Search
Info
Warning
Danger

Study Resources (Accounting)

20) Speed Motorcycles sold $550,000 of receivables to a factor to increase the company's liquidity. The company chose to factor these receivables without recourse. In exchange for these receivables, the factor paid Speed $485,000 on the date of transfer. Ultimately, the factor collected $525,000 from these receivables. Record the entry on.
0 Views
View Answer
51) What factor(s) differentiate a held-to-maturity investment from a 'loan or receivable'? A) Whether the instrument is a debt, equity or derivative instrument. B) Whether the instrument has a set maturity date. C) The instrument does not trade in an active market. D) Whether fair value information is available for the instrument. 52) Fisher Corporation.
0 Views
View Answer
81) Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2011, but the inventory was excluded in error during the ending inventory count. What impact will this have on fiscal 2012 financial reporting? A) Gross margin is understated by $1,000. B) Cost of sales is overstated by $1,000. C) Ending.
0 Views
View Answer
16) Compare the FIFO and LIFO methods of inventory valuation. Which method provides better quality information and why? 17) Consider the following inventory information for last year: Number of units Cost per unit Beginning inventory, Jan 1 2,500 $130 Purchase, March 10,000 100 Purchase, July 5,000 90 Purchase, October 7,500 80 Goods available for sale 25,000 The company uses a periodic inventory system. The year-end inventory count indicated.
0 Views
View Answer
2) Soorya Inc. had the following balances for fiscal 2011. Jan 1, 2011 Dec 31, 2011 Accounts receivable 2,500,000 2,000,000 Allowance for doubtful accounts 125,000 unknown Additional information on 2011 transactions: Q1 Q2 Q3 Q4 Sales -Cash 100,000 200,000 150,000 250,000 -Credit 500,000 700,000 600,000 800,000 -Discounts given (only on credit sales) 25,000 40,000 35,000 50,000 Bad debts -write-offs 15,000 10,000 20,000 5,000 -collection on previously written off accounts 10,000 0 5,000 20,000 Here is an aging of the accounts receivable: Days outstanding Accounts receivable balance @ Jan 1, 2011 Accounts receivable balance.
0 Views
View Answer
6.2   Problems 1) Compare the perpetual inventory control system and the periodic inventory control system. Which system provides better information for inventory management? 2) Identify whether the following are benefits of using a perpetual inventory system (in comparison to a periodic system). 3) Identify whether the following are benefits of using a perpetual.
13 Views
View Answer
21) Which statement is correct about overhead? A) Fixed overhead is expensed under absorption costing. B) Fixed overhead is never capitalized. C) Variable overhead is always capitalized. D) Fixed overhead is capitalized under absorption costing. 22) Which transaction would not be included in year end inventory? A) Goods received on consignment at year end. B) Goods shipped.
0 Views
View Answer
21) Which statement is not correct about 'joint ventures'? A) Joint ventures usually have a limited life and a defined set of objectives or activities. B) A joint venture is the same as a partnership for financial accounting purposes. C) Unanimous consent for all decisions is required of all parties. D) There is a.
0 Views
View Answer
8) Explain why it is important to segregate duties of employees dealing with cash in an organization. Provide three examples of ways which this segregation could be made. 9) Explain some controls that can be used in an organization to safeguard cash and other assets. 10) Explain the differences and relationships among.
0 Views
View Answer
7) When can inventory be overstated under the absorption costing method? Explain the precautions within GAAP to prevent a potential overstatement of inventory under the absorption costing method. 8) Explain what problems are created for the analyst by the use of the absorption costing method under GAAP 9) Explain how fixed overhead.
0 Views
View Answer
10) Inventive Controls Ltd. was incorporated and started business early in January 2012 to manufacture electronic control devices to monitor traffic. Inventive purchased a small manufacturing plant and office building in a new industrial park and was in operation immediately. General ledger account balances at December 31, 2012 are as.
1 Views
View Answer
7.1   Multiple Choice Questions 1) What is a financial asset? A) An asset that has a fixed or determinable cash flow. B) Assets such as land and buildings that generate future cash flows. C) An asset arising from contractual agreements on future cash flows. D) An asset that does not generate future cash flows. 2) Which.
4 Views
View Answer
71) Which statement is correct about inventory errors? A) Misstatements in inventory can affect the beginning inventory amounts. B) Misstatements in inventory affect only the current accounting period. C) Misstatements in inventory only affect one reporting period. D) Misstatements self-correct over three reporting periods. 72) Which statement is not correct about inventory errors? A) Misstatements in.
1 Views
View Answer
20) Johnson Ltd. began operations on January l, 2012. Merchandise purchases and four alternative methods of valuing inventory for the first two years of operations are summarized below: 2012 2013 Purchases $700,000 $850,000 Ending inventory       -    Specific identification 210,000 203,000       -    FIFO 238,000 188,000       -    Average cost 224,000 189,000       -    Lower of cost and market 190,000 178,000 Requirements: a. Which of the four methods listed above.
0 Views
View Answer
3) Explain why an allowance for doubtful accounts is required under GAAP. Discuss how such an allowance should be established. 4) At December 31, 2012, Pinebrook Inc. reported $135,000 in accounts receivable and $9,300 in the allowance for doubtful accounts. In 2013, the company had $875,000 in credit sales and collected.
0 Views
View Answer
31) Philips has a 50% joint venture interest in Josef. Based on the following information, what amount will be presented for net income on Philips' proportionately consolidated income statement? Philips Josef Revenue 1,000 2,000 Income from Josef 200 Expenses 450 1,600 Net income 750 400 A) $200 B) $550 C) $750 D) $1,150 32) Kings has a 40% joint venture interest in Fisher. Based on the following.
0 Views
View Answer
25) Eastwick Company is preparing its financial statement for the year ended December 31, 2011. A summary of Eastwick's accounts receivable sub-ledger shows the following information:   Required: a. Calculate the amount of bad debts expense required for 2011. b. Present the journal entry to record bad debts expense for 2011. c. Present the journal.
0 Views
View Answer
5.3   Comprehensive Problems 1) Khanna Inc. had the following transactions, information and balances in its accounting records for fiscal 2011: (CAD = Canadian dollars; USD = U.S. dollars)     Balance in CAD at December 31, 2011 Post dated cheque from Delhi Holdings 10,500 Certified cheque from Bora Corp. 9,200 Stamps on hand 2,000 USD chequing account at Bank National 110,000 CAD.
0 Views
View Answer
21) Connect has been selling cellular phones for the last five years. Its best-selling model is the E-PHONE, and costs have been falling quickly recently (although selling prices to Connect's customers are stable). The following information pertains to the E-PHONE inventory for August 2013: Units Unit cost Opening inventory 4,000 $50 Purchase 1 2,400 40 Sale 1 (1,800) Purchase 2 4,400 53 Sale.
0 Views
View Answer
18) Consider the following inventory information for last year: Number of units Cost per unit Total cost Beginning inventory, Jan 1 8,500 $20 $160,000 Purchase, March 7,000 25 175,000 Purchase, July 10,000 30 300,000 Purchase, October 5,000 41 205,000 Goods available for sale 30,000 840,000 The company uses a periodic inventory system. The year-end inventory count indicated 3,700 units in inventory. Requirements: a. Calculate the weighted-average cost per unit for the year. b. Calculate the ending.
0 Views
View Answer
32) For each of the following independent scenarios, indicate the effect of the error (if any) on: i. 2012 net income; ii. 2013 net income; and iii. 2013 closing retained earnings. The company uses the periodic system of inventory and its fiscal year-end is December 31. Ignore income tax effects. Consider each of the.
0 Views
View Answer
4) Comfy Feet manufactures slippers. In 2011, the company hired a new bookkeeper who did not have appropriate training. The bookkeeper charged all of the following costs for manufacturing 70,000 pairs of slippers to "Production Expense." Raw materials $34,000 Factory labour 115,000 Variable manufacturing overhead 14,000 Fixed manufacturing overhead 17,000 Factory depreciation 30,000 Finished goods storage 1,500 Interest for carrying finished goods 1,600 Total $213,100 The company.
0 Views
View Answer
18) At the end of its first year of operations, December 31, 2013, Felicity Ltd.'s accounts show the following amounts: Accounts receivable $1,485,000 Allowance for doubtful accounts, before any adjusting or closing entries 11,000 Dr Bad debt expense for 2013 prior to any adjusting or closing entries 48,000 Dr Customer accounts written off as uncollectible during.
0 Views
View Answer
6.3   Comprehensive Problems 1) Top Trimaran manufactures sailboats. Due to recessionary conditions which have significantly depressed sales, the company had to cut back production to levels significantly below the normal level of 900 units a year. In 2013, the company's production resulted in the following figures: Item Amount Number of boats   Opening inventory 50 Production 740 Sales (690) Ending inventory 100 Standard cost.
0 Views
View Answer
41) Which statement is correct about a held-for-trading investment? A) The investment is recorded at fair value. B) Changes in fair value are recorded in OCI. C) The investment is recorded at amortized cost. D) The category cannot include debt instruments. 42) Fisher Corporation has the following investments at September 30, 2012: Historical cost Fair value Sept 30,.
0 Views
View Answer
3) SimBis Enterprises incurred the following costs to produce and sell its inventory in 2011: Raw materials consumed $100,000 Labour used 75,000 Variable overhead incurred 50,000 Fixed overhead incurred 25,000 Selling costs 20,000 General administration 10,000 Freight costs to bring in raw materials 12,000 Freight costs on shipments to customers 7,000 SimBis also noted that the following errors were made in recording transactions in 2011: Omitted recording.
0 Views
View Answer
13) What inventory costing methods are permissible under GAAP? Explain the impact of these alternative methods on the income statement and the balance sheet. 14) Explain the meaning of the following inventory costing methods: FIFO, specific identification, LIFO, and weighted average. 15) What is the difference between the gross margin and the.
0 Views
View Answer
23) Johnson Credit Union is a small, regional financial institution with a loyal customer base. Like most financial institutions, Johnson has a significant portfolio of home mortgages. Because of the nature of its operations, the risks relating to these mortgages are geographically concentrated. To reduce this risk, the credit union.
1 Views
View Answer
5.2   Problems 1) Explain why a bank reconciliation is necessary. 2) Identify the two criteria for classifying an investment as a cash equivalent. 3) Identify if the following investments meet the requirements to be classified as cash and cash equivalents. 4) Identify whether each of the following items should be classified in 'cash and.
1 Views
View Answer
91) Assume that ending inventory in fiscal 2011 is overstated by $1,000.What impact will this have on fiscal 2012 financial reporting? A) Retained earnings is overstated by $1,000. B) No effect on inventory value on the balance sheet. C) Retained earnings is understated by $1,000. D) Inventory is understated on the balance sheet. 92) Assume.
3 Views
View Answer
30) A particular production process requires two types of raw materials to produce the end product. Each unit of finished product requires three units of raw material A and 2 units of raw material B and processing costs of $35. The following provides information on inventories at year-end: Inventory item # units Cost.
0 Views
View Answer
51) The following information was taken from the inventory records of Helena Ltd.: Dates Inventory units Inventory — Feb 1 100 units at $3.00 Purchases — April 1 300 units at $3.10 Purchases — July 15 200 units at $3.20 Units available for sale 600 units Sales — May 10 200 units at $6.00 Sales — November.
0 Views
View Answer
11) What is the meaning of 'control'? A) Ability to participate in the financial and operating policy decisions of the investee. B) Ability to govern the financial and operating policies of an entity. C) Ability to share in strategic decisions affecting an entity. D) Ability to sell the shares of an entity. 12) What is.
1 Views
View Answer
61) Mirvish Limited invests in short term investments. The following information is available about its investments at December 31, 2012: Cost Market Investment 1 $40,000 $36,000 Investment 2 30,000 26,000 If Mirvish accounts for these as available-for-sale investments, what entry is necessary for fiscal 2012? A) A loss of $8,000 to net income B) A gain.
0 Views
View Answer
31) Which statement is correct about the specific identification method? A) It is prone to earnings management if used for distinguishable items. B) This method is most appropriate for low-value inventory items. C) It is inexpensive to maintain inventory records under this method. D) This method is most appropriate for high-value inventory items. 32) Which.
0 Views
View Answer
11) Outdoor Devices Inc. manufactures sport hunting equipment. The company's operations had the following results for 2011. Actual production volume approximated normal levels. F = favourable variance, meaning actual costs were below standard; U = unfavourable variance, meaning actual costs exceeded standard. Assume all variances are considered to be material. Requirements: a.Determine.
0 Views
View Answer
61) Why are inventories reported at the lower of cost and market? A) Neutrality. B) Matching. C) Conservatism (prudence). D) Comparability. 62) Which statement best explains 'net realizable value'? A) The amount required to re-manufacture an item of inventory. B) The amount that can be obtained from the sale of inventory less selling costs. C) The amount it.
1 Views
View Answer
6.1   Multiple Choice Questions 1) Which statement is not correct about the perpetual inventory system for inventory management? A) This system keeps track of additions to and withdrawals from inventory. B) It is not necessary to conduct an inventory count if the perpetual system is used. C) This method produces timely information for management. D).
5 Views
View Answer