accounting final notes

Which of the following is not a result of the Sarbanes-Oxley Act?

Companies must file financial statements with the Internal Revenue Service.

Having different individuals receive cash, record cas recipts, and hold the cas is an example of segregation of duties

An internal auditor reconciling the bank statement monthly is an example of independent internal verification.

The use of pre-numbered checks in disbursing cash is an application of the principle of documentation procedures.

Printing check amounts by machine in indelible ink is an example of physical controls.

Making payments from a petty cash fund requires no accounting entry to record a payment when it is made from petty cash.

A company reports a debit balance in Cash Over and Short as a(n) miscellaneous expense.

If the month-end bank statement shows a balance of 54000 outstanding checks are 15999, a deposit of 6000 was in transit at month end, and a check for 900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is $54,000 - $15,000 + $6,000 + $900 = $45,900

Counting of daily cash receipts by a supervisor is an application of which internal control principle? Independent Internal verification

In preparing its bank reconciliation for the month of April 2015, Delano, Inc. has available the following information.

Balance per bank statement, 4/30/15 $78,600
NSF check returned with 4/30/15 bank statement 940
Deposits in transit, 4/30/15 10,000
Outstanding checks, 4/30/15 10,400
Bank service charges for April 60
What should be the adjusted cash balance at April 30, 2015? $78,600 + $10,000 - $10,400 = $78,200.

A 60-day note receivable dated July 13 has a maturity date of september 11

A 90-day note dated May 14 has a maturity date of August 12

During 2015, sales on account were 145,000 and collections on account were $100,000. Also during 2015, the company wrote off 4,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at 40,000 - ($35,000 - $4,000) = $9,000

Bad debt expense for 2015 is $9000

A $1,000 face value bond with a quoted price of 98 is selling for 1,000 × .98 = $980.

Ed’s Bookstore has collected $750 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Ed's Bookstore make to show the April remittance?

Sales Taxes Payable 750    Cash 750

Layton Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to 29,400. If the sales tax rate is 5%, what amount must be remitted to the state for October's sales taxes? 1,400

Valerie's Salon has total receipts for the month of 20,670 including sales taxes. If the sales tax rate is 6%, what are Valerie's sales for the month? 1950

A retail store credited the Sales Revenue account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the Sales Revenue account amounted to $294,000, what is the amount of the sales taxes owed to the taxing agency? $294,000 - ($294,000/1.05) = $14,000.

Gentry Company’s land account decreased $120,000 because of a cash sale for $120,000, its equipment account increased $40,000 as a result of a cash purchase, and its bonds payable account increased $130,000 from issuance of bonds for cash at face value. The net cash provided by investing activities is 80,000

Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $240,000. Exclusive of the effect of other adjustments, the cash flows from operating activities under the indirect method to be reported on the statement of cash flows is 250000

In Angel Company, the Land account decreased $90,000 as a result of a cash sale for $100,000 and recognized a gain on the sale of $10,000. The Equipment account increased $20,000 as a result of a cash purchase. Angel Company also purchased a truck for $25,000 by issuing a five-year note. Bonds payable increased from an issuance of bonds for cash for $50,000. The net cash provided by investing activities is 80000

DV’s Pest Control Products has the following information available: net income, $15,000; cash provided by operating activities, $21,000; cash sales, $65,000; capital expenditures, $11,000; and dividends paid, $3,000. What is DV’s free cash flow? 700

study notes

• a sound fnancial economy depends on financial accounting 
• 
  

Final Topics

• accumulated appreciation means 
• when you have a gain and have a loss 
• research and development 
• the cost of
• if someone sues you for the patent you must spend legal fees 
• if you spend some legal fees and lose what happens and if you win what happens 
• you need to be able to calculate the cost of land 
• what factors do you need to calculate depreciation 
• accumulated depreciation 
• balance method depreciation 
• how do you calculate the gain or loss of destruction of equipment 
• know what current liability means 
• current liabilities are paid in 1 year or less 
• what is the relationship between current liability and long term liability 
• accrued liability 
• issue a note 
• if you issue a note what do you have to do and how do you adjust that 
• how do understand payment and recording date 
• when you declare a dividend what is going to happen 
• your liability will go up and your stockholder equity will go down 
• accumulative and noncumulative preferred stock 
• calculation of dividend 
• for preffered and common stock what do they get 
• what is stock split 
• if you have a gain or loss how do you close them 
• cash flow 
• 35 questions 
• 
  

• land imporvements 
• structural additions made to the land. cos includes all expenditures necessary to make the improvements ready for their intended use
• examples: driveways, parking lots,fences 
• equiptment 
• include all costs incurred in acquiring the equptment and preparing it for use 
• costs typically include: 
• cash purchase price 
• sales taxes 
• determining the cost of plant assets 
• lenard company purchases a delivery truck at a cash
• expenditures during useful life 
• ordinary repairs are expenditures to maintain the operating efficency and productive life of the unit 
• debit to maintanace and repair expense 
• reffered to as revenue expenditures 
• additions and improvements are costs incurred to increase the operating efficency, productive capacity, or useful life of a plant asset 
• cost: all expenditures 
• depreciation methods 
• managment selects the method it believes best measures an asset's contribution to revenue over its useful lif 
• examples include:  
• straight - line method 
• units-of-activity method 
• declining-balance method 
• depreciation methods 
• managment selects the method it believes 
• barbs florists purchased a small delivery tryck 
• strught line method 
• expense is same amount for each year 
• depreciation cost = cost less salvage value 
• think of salvage value in every type of depreciation 
• declining-balance method 
• accelerated method 
• revising periodic depreciation 
• Arcadia HS, purchased equiptment which was estimated to have a useful lif of 10 years with a slavage value of 10,000 at the end of that time. Depreciation has been recorded for 7 years 
• companies dispose of plant assets 
• hobart enterprises retires its computer printers, which cost 32,000. The accumulated depreciation on these printers is 32,000. 
• sinset company discatds delivery equiptment that cost 18,000 and has accumulated depreciation of 14000. The journal entry is ? 
• sale of plant asset 
• on july 1,2017. wright company sells office furniture for 16,000 cash. The office furniture originall cost 60,00. As of january 7. it had accumulated depreciation of 41,000. depreciation for the first six months 
• lane coal company invests $5 million in a mine 
• intangiable assets 
• patents 
• copyrights 
• goodwill 
• trademarks 
• franchise 
• 
  

Introduction to Financial Statements

3 organizational forms

• sole proprietorship, partnership, corporation 
• sole proprietorship - a business owned by one person 
• partnership - a business owned by 2 or more people 
• corporation- A business organized as a separate legal entity owned by stockholders

Shares of stock are easy to sell ( transfer ownership ) 

successful companies start as sole proprietorship and eventually incorporate 

sole proprietorship gets more favorable tax treatment than a corporation but they are personally liable

the hybrid business forms combine the tax advantages of partnerships with the limited liability of corporations