Reference no: EM131056

Question 1

When a bill is due to be paid, an accounting employee pulls a voucher from the _______ file and prepares a __________ for the treasurer to sign.
Answer
a. tickler; check
b. cash receipts; check
c. tickler; voucher
d. registration; report

Question 2

Petty cash is usually shown on the balance sheet as:
Answer
a. a noncurrent asset.
b. Petty Cash.
c. a liability.
d. Cash.

Question 3

Cash forecasting is an aspect of which of the following?
Answer
a. conducting audits
b. an integrated cash management system
c. preparing a bank reconciliation
d. collecting franchise fees

Question 4

Danny Default is the maker of a note to the Long-Stay Hotel for his stay there. On the note's maturity date, Danny has not paid the note. Now the note is called a:
Answer
a. dishonored note.
b. non-interest-bearing note.
c. discounted note.
d. debtor.

Question 5

The Wayside Hotel uses the direct write-off method of accounting for bad debts. If the general manager of the hotel determines that a $700 debt is uncollectible and the current balance of Provision for Doubtful Accounts is $100, the journal entry to recognize this bad debt would involve:
Answer
a. debiting Accounts Receivable for $700.
b. crediting Accounts Receivable for $700.
c. crediting Provision for Doubtful Accounts for $600.
d. debiting Provision for Doubtful Accounts for $600.

Question 6

Using the allowance method of accounting for bad debt expense _________ the carrying value of Accounts Receivable.
Answer
a. increases
b. cancels out
c. decreases
d. has no effect on

Question 7

Net credit sales for the Breakeven Diner for the past year stands at $4,500. If the diner's manager uses the percentage of sales method of estimating bad debt and uses 1.5 percent for this purpose, the amount of bad debt for the year would be:
Answer
A. A. $9.50
B. B. $67.50
C. C. 18.40
D. D. $45.00

Question 8

A 60-day note for $5,000 with an interest rate of 12 percent per annum will have a maturity value of _____________. (Assume that there are 360 days in a year for the purpose of calculating the interest.)
Answer
A. A. $6,300
B. B. $5,600
C. C. $5,000
D. D. $5,100

Question 9

An interest-bearing note receivable dated April 14 matures on July 23. The principal amount is $10,000, the annual interest rate is 10 percent, and the total interest income for the note is _____________. (Assume that a year has 360 days for the purpose of calculating interest.)
Answer
A. A. $1,000
B. B. $273.97
C. C. $277.78
D. D. $280

Question 10

Which of the following is a policy or practice that endangers the security of a hospitality firm's inventory?
Answer

a. There is a separation between the custody of the inventory records and custody of the inventory.
b. A daily inventory of high-priced items must be taken.
c. The accountant who maintains the inventory records may not access the inventory itself.
d. A physical inventory is taken only once every five years.

Question 11

Inventory value is used to calculate _____________, which in turn is used to calculate gross profit. Answer
A. SALES REVENUE
B. COST OF GOODS SOLD
C. COST OF GOODS USED INTERNALLY
D. PURCHASES

Question 12

Some suppliers absorb the expenses involved in transporting goods to the buyer, but others who deliver will charge the buyer for freight costs. In freight terminology, FOB means:

a. freight on board, which means the freight charges will be included in the invoice amount.
b. the supplier will not charge the buyer for freight costs.
c. the supplier will charge the buyer for freight costs.
d. free on board, which doesn't necessarily mean free freight.

Question 13

FOB shipping point means that freight charges will be paid by the:
Answer
a. hospitality firm that ordered the shipment.
b. purchasing agent.
c. supplier.
d. freight company.
free on board, which doesn't necessarily mean free freight.

Question 14

FOB shipping point means that freight charges will be paid by the:
Answer

a.

hospitality firm that ordered the shipment.

b.

purchasing agent.

c.

supplier.

d.

freight company.

Question 15

Simone computes the gross profit percentage on the basis of previous years' figures. The fact that she is determining this percentage in this way means she must be using the _____________ method of estimating ending inventory.

Answer

a. gross profit
b. retail
c. weighted average
d. specific identification

Question 16

Given the following information, estimate the value of ending inventory using the gross profit method:

Beginning inventory$200
Purchases$50
Sales$100
Gross profit percentage50%
Answer
A. A. $175
B. B. $200
C. C. $225
D. D. $250

Question 17

Which of the following statements about inventory control systems is true?

Answer

a. A perpetual inventory system eliminates the need for a monthly physical count of items in storage.
b. Staff members who maintain an operation's perpetual inventory records should also have custody of the inventory itself.
c. A physical inventory of all products in storage areas is generally taken once a day.
d. . A periodic inventory system indicates how much of each product is on hand by maintaining a running balance of all products entered into and issued from storage areas.

Question 18

All of the following would typically be treated as revenue expenditures except the payment for a:
Answer

a. $20 calculator.
b. property tax bill.
c. tankful of gas for a hotel's shuttle bus.
d. new hotel building.

Question 19

Which of the following is the simplest of the methods of depreciation?
Answer
a. sum-of-the-years' digits method
b. units of production method
c. double declining balance method
d. straight-line method

Question 20

The Coral Reef Adventure Resort plans to transport guests to its underwater facility in a submarine. The sub cost $250,000, has a salvage value of $10,000, and has an estimated useful life of 48,000 hours, or 6 years' use. During the first year of the sub's operation, it was used for 8,000 hours. Using the units of production method of depreciation, calculate the sub's depreciation for the first year.
Answer
a. $41,667
b. $38,000
c. $40,000
d. $35,000

Question 21

The Coral Reef Adventure Resort plans to transport guests to its underwater facility in a submarine. The sub cost $250,000, has a salvage value of $10,000, and has an estimated useful life of 48,000 hours, or 6 years' use. During the first year of the sub's operation, it was used for 8,000 hours. Using the sum-of-the-years' digits method of depreciation, calculate the sub's depreciation for the first year.
Answer
a. $63,140
b. $68,061
c. $71,870
d. $68,571

Question 22

If a batch of linens is expected to have a useful life of less than one year, it should be recorded as a(n) _______.
Answer
a. depreciable expense
b. long-term asset
c. intangible asset
d. current asset

Question 23

A hotel trades an old van, which originally cost $20,000 and has a net book value of $4,000, for a new van. The new van has a market value of $28,000, and to purchase it, the hotel pays $22,000 in cash as well as turning in the old van. The new van is recorded on the books as having a value of:
Answer
a. $28,000.
b. $24,000.
c. $22,000.
d. $26,000.

Question 24

The main difference between accounts payable and notes payable is that notes payable:
Answer
a. are long-term liabilities instead of current liabilities.
b. are written promises to pay, not oral ones.
c. must be paid to restaurant or hotel guests.
d. are recorded on the income statement instead of the balance sheet.

Question 25

Felix, a restaurateur, wants to know more about the social security taxes he and his employees pay. The U.S. law that established the Social Security tax is the:
Answer
a. Tax Equity and Fiscal Responsibility Act.
b. Fair Labor Standards Act.
c. Federal Insurance Contributions Act.
d. Federal Unemployment Tax Act.

Question 26

Assume the FICA tax is 6.2 percent on the first $64,500 of earnings and 1.45 percent on earnings in excess of $64,500. Jean has earnings of $65,000. What is the total FICA tax on Jean's earnings (to the nearest $1)?
Answer
a. $4,006
b. $935
c. $4,030
d. $4,112

Question 27

KayLee's Cafeteria serves up to 300 guests each day and has 23 full-time employees. Which of the following best describes how the 8 percent tip regulation applies to this operation?
Answer
a. KayLee's Cafeteria is subject to the 8 percent tip regulation.
b. KayLee's Cafeteria is not subject to the 8 percent tip regulation.
c. KayLee's Cafeteria will be subject to the 8 percent tip regulation when it employs over 25 full-time employees.
d. . KayLee's Cafeteria is subject to the 8 percent tip regulation if it is a sole proprietorship.

Question 28

In a certain region, restaurant managers are allowed a 40 percent maximum tip credit. If the minimum wage in this region is $6.00, this means that:
Answer
a. . employers may subtract as much as $2.40 from the hourly wages of tipped employees under certain circumstances.
b. . none of the above.
c. . employers may subtract 40 percent of all tips that were earned by tipped employees from their wages.
d. . employers may subtract all tips that were earned by tipped employees from their wages.