + $675 = $43,675.
100
Is equal to net sales minus cost of goods sold
Gross profit
100
In a statement of cash flows, cash receipts from sales of PPE should be classified as cash ....... from .......activities.
Inflows/ investing
100
Which of the inventory methods should be used with the Lower-of-cost-or-net realizable value
FIFO
Specific identification
Weighted average
100
This country gifted the Statue of Liberty to the United States
France
200
Haron Corporation received cash of $36,000 on September 1, 2025 for one year’s rent in advance and recorded the transaction with a credit to Unearned Rent Revenue. The December 31, 2025 adjusting entry is
Debit Unearned Rent Revenue and credit Rent Revenue, $12,000.
200
What is the normal journal entry when writing-off an account as uncollectible under the allowance method?
Debit Allowance for Doubtful Accounts, credit Accounts Receivable.
200
Selling price less costs to complete, sell, and transport:
Net realizable value
200
Name 2 Contra-Asset accounts we have studied this semester.
1) Allowance for doubtful accounts
2) Accumulated Depreciation
200
How we calculate Net sales?
Sales-sales returns and allowances-sales discounts
200
The purchase of treasury stock is reported in the…...... section of the cash flow statement
Financing activities
200
Jasim Corporation purchased a machine for $65,000 on July 1, 2025. The company intends to depreciate it over 8 years using the double-declining balance method. The salvage value is $5,000. Depreciation expense for 2025 is
$8,125.
($65,000 – 0) × (1/8 x 2) × 6/12 = $8,125.
200
A mythical creature with the head of a human and the body of a lion and exist in Egypt
Sphinx
300
During the closing process, we close four temporary accounts. Which accounts are closed?
Revenues / Expenses /Income Summary /Dividends
300
The amount of interest cost capitalized during the period equals
The lower of the avoidable or the actual interest cost incurred.
300
In times of rising prices, what inventory method would companies use to minimize their income taxes?
LIFO
300
Compares the carrying value of the asset to its undiscounted expected future net cash flows.
The recoverability test
300
Net income minus preferred dividends divided by the weighted average of shares outstanding.
Earnings per share
300
Issuance of stock to acquire land is reported in which section of the cash flow statement
This is a non-cash transaction and reported at the bottom of the cash flow statement.
300
Equipment costing $16,000, with accumulated depreciation of $12,000 on Dec. 31 of previous year, was sold on March 31 for $7,000 cash. the company uses straight-line depreciation at $4,000 per year. What is the gain/loss on the sale, if any?
$7,000 − $3,000 = $4,000 gain
300
What is the smallest country in the world?
The Vatican
400
XYZ has a $6,000 loan from a bank at 5% annual interest on Oct. 1. The interest and principal are repayable in three months. What is the journal entry on Jan 1. Dec.31 is the end of the peiod.
Interest payable 75
Bank loan payable 6000
cash 6,075
400
The present value of a note is determined by adding
the present value of the face amount and the present value of the annuity of interest receipts.
400
Is always the middle value of replacement cost, net realizable value, and net realizable value less a normal profit margin
The designated market value
400
What are the four depreciation methods that we covered in this course?
Straight-line
Units-of-Production
Sum-of-the-years'-digits
Declining balance
400
Contra revenue accounts
1) Sales Returns and Allowances
2) sales discounts
400
Khaled Corporation reports:
Cash provided by operating activities $320,000
Cash used by investing activities 110,000
Cash provided by financing activities 140,000
Beginning cash balance 90,000
What is Lohmeyer’s ending cash balance?
$440,000
$90,000 + $320,000 – $110,000 + $140,000 = $440,000.
400
Jalal Corporation owns machinery with a book value of $760,000. At the end of the current year, it is estimated that the machinery will generate future cash flows of $700,000. If the machinery has a fair value of $560,000 at that time, King should recognize a loss on impairment of
$200,000.
$700,000 < $760,000; $560,000 – $760,000 = ($200,000).
400
The tallest building in the world
Burj Khalifa (Dubai)
828 meters
500
Muhammad Company began the year with a balance in the Supplies account of $3,200. During the year, Muchachi purchased supplies for $25,800. An inventory of the Supplies at year-end showed supplies on hand of $4,100. Supplies Expense reported on Muchachi’s income statement for the year is
$24,900
$25,800 + $3,200 - $4,100 = $24,900.
500
On October 31, a fire destroyed PH Inc.'s entire retail inventory. The inventory on hand as of January 1 totaled $2,720,000. From January 1 through the time of the fire, the company had purchases of $660,000 and sales of $1,440,000. Assuming that the rate of gross profit to selling price is 40%, what is the approximate value of the inventory that was destroyed?
$2,516,000
($2,720,000 + $660,000) – [$1,440,000 × (1 – .40)] = $2,516,000.
500
Using the periodic inventory system, what is the ending inventory under FIFO?
Beginning Inventory 100 units @ $2.00
Purchase – May 200 units @ $1.50
Purchases – June 100 units @ $3.00
Ending inventory is 150 units.
$ 375
500
These methods allocate larger shares of the cost of a plant asset to expense during the years in which the greatest use is made of the asset.
Units of production
500
The income statement category for the disposal of a business component that has a strategic shift (reported net of tax).
Discontinued operations
500
Majed Corporation reports the following information for the current period:
Net income $530,000
Depreciation expense 140,000
Increase in inventory 60,000
Majed should report cash provided by operating activities of
$610,000.
$530,000 + $140,000 – $60,000 = $610,000.
500
Leen Company purchased factory equipment for $640,000 on January 1. The asset’s useful life in hours is estimated to be 175,000. The estimated salvage value is $45,000 and the estimated useful life is 8 years. The machine was used for 19,000 hours in the first year. If the activity method is used, what is the depreciation expense for the first year of the asset’s life?
$64,600
($640,000 - $45,000) / 175,000 = $3.40 per hour 19,000 hours x $3.40 = $64,600
500
Who is the author of Harry Potter?
J.K. Rowling
600
Ahmed Corporation is disposing of a piece of equipment on May 1, 2025. The equipment had an original cost of $400,000 when purchased on January 1, 2021. Accumulated depreciation as of 12/31/2026 was $160,000 assuming straight-line depreciation over a useful life of 10 years with no salvage value. Brayden received $250,000 on the sale of the equipment. What amount of the gain or loss will be recorded?
Gain on Sale= $23,333
Record depreciation through April 2025:
Depreciation Expense …………………… 13,333
Accumulated Depreciation……... 13,333
$400,000 ÷ 10 yrs. = $40,000 per year x 4/12 = $13,333
Record the sale of equipment on May 1, 2025
Cash…………………………… 250,000
Accumulated Depreciation 173,333*
Equipment……….. 400,000
Gain on Sale 23,333
Accumulated Depreciation = $160,000 + $13,333 = $173,333*
Gain = $250,000 - ($400,000 - $173,333) = $23,333**
600
Mehrdad took a physical inventory at the end of the year and determined that $780,000 of goods were on hand. In addition, Bell determined that $60,000 of goods were in transit. The goods were shipped f.o.b. shipping point and were received two days after the inventory count. Bell also had $90,000 of goods out on consignment. What amount should Bell report as inventory at the end of the year?
$930,000
Solution: $780,000 + $60,000 + $90,000 = $930,000.
600
Goods in transit shipped f.o.b. shipping point should be included in the buyer's or seller's inventory?
the buyer.
600
A truck is purchased for $35,000. It has a five-year life and $5,000 residual value. Using the straight-line method, what is the truck’s carrying value after three years?
$ 17,000
600
In 2025, Yllza Corporation earned sales revenues of $1,330,000 with related cost of goods sold of $720,000. The company incurred administrative expenses of $310,000 and had other revenues and gains of $22,000. Income tax expense was $31,000. Based on this information, the company will report operating income for the year of
$300,000.
$1,330,000 - $720,000 - $310,000 = .$300,000.
600
Noor Corporation reports the following information:
Correction of overstatement of depreciation expense in prior years, net of tax $ 645,000
Dividends declared 480,000
Net income 1,500,000
Retained earnings, 1/1/25, as reported 6,000,000
Leonard should report retained earnings, 1/1/25, as adjusted at
$6,645,000.
$6,000,000 + $645,000 = $6,645,000.
600
Shiza Corporation purchased a depreciable asset for $600,000 on January 1, 2023. The estimated salvage value is $60,000, and the estimated useful life is 9 years. The straight-line method is used for depreciation. In 2026, Morgan changed its estimates to a total useful life of 5 years with a salvage value of $90,000. What is 2026 depreciation expense?
$165,000
$600,000 – [($600,000 – $60,000) × 3/9] = $420,000; ($420,000 – $90,000) ÷ (5 – 3) = $165,000.
600
How many colors are in the Palestinian flag
Four colors: Black/White/Green/Red
