Accounting 212 Exam 3 questions
with complete solutions
sugar time lemonade wants to invest some of its excess funds in another company. It purchases
200 shares of common stock in another company for $15 per share. The par value of the stock is
$7 per share. What is one financial statement implications of this transaction
A) Common stock will increase by $3,000
B) Investments will increase by $3,000
C) Common stock will decrease by $3,000
D) Treasury stock will increase by $3,000 - correct answer ✔✔B
An enterprise combines ____ with ___ in order to provide customers with goods and services as
part of the value chain model
A) cash, employee labor
B) Merchandise, cash
C) Cash, property
D) supplies, employee labor - correct answer ✔✔D
Stars magazine sells a one-year magazine subscription to a customer on July 1st for $60. Stars
magazine will deliver the magazine on the 10th day of each month. How should the transaction
price be allocated?
A) $60 of subscription revenue should be recorded when the one-year subscription ends
B) $5 of subscription revenue should be recorded each month when the magazine is delivered
C) $60 of subscription revenue should be recorded when the one-year subscription starts.
D)$5 of deferred revenue should be recorded each month when the magazine is delivered. -
correct answer ✔✔B
, O July 1st,, 2024, Sally's Baking company lends $10,000 to Bob's lawn care using a promissory
note. The note bears 6% interest (compounded annually) and must be repaid on December
31st, 2024. How does this impact Sally's Baking Company's financial statements on July 1st?
A) Total assets will increase
B) total assets will decrease
C) total assets will be unchanged - correct answer ✔✔C
Harold's Heating and Cooling currently has $100,000 in outstanding accounts receivable. Of this
amount, 70% are current (less than 30 days old), and the remaining 30% are past due. Harold
estimates that 5% of the current balance will be uncollectable, and 7% of the past due balances
will be uncollectable. How much should Harold record as Bad Debt Expenses in the current
period?
A) $2,100
B) $3,500
C) $4,900
D) $5,600 - correct answer ✔✔D
Which of these accounts will appear on an enterprise's income statement?
A) account receivable
B) Allowance for Uncollectable Accounts
C) Bad Debt Expense
D) Allowance for Bad Debts - correct answer ✔✔C
Mary's annual salary is $78,000. Her employer withheld $9,500 for federal income taxes from
her paychecks during the year, plus the employee's half of social security and Medicare taxes.
How much did Mary receive in her paychecks during the year?
A)$68,000
B) $63,000
with complete solutions
sugar time lemonade wants to invest some of its excess funds in another company. It purchases
200 shares of common stock in another company for $15 per share. The par value of the stock is
$7 per share. What is one financial statement implications of this transaction
A) Common stock will increase by $3,000
B) Investments will increase by $3,000
C) Common stock will decrease by $3,000
D) Treasury stock will increase by $3,000 - correct answer ✔✔B
An enterprise combines ____ with ___ in order to provide customers with goods and services as
part of the value chain model
A) cash, employee labor
B) Merchandise, cash
C) Cash, property
D) supplies, employee labor - correct answer ✔✔D
Stars magazine sells a one-year magazine subscription to a customer on July 1st for $60. Stars
magazine will deliver the magazine on the 10th day of each month. How should the transaction
price be allocated?
A) $60 of subscription revenue should be recorded when the one-year subscription ends
B) $5 of subscription revenue should be recorded each month when the magazine is delivered
C) $60 of subscription revenue should be recorded when the one-year subscription starts.
D)$5 of deferred revenue should be recorded each month when the magazine is delivered. -
correct answer ✔✔B
, O July 1st,, 2024, Sally's Baking company lends $10,000 to Bob's lawn care using a promissory
note. The note bears 6% interest (compounded annually) and must be repaid on December
31st, 2024. How does this impact Sally's Baking Company's financial statements on July 1st?
A) Total assets will increase
B) total assets will decrease
C) total assets will be unchanged - correct answer ✔✔C
Harold's Heating and Cooling currently has $100,000 in outstanding accounts receivable. Of this
amount, 70% are current (less than 30 days old), and the remaining 30% are past due. Harold
estimates that 5% of the current balance will be uncollectable, and 7% of the past due balances
will be uncollectable. How much should Harold record as Bad Debt Expenses in the current
period?
A) $2,100
B) $3,500
C) $4,900
D) $5,600 - correct answer ✔✔D
Which of these accounts will appear on an enterprise's income statement?
A) account receivable
B) Allowance for Uncollectable Accounts
C) Bad Debt Expense
D) Allowance for Bad Debts - correct answer ✔✔C
Mary's annual salary is $78,000. Her employer withheld $9,500 for federal income taxes from
her paychecks during the year, plus the employee's half of social security and Medicare taxes.
How much did Mary receive in her paychecks during the year?
A)$68,000
B) $63,000
