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Q1. Refer to Charhofe’s December 31, 2019 Income Statement shown below.
Charhofe
began 2019 with a taxes payable account balance of $7 million. If it ended 2019 with a
taxes payable account balance of $10 million, how much did it pay in taxes in 2019?
 $18.6 million
Q2. Manning Inc. owes $200,000 to one of its creditors. Since it has limited resources,
Manning agrees to issue $100,000 worth of common stock and to pay $100,000 in cash
to make payment. How would this repayment be recorded in Manning?s financial
statements?
debit accounts payable $200,000; credit cash $100,000; credit common stock $100,000
Q3. The realized or realizable criterion is satisfied if the seller has received payment or
reasonably expects to be paid.
True
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Q4. Refer to Charhofe’s December 31, 2019 Income Statement shown below. For 2019,
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what was Charhofe’s return on sales (also referred to as their net profit margin)?
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 0.26500000000000001
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Q5. Which of the following is not a requirement for an asset to be recorded on the
balance sheet?

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o The asset was acquired at fair market value.

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Q6. Refer to Alpha’s cash T-Account for 2019 shown below. For 2019, what was Alpha’s
cash flow from financing?
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7.
Choose the option to correctly complete the sentence. Ruthie?s Radios manufactured 1,000
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radios in February of 2019 at a cost of $200 each and 400 radios in June of 2019 at a cost of
$150 each. Ruthie?s Radios sold 300 radios during 2019. Ruthie?s Radios uses the LIFO
method of accounting for inventory and cost of goods sold (COGS). If Ruthie?s Radios had
instead used the FIFO method of accounting, its inventory would be _____________ and its
net income would be _______________ than what Ruthie?s Radios reported in 2019 using
LIFO.
8. In determining when revenue is recognized, what two conditions must be satisfied
according to the realization concept?
 Revenue must be earned and realized.

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9.Refer to Alpha’s cash T-Account for 2019 shown below. Alpha ended 2019 with a
balance of $20 million in their salaries payable account. If their salary expense in 2019
was $90 million, what was their ending balance for salaries payable on December 31,
2018?
10. On December 31, 2018, Blais Industries had long-term debt totaling $120,000 on
their balance sheet. During 2019, they paid $10,000 in interest on that debt and $50,000
in principal. During the year they also issued new long-term debt totaling $20,000. What
is the balance in their long-term debt account at the end of 2019?
90000
11. Quinlan Electric purchases machinery for $220,000 that is to be depreciated at

straight-line depreciation for 5 years. The estimated residual value of the machine after 5
years is estimated at $20,000. What is the book value of the asset after 2 years?
140000
12. On January 1, 2019, Flip-Flop Inc. purchased a trademark from Cool Shoe Inc. for
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$200,000. They paid for the purchase with $100,000 in cash and $100,000 in Flip-Flop
common stock. How would the transaction be recorded by Flip-Flop?
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13. Choose the option to correctly complete the sentence. Amy Auto Parts has inventory
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that has been recorded on their balance sheet at $156,000. The fact that Amy?s
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inventory is not reflected at a value that would be realized if it were required to be sold
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immediately to pay bills is referred as the ___________.
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 liquidity concept
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14. Choose the best option to complete the following sentence. The conservatism
concept dictates that gain contingencies ____________.
15. Choose the option to correctly complete the sentence. Assume that Stephen?s
Suitcases manufactured 2,500 suitcases in January of 2019 at a cost of $50 each, and
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1,100 suitcases in July of 2019 at a cost of $60 each. Stephen?s Suitcases sold 3,000
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suitcases during 2019. Stephen?s Suitcases uses the FIFO method of accounting for
inventory and cost of goods sold (COGS). At the end of 2019, Stephen?s Suitcases
reports inventory of ________ and COGS of __________.
 $36,000; $155,000
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16. On October 1, Jordyn Solutions pays 3 months of rent in advance to its landlord.
Which of the following statements regarding this transaction and its impact on Jordyn?s
financial statements is true?
17. On January 1, 2019, Flip-Flop Inc. purchased a trademark from Cool Shoe Inc. for
$200,000. They paid for the purchase with $100,000 in cash and $100,000 in Flip-Flop
common stock. If Flip-Flop has long-term debt on their balance sheet, which of the
following describes the effect of the transaction on Flip-Flop Inc.?
18. Refer to Bellingham Incorporated’s December 31, 2019 Balance Sheet shown below.
Bellingham’s inventory balance on December 31, 2018 was $70,000. They purchased
$40,000 worth of inventory in 2019 and during the year there were no inventory related
write-downs or losses. What was the cost of goods sold in 2019?
19. Choose the option to correctly complete the following sentence. Deferred revenue is
future revenue that has already been __________, but has yet to be ___________.
 collected; earned

20. Refer to Charhofe’s December 31, 2019 Income Statement shown below. Charhofe
began 2019 with $70 million in retained earnings. In 2019, they paid out a special
dividend totaling $90 million. What is the retained earnings balance as of December 31,
2019?
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 $42.4 million
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21. Choose the option to correctly complete the following sentence. If the purchase price
is _________ the __________ value of the net assets acquired, the excess purchase price is
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recorded as _________ called Goodwill.

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 greater than; book; an asset

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Bellingham began 2019 with the following non-current asset balances: Plant and
Equipment (net) $360,000; Patents (net) $55,000. No long-term assets were purchased
or sold during the year. What is the depreciation and amortization expense for 2019?
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23. Sanford and Son sells athletic equipment. The following events, related to a special
customer order, occur as described below: ? September 1, 2019: Sanford receives the
special order for 300 football helmets at a selling price of $100 each, including delivery
at a future convenient time and location. The customer, with whom Sanford has had a
long-term, trouble-free relationship, pays $5,000 as a deposit, and agrees to pay the rest
on delivery. Sanford immediately orders $20,000 worth of helmets from its supplier and
pays a $5,000 deposit for them. ? September 20, 2019: Sanford pays a $15,000 balance
due to the supplier upon delivery of the helmets to its warehouse. ? October 1, 2019: The
customer calls for delivery of the helmets and pays the balance of $25,000 when they
arrive at the customer site. On September 1, 2019, which one of the following accounting
entries, related to the $30,000 special order, should be recorded in Sanford's financial
accounting system?
24.
Which of the following is generally not considered a current liability?
 current portion of long-term debt

25. On December 31, 2018, William Jackson Industries has current assets of $100,000, non-
current assets of $400,000 and total liabilities of $200,000. What is the amount of owner?s
equity as of December 31, 2018?
300000
26. Stephen’s Suitcases acquired Tara’s Totes on 1/1/2018. Stephen’s Suitcases paid
$400,000 for Tara’s Totes. Tara’s Totes had the following balance sheet items on
1/1/2018. What is the amount of Goodwill that Stephen’s Suitcases should record at the
time it purchases Tara’s Totes?
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 $110,000
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
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27. Stephen?s Suitcases has the following ratios: Net Income/Sales = 0.100 Sales/Total
Assets = 1.100 Return on Equity = 0.231 What is Stephen?s Suitcases Total
Assets/Owners? Equity ratio?
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Bellingham began 2019 with $240,000 in owner’s equity. During the year they issued
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$30,000 in new common stock and paid $10,000 in dividends. If their net income for
2019 was $40,000, what was their retained earnings balance on December 31, 2018?
29. Choose the option to correctly complete the following sentence. If the entity is
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uncertain whether to recognize an expense or about the amount of an expense, the

_________ concept encourages it to pro-actively estimate the cost and record the expense.
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CONSERVATISM
What is Bellingham’s total debt to equity ratio on December 31, 2019?
1.17
31. Choose the option to correctly complete the sentence. Ruthie?s Radios had a
Retained Earnings balance of $50,000 at the end of 2018. The firm paid a dividend of
$10,000 during 2019. The balance in Retained Earnings at the end of 2019 was $35,000.
Assuming no other changes to the Retained Earnings account during 2019, Ruthie?s
Radios had _________ during 2019.
 net loss of $5,000

32. Woodridge Companies purchased a new machine that was on sale for $100,000. The
CEO?s brother installed the machine and charged Woodridge $10,000. If the regular price
of the machine is $110,000 and the cost to install it should have been $20,000, how
should Woodridge record the value of the asset on their balance sheet?
110000
33. Which options correctly complete the sentence? In most cases, revenue is earned
when a sale has taken place. This is when: I. the customer has agreed to buy the goods
or services. II. the goods or services have been delivered. III. the seller has performed
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substantially all of its obligations to the buyer.
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o I, II, and III
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34. In March, Ruthie?s Radios learn that a sale of $75 made in February will never be
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paid by the customer. What is the journal entry that Ruthie?s Radios should record?
Debit allowance for bad debts for $75; credit account receivable for $75
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35. Refer to Alpha’s cash T-Account for 2019 shown below. For 2019, what was Alpha’s
cash flow from investing?
36. Refer to Charhofe’s December 31, 2019 Income Statement shown below. If Charhofe
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was able to increase sales at a greater rate than cost of goods sold, how would gross
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margin percentage be impacted?


o It cannot be determined with the information given.
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37. Refer to Charhofe’s December 31, 2019 Income Statement shown below. Charhofe
ended 2019 with a balance in their interest payable account of $14 million. During 2019
it paid $9 million in interest to its creditors. What was the balance of the interest payable
account at the end of 2018?
 $11 million

38. Choose the option to correctly complete the sentence. Ruthie?s Radios sells a $100
gift certificate to a customer on December 2. On December 2, Ruthie?s Radios will debit
_________ and credit __________.
39. Refer to Alpha’s cash T-Account for 2019 shown below. Based on the cash T-account
for 2019, which of the following statements is true?
The company sold land for $150 million.
40. Which of the following describes the fundamental accounting equation?

41. A snapshot at a point in time of an entity?s assets, liabilities and owner?s equity is
referred to as what?
 balance sheet

42. Assume that Melissa?s Magic Markers purchases a new piece of factory equipment for
$150,000. The salvage value is $30,000 and the useful life is 6 years. What is the annual
depreciation expense under the straight-line method?
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43. The next question refers to Charhofe’s December 31, 2019 Income Statement. What
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is the 2019 gross margin percentage for Charhofe Industries?
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44. Presented below is the 2019 income statement for Melissa’s Magic Markers. During
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the year, Melissa’s Magic Markers charged $30 in depreciation and $10 in amortization.
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What is Melissa’s Magic Markers’ 2019 EBITDA to total interest coverage ratio?
 34.3x
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45. Choose the option to correctly complete the following sentence. The __________
concept says that every accounting transaction has two sides that must be recorded.
Dual aspect (answer)
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46. Choose the option to correctly complete the following sentence. Schmidt Industries
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received cash from a customer for a product to be delivered next month. According to
the realization concept this revenue has been
 realized but not earned.
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
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47. Assume that Zack?s Zippers buys a warehouse on January 1, 2005 for $1,000,000.
The annual depreciation expense for this building is $50,000 and the journal entry to
record the depreciation expense is made once a year on December 31. On December 31,
2007, after making the 2007 journal entry for depreciation expense, what is the balance
in the accumulated depreciation account?

o Contra asset of $150,000
48. Xylem Technologies purchased a trademark from Phloem Semiconductor for $5
million. How should this new purchase be classified on the balance sheet for Xylem?
 A non-current intangible asset

49. Choose the option to correctly complete the sentence. Compared to the straight-line
depreciation method, an accelerated method of depreciation (such as the double-
declining balance method) will result in a _______________ depreciation expense in the first
year and a ______________ net asset balance for the asset at the end of the first year.
 higher; lower

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50. Which of the following statements about Goodwill are true? I. It is amortized over its
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useful life. II. It will be $0 for a firm that has never purchased another firm. III. It can
generally be attributed directly to a patent or trademark.
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 I only
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
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Q1. Refer to Charhofe’s December 31, 2019 Income Statement shown below.

o The asset was acquired at fair market value.

11. Quinlan Electric purchases machinery for $220,000 that is to be depreciated at

recorded as _________ called Goodwill.

 greater than; book; an asset

uncertain whether to recognize an expense or about the amount of an expense, the

margin percentage be impacted?

40. Which of the following describes the fundamental accounting equation?

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