Debit And Credit – Quiz Packets 1 – Accounting

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Debit And Credit – Accounting Quiz Packets – Accounting & Finance

The key terms in these Accounting chapters include Debit, Credit, Petty Cash, Credit Sale, Relevant Costs, Cowboy Ice Cream, Quiz Packets, And Accounting & Finance.


Jasper makes a $83,000, 90-day, 7% cash loan to Clayborn Co. Jasper’s entry to record the transaction should be:

Debit Notes Receivable for $83,000; credit Cash $83,000. – Correct

Debit Accounts Receivable $83,000; credit Notes Receivable $83,000.

Debit Cash $83,000; credit Notes Receivable for $83,000.

Debit Notes Payable $83,000; credit Accounts Payable $83,000.

Debit Notes Receivable $83,000; credit Sales $83,000.


Which of the following are relevant in Cowboy Ice Cream’s decision of whether to eliminate its Retail Division? (Select all that apply)

Variable operating expenses

Sales

General fixed operating expenses

Cost of Goods Sold


A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
 

    
Accounts receivable$365,000debit
Allowance for uncollectible accounts 600debit
Net Sales 810,000credit


All sales are made on credit. Based on past experience, the company estimates that 0.4% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? 

$3,240 – Correct

$3,840

$860

$2,640

$2,060

Explanation

$810,000 × 0.004 = $3,240


Which of the following describe relevant costs? (Select all that apply)

Future oriented

Differ among alternatives

Only quantitative (i.e., there are no relevant costs that are qualitative)

Sunk costs


Crowder Transport Company has four different divisions.  A recent income statement for the West Division is shown below:

Revenue$300,000
Salaries for drivers(210,000)
Fuel expenses(30,000)
Insurance(42,000)
Division-level facility costs(24,000)
Company-wide facility costs(78,000)
Net Loss($84,000)

Which of the following items are relevant for the decision of whether the West Division should be eliminated?

Salaries for drivers

Fuel expenses

Insurance

Division-level facility costs

Company-wide facility costs

Revenue


Assume that the custodian of a $450 petty cash fund has $57.10 in coins and currency plus $388.00 in receipts at the end of the month. The entry to replenish the petty cash fund will include:

A credit to Cash Over and Short for $4.90.

A credit to Cash for $392.90. – Correct

A debit to Cash for $383.10.

A Cash debit for $392.90.

A debit to Petty Cash for $388.00.

Explanation

$450 – $57.10 – $388.00 = $4.90 cash shortage
$450 – $57.10 = $392.90 cash reimbursement needed


Crowder Transport Company has four different divisions.  A recent income statement for the West Division is shown below:

Revenue$300,000
Salaries for drivers(210,000)
Fuel expenses(30,000)
Insurance(42,000)
Division-level facility costs(24,000)
Company-wide facility costs(78,000)
Net Loss($84,000)

By how much will Crowder Transport Company’s net income increase or decrease if the West Division is eliminated?

(Enter an increase as a positive number or a decrease as a negative number, e.g., if profitability will decrease by $5,000, then enter “-5000”)

6,000


Favors Publishing has the following budgeted and actual amounts

BudgetedActual
Sales price / book$90.00$87.00
Book sales30,000 books32,000 books

Calculate Favor’s Publishing’s total sales variance.  Enter a favorable variance as positive and a negative variance as negative.

84,000


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