ACC 231 EXAM 2 2026 STUDY GUIDE
COMPLETE ACCOUNTING PRINCIPLES AND
PRACTICE QUESTIONS
◉ On December 1, Macy Company sold merchandise with a selling
price of $9000 on account to Mrs. Jorgenson, with terms 4/10, n/30.
On December 3, Mrs. Jorgenson returned merchandise with a selling
price of $700. Mrs. Jorgenson paid the amount due on December 9.
What journal entry did Macy Company prepare on December 9
assuming the gross method is used. Answer: Debit Cash for $7968,
debit Sales Discounts for $332, and credit Accounts Receivable for
$8300
[$9000 - $700 (returned amount)]
[$8300 * 0.96 (4/10)]
[$7968]
◉ The following account balances were extracted from the
accounting records of Thomas Corporation at the end of the year:
Accounts Receivable: $1,105,000
Allowance for Uncollectible Accounts (Credit): $37,000
Uncollectible-Account Expense: $60,000
,What is the net realizable value of the accounts receivable?. Answer:
$1,068,000
[Accounts Receivable - Allowance for Uncollectible Accounts]
◉ If the interest rate on a note is 12.5% and the principal was
$57,000, what is the maturity value of the note, if the term of the
note is 5 months?. Answer: $59,969
[5 months = 5/12]
[5/12 * 12.5 = 5.208%]
[$57,000 * 5.208%]
[59,969]
◉ If both current ratio and quick ratio have improved, has a
company's liquidity improved?. Answer: Yes
◉ A company has $28,000 in cash and cash equivalents, $88,000 in
short-term investments, $122,000 in net current receivables,
$64,000 in inventory, $14,000 of prepaid insurance and $11,000 of
supplies. The total current liabilities of the firm are $304,000. The
quick ratio of the company is:. Answer: 0.78
, [28,000 + 88,000 + 122,000 = 238,000]
[238,000/304,000]
[0.78]
◉ A company has sales revenue of $131,000, cost of goods sold of
$63,000, operating expenses of $34,000, and other expenses of
$2,000. The company's gross profit is:. Answer: $68,000
[131,000 - 63,000]
◉ Gross Profit and Gross Profit Margin Formula. Answer: Gross
Profit = Revenue - COGS
Gross Profit Margin = (Revenue - COGS)/Revenue
◉ Quick Ratio Formula. Answer: Quick Assets/Current Liabilities
◉ A company has sales revenue of $133,000, cost of goods sold of
$63,000, operating expenses of $37,000, and other expenses of
$4,000. The company's operating income is:. Answer: $33,000
[133,000 - 63,000 - 37,000}
COMPLETE ACCOUNTING PRINCIPLES AND
PRACTICE QUESTIONS
◉ On December 1, Macy Company sold merchandise with a selling
price of $9000 on account to Mrs. Jorgenson, with terms 4/10, n/30.
On December 3, Mrs. Jorgenson returned merchandise with a selling
price of $700. Mrs. Jorgenson paid the amount due on December 9.
What journal entry did Macy Company prepare on December 9
assuming the gross method is used. Answer: Debit Cash for $7968,
debit Sales Discounts for $332, and credit Accounts Receivable for
$8300
[$9000 - $700 (returned amount)]
[$8300 * 0.96 (4/10)]
[$7968]
◉ The following account balances were extracted from the
accounting records of Thomas Corporation at the end of the year:
Accounts Receivable: $1,105,000
Allowance for Uncollectible Accounts (Credit): $37,000
Uncollectible-Account Expense: $60,000
,What is the net realizable value of the accounts receivable?. Answer:
$1,068,000
[Accounts Receivable - Allowance for Uncollectible Accounts]
◉ If the interest rate on a note is 12.5% and the principal was
$57,000, what is the maturity value of the note, if the term of the
note is 5 months?. Answer: $59,969
[5 months = 5/12]
[5/12 * 12.5 = 5.208%]
[$57,000 * 5.208%]
[59,969]
◉ If both current ratio and quick ratio have improved, has a
company's liquidity improved?. Answer: Yes
◉ A company has $28,000 in cash and cash equivalents, $88,000 in
short-term investments, $122,000 in net current receivables,
$64,000 in inventory, $14,000 of prepaid insurance and $11,000 of
supplies. The total current liabilities of the firm are $304,000. The
quick ratio of the company is:. Answer: 0.78
, [28,000 + 88,000 + 122,000 = 238,000]
[238,000/304,000]
[0.78]
◉ A company has sales revenue of $131,000, cost of goods sold of
$63,000, operating expenses of $34,000, and other expenses of
$2,000. The company's gross profit is:. Answer: $68,000
[131,000 - 63,000]
◉ Gross Profit and Gross Profit Margin Formula. Answer: Gross
Profit = Revenue - COGS
Gross Profit Margin = (Revenue - COGS)/Revenue
◉ Quick Ratio Formula. Answer: Quick Assets/Current Liabilities
◉ A company has sales revenue of $133,000, cost of goods sold of
$63,000, operating expenses of $37,000, and other expenses of
$4,000. The company's operating income is:. Answer: $33,000
[133,000 - 63,000 - 37,000}
