Question

69. The following entry was made on March 12 for XYZ Company:

Dr: Machinery
Cr: ACCounts Payable

For which of the following transactions was this entry made?
Answers:
a. Payment for purchase of machinery
b. Sale of machinery
c. Depreciation of machinery
d. Purchase of machinery
70. The concept of present value ____________________.
Answers:
a. can be simply defined as today’s value of a stream of future cash flows
b. implies that the value of receiving cash today will be less than the value of receiving it in the future
c. is employed extensively in the valuation of assets under current generally accepted accounting practices
d. determines the minimum amount that a buyer would be willing to pay for an asset
71. The estimated and unpaid liability for current income taxes is called ______________.
Answers:
a. Tax Expense
b. Accounts Payable
c. Income Taxes Payable
d. Cash
72. Different balance sheet items employ different valuation methods. Which of the following valuation applications is NOT generally accepted?
Answers:
a. A major line of inventory has increased in value substantially above its cost and has been restated to its current replacement cost
b. Machinery is stated at its historical cost less the estimated amount of benefits consumed to date
c. Cash is received for goods to be delivered next month; the cost of goods to be delivered
d. Common stock is stated at the amount at which it was originally sold
73. In preparing its Year 1 adjusting entries, the XYZ Company neglected to adjust rental fees received in advance from the amount of rental fees earned during Year 1. Which of the following reflects the result of this error?
Answers:
a. Year 1 net income is understated, the balance in retained earnings is understated, and liabilities are overstated.
b. Year 1 net income is overrated, the balance in retained earnings is overstated, the liabilities are correctly stated.
c. Year 1 net income is understated, the balance in retained earnings is understated, and liabilities are understated.
d. None of the above
74. The cumulative amount of net income in excess of dividends declared that has been earned by a business since its inception is called ___________________.
Answers:
a. Premium on Preferred Stock
b. Common Stock
c. Retained Earnings
d. Cash
75. The balance in the ________________ account is the amount owed to the company by its customers.
Answers:
a. Equity
b. Accounts Receivable
c. Cash
d. Accounts Payable
76. Ms. Brown is an attorney who collects a retainer fee from all of her new clients. At the beginning of the year, the Unearned Retainer Fee account had a balance of $24,000. Ms. Brown collected additional retainer fees totaling $94,000 from her clients during the year. Her year-end Balance Sheet reports a $16,000 balance in the Unearned Retainer Fee account. How much of the retainer fees were earned by Ms. Brown during the year?
Answers:
a. $108,000
b. $110,000
c. $86,000
d. $102,000
77. On December 26 of Year 1, XYZ Company hired three sales associates to begin work immediately on an after-Christmas sale. The associates were paid on January 9 of Year 2. Disregarding amounts, what entry should have been made on December 31 of Year 1?
Answers:
a. Dr: Salary Expense, Cr: Salary Payable
b. Dr: Salary Expense, Cr: Cash
c. Dr: Salary Payable, Cr: Cash
d. Dr: Salary Payable, Cr: Salary Expense
78. The amount of proceeds from the sales of Preferred Stock in excess of par value is called _______________.
Answers:
a. Common Stock
b. Retained Earnings
c. Premium on Preferred Stock
d. Current Assets
79. The normal balances in Depreciation Expense and its related Accumulated Depreciation accounts are ______________________.
Answers:
a. debit and credit respectively
b. credit and debit respectively
c. Both are debit
d. Both are credit

Answer 1

69)

The correct answer is d) Purchase of Inventory.

Supporting explanations:

Machinery is an asset and an asset always shows debit balance so when machinery is purchased, the machinery account is debited and when purchase is made on account or credit then Accounts Payable is credited which is a Liability account.

In the given journal entry, the machinery is debited and accounts payable so based on the above explanation, machinery is purchased so it is debited and accounts payable is credited because the purchase is on credit or on account.

Therefore, the correct answer is d) Purchase of Inventory.

Note: As per Chegg guidelines, the first question is answered, hence, please post the remaining questions separately.