ACCT 2000 : ACCT Clicker Quiz Q's
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12. For the purpose of government-wide financial statements, thecost of cleaning up a government-owned landfill and closing thelandfill
A) Is not recognized until the costs are actually incurred
B) Is accrued and amortized over the expected useful life of thelandfill
C) Is accrued on a pro-rated basis each period based on how fullthe landfill is
D) Is accrued in full at the time the costs become estimable
E) Is treated as an encumbrance at the time it become estimable andas an expenditure when it is actually paid
13. Drye Township has received adonation of a rare painting worth $1,000,000. For Drye'sgovernment-wide financial statements, three criteria must be metbefore Drye can opt not to recognize the painting as an asset.Which of the following is not one of the three criteria?(1.) Thepainting is held for public exhibition, education, or research infurtherance of public service, rather than financial gain.(2.) Thepainting is scheduled to be sold immediately at auction.(3.) Thepainting is protected, kept unencumbered, cared for, andpreserved.
A) Item 1 is not one of the three criteria
B) Item 2 is not one of the three criteria
C) Item 3 is not one of the three criteria
D) All three items are required criteria
E) None of the three items are required criteria
14. Which of the following is nota criterion of a capital lease?
A) The lease transfers ownership of the property to the lesseeby the end of the lease term
B) The present value of the minimum lease payments equals orexceeds 90 percent of the fair value of the leased property, net oflessor's investment tax credit
C) The lease contains an option to purchase the leased property ata bargain price
D) The lease contains an option to renew
E) The lease term is equal to or greater than 75 percent of theestimated economic life of the leased property
15. Which statement is falseregarding the government-wide Statement of Net Assets?
A) The purpose of the Statement of Net Assets is to report theeconomic resources of the government as a whole
B) Assets are reported excluding capital assets
C) Capital assets are reported net of depreciation
D) Investments are reported at fair value rather than historicalcost
E) Business-type activities include Enterprise Funds
16. Which statement is falseregarding the Balance Sheet for Fund-Based Statements?
A) The Balance Sheet for Fund-Based Statements measures onlycurrent financial resources of the governmental entity
B) The Balance Sheet for Fund-Based Statements uses the modifiedaccrual method for timing purposes
C) Capital assets are not reported on the Balance Sheet forFund-Based Statements
D) The Balance Sheet for Fund-Based Statements measures onlylong-term financial resources of the governmental entity
E) Long-term debts are not reported on the Balance Sheet forFund-Based Statements
17. The city operates a publicpool where each person is assessed a $2 entrance fee. Which fund ismost appropriate to record these revenues?
A) General Fund
B) Enterprise Fund
C) Special Revenue Fund
D) Internal Service Fund
E) Capital Projects Fund
18. Which of the following typesof health care organizations follow FASB Accounting StandardsCodification for GAAP?
Investor-Owned Health Care Enterprises | Not-for-Profit Organizations | Governmental Health Care Organizations | |
A) | Yes | Yes | No |
B) | Yes | Yes | Yes |
C) | No | No | Yes |
D) | Yes | No | Yes |
E) | Yes | No | No |
A) Entry A
B) Entry B
C) Entry C
D) Entry D
E) Entry E
19. In accruing patient chargesfor the current month, which one of the following accounts should ahospital credit?
A) Accounts Payable
B) Deferred Revenue
C) Unearned Revenue
D) Patient Service Revenues
E) Accounts Receivable
20. Which account would becredited in recording a gift of medicine to a nursing home from anoutside party?
A) Nonoperating Gain - Contributions
B) Contractual Adjustments
C) Patient Service Revenues
D) Drugs and Medicines
E) Nonoperating Revenues - Contribution
21. Unconditional transfers ofcash or other resources to an entity in a voluntary nonreciprocaltransaction is the GAAP definition for
A) miscellaneous revenues
B) contributions
C) unconditional promises to give
D) exchange transactions
E) pledges
22. On a statement of functionalexpenses for a voluntary health and welfare organization, how areexpenses classified?
A) Health services expenses and operating expenses
B) Program services expenses and administrative servicesexpenses
C) Program services expenses and supporting services expenses
D) Operating expenses and supporting services expenses
E) Operating expenses and administrative expenses
Course Project Week 4
For this next part of the project you will build the Income Statement and Balance Sheet for the Bike Repair & Maintenance Shop (BRMS) for 2018. Use the information below and add another sheet to your Excel Workbook.
BRMS Information for 2018
In 2017, the repair shop was opened in October and ended the year with a ($10,500) operating loss.
Supply Inventory of parts & supplies maintained | $3,000 | |
Replacement parts are ordered as they are used. | ||
Shop hours of operation: 52 weeks a year. | ||
Monday - Friday 11am - 7pm | 8 hrs | |
Saturday 9am - 7pm | 10 hrs | |
Staff | FTEs | Salary |
Manager | 1 | $ 40,000 |
bookkeeper/purchaser | 0.8 | $ 20/hr |
Repairers | 2.5 | $ 18.50/hr |
Employee benefits: 20% of salary for the manager; 17% of salary for all others.
Supply costs | $ 65,000 |
utility costs | $ 7,200 |
marketing costs | $ 10,000 |
other costs | $ 22,000 |
Services Provided:
Budgeted: Repair Services: $100 each for 2,600 repairs
New Packages being considered
Package A: Preventative maintenance service package $ 80
Package B: Basic inspection, lube, adjust & clean shifting braking system $ 90
Package C: Annual peak performance package $100
Package D: Basic inspection, + replace shifting cables & preventative maintenance package $250
Estimated Services Provided under the new options:
Package A: 25 per week
Package B: 15 per week
Package C: 10 per week
Package D: 5 per week
Bike Repair & Maintenance Shop | |
Budgeted Income Statement | |
For the Year Ended December 31, 2018 | |
Revenue | |
Repair Fees | ? |
Other Income | ? |
Gross Revenues | ? |
Expenses | |
Salaries & Benefits | ? |
Wages & benefits | ? |
Utilities | 7,200 |
Marketing costs | 10,000 |
Supply costs | 65,000 |
Other costs | 22,000 |
Total Expenses | 104,200 |
Operating Income | ? |
Income tax | ? |
Net Income | $(43,692) |
Profit Margin | ? |
a) For the first full year of operations, BRMS was budgeted to lose over $40,000 performing repair services. These repairs have high fixed costs for the replacement parts in the repairs. If BRMS decided to expand their services to provide bicycle inspections and preventative maintenance, which use more employee time than supplies, what would the projected change in profit be?
b) If a decision is made to add more service oriented repairs is there a change in fixed and variable costs for repair services?
c) Complete a new ACTUAL Income Statement based on your decisions in a & b. Then complete the Balance sheet below.
Bike Repair & Maintenance Shop | |
Balance Sheet | |
December 31, 2018 | |
Assets | |
Cash | $ 8,500 |
Investments | - |
Accounts Receivable (net) | 6,000 |
Prepaid Expenses | 3,000 |
Inventory | ? |
Plant, Property & Equipment | 5,000 |
Less: Accumulated Depreciation | (167) |
Total Assets | $ 25,333 |
Liabilities | |
Accounts Payable | $ 4,500 |
Accrued Liabilities | 700 |
Salaries Payable | 4,000 |
Long-term liabilities | - |
Total Liabilities | $ 9,200 |
Common Stock | ? |
Retained Earnings | ? |
Total Stockholders' Equity | ? |
Total Liabilities & Stockholders' Equity | ? |
Next Steps: Financial Analysis for both BRBS & BRMS.
Using the information below for BRBS complete the financial metric analyses as indicated in Chapter 9 of the textbook for both BRMS (above) & BRBS.
The Income Statement for the Buy-Right Bike Shop is provided below for 2017 and 2018.
BUY-RIGHT BIKE STORE | ||
Income Statement | ||
2018 | 2017 | |
Sales - Online | $ 11,080,000 | $ 6,240,000 |
Sales - In store | 580,400 | 312,000 |
Sales returns | 221,600 | |
Gross Revenues | 11,438,800 | 6,552,000 |
Cost of Goods sold | 5,540,000 | 3,276,000 |
Contribution Margin | $ 5,898,800 | $ 3,276,000 |
Expenses | ||
Salaries & Benefits | $ 144,000 | $ 139,206 |
Wages & benefits | 391,880 | 274,997 |
Utilities | 13,200 | 13,000 |
Marketing costs | 200,000 | 200,000 |
Contributions & Community Involvement | 58,040 | 31,200 |
Other costs | 1,375,000 | 1,200,000 |
Operating Income | 3,716,680 | 1,417,597 |
Income tax | 1,077,837 | 411,103 |
Net Income | $ 2,638,843 | $ 1,006,494 |
Profit Margin | 23% | 15% |
Sales volume | ||
Bike C - online | 95,000 | 60,000 |
Bike A - online | 4,800 | - |
Bike C - in store | 5,100 | 3,000 |
Bike A - in store | 200 | - |
total Sales volume | 100,000 | 63,000 |
The Balance Sheet for Buy-Right Bike Store is provided below:
Buy-Right Bike Store | ||
Balance Sheet | ||
December 31, 2018 | ||
Assets | ||
Cash | $ 1,500,000 | |
Investments | 225,000 | |
Accounts Receivable (net) | 1,250,000 | |
Prepaid Expenses | 30,000 | |
Inventory | 58,280 | |
Plant, Property & Equipment | 1,800,000 | |
Less: Accumulated Depreciation | 60,000 | |
Total Assets | $ 4,923,280 | |
Liabilities | ||
Accounts Payable | 83,250 | |
Accrued Liabilities | 4,414 | |
Salaries Payable | 7,913 | |
Long-term liabilities | 30,000 | |
Total Liabilities | $ 125,577 | |
Common Stock | 1,152,366 | |
Retained Earnings | 3,645,337 | |
Total Stockholders' Equity | $ 4,797,703 | |
Total Liabilities & Stockholders' Equity | $ 4,923,280 |