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21) A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10, net/30.  Defective inventory of $200 is returned 2 days later and the accounts are appropriately adjusted.  If the company paid the vendor 25 days later, which of the following entries would.
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Learning Objective 6-5 1) Which of the following assets must be reported at the lower-of-cost-or-market? A) Accounts receivable B) Inventory C) Prepaid insurance D) Cash 2) Which of the following is used for market when valuing inventory at lower-of-cost-or-market? A) Sales price less the company's normal mark-up percentage B) Current replacement price C) Cost plus the company's normal.
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Learning Objective 6-8 1) Using the FIFO costing method will always produce the same results whether a company uses perpetual or periodic inventory. 2) Using the LIFO costing method will always produce the same results whether a company uses perpetual or periodic inventory. 3) Under periodic inventory the company first calculates Cost.
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  Learning Objective 6-1 1) The consistency principle states that business should use the same accounting methods from period to period. 2) The lower-of-cost-or-market rule demonstrates accounting conservatism in action. 3) If a company discovers a small error in inventory costs-one which would have no significant impact on the financial statement-they may choose.
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11) Samson Company had the following balances and transactions during 2013. Beginning inventory 10 units at $70 March 10 Sold 8 units June 10 Purchased 20 units at $80 October 30 Sold 15 units What would the company's Inventory amount be on the December 31 2013 balance sheet if the perpetual average-costing method is used? ( 12) Samson Company.
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    Learning Objective 5-1 1) The accounting cycle for a merchandising company begins with the purchase of inventory. 2) The periodic inventory system keeps a running record of inventory and cost of goods sold. 3) The perpetual inventory system keeps a running record of inventory and cost of goods sold. 4) The periodic inventory.
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21) The following contains information from the records of the Wellborn Engineers and Architects, PC: Wellborn Engineers and Architects, PC Selected Financial Information December 31, 2013 Current assets $74,000 Current liabilities 44,000 Long-term assets 95,000 Long-term liabilities 60,000 Total revenues 50,000 Total expenses 30,000 Which of the following statements is an accurate interpretation of Wellborn Engineers and Architects', PC current ratio?  A) The company has $2.32.
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31) Berring Sales uses FIFO.  The partially completed inventory record for January appears below. On January 14 the company sold 10 units.   On January 29 the company sold 50 units.   Complete the inventory record through the January 14 sale and calculate the Cost of goods sold for the sale on January.
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11) Under which of the following categories would Land appear?  A) Long-term assets  B) Current assets  C) Long-term liabilities  D) Current liabilities  12) Under which of the following categories would Accounts payable appear?  A) Current liabilities  B) Current assets  C) Long-term liabilities  D) Long-term assets  13) Which of the following.
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Learning Objective 7-6 1) The cash balance in a company's general ledger and the bank's balance on the bank statement will generally be different because of the time lag in recording transactions. Risk Analysis 2) On a bank reconciliation, deposits in transit are subtracted on the book side of the reconciliation. 3).
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Learning Objective 4-7 1) Reversing entries are required by GAAP. 2) Reversing entries are used for convenience and to save time. 3) Reversing entries are posted on the first day of the month. 4) Which of the following statements is FALSE concerning reversing entries? A) They are not required by GAAP. B) They are used.
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11) If the bank reconciliation includes interest revenue, a journal entry is required which debits Cash and credits Interest revenue. 12) Which of the following is a benefit of online banking? A) The business can reconcile to the bank's balance at any time. B) The bank reconciliation is not necessary. C) The business can.
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Learning Objective 5-8 1) Baltic Supplies provides the worksheet shown below at the end of the year: A count of the physical inventory at year end shows that there is actually $11,000 of inventory left.  Assuming this is the only adjusting entry needed at year-end, please post the inventory adjustment to.
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Learning Objective 5-5 1) Cost of goods sold appears on both a multi-step income statement and a single-step income statement. 2) Both purchase discounts and sales discounts appear on the income statement of a company that uses the perpetual inventory method. 3) Referring to the following table, what is Operating income? Sales revenue $460,000 Cost.
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21) Which of the following items found on a bank reconciliation does NOT require an adjusting entry? A) Interest earned B) A bank service charge C) A note collected by the bank D) Deposits in transit 22) Which of the following is TRUE about a bank reconciliation? A) A bank reconciliation should not be prepared by.
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41) Berring Sales uses the average cost method.  The partially completed inventory record for January appears below. On January 14 the company sold 10 units.   On January 29 the company sold 50 units.   Complete the inventory record and calculate the Cost of goods sold for the month of January.  (Please round.
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20) An adjusted trial balance is shown below. Debit Credit Cash $12,600 Accounts receivable 2,400 Prepaid rent 800 Inventory 28,000 Accounts payable $4,200 Salary payable 1,000 Notes payable 800 Common stock 1,000 Retained earnings 12,800 Dividends 1,000 Sales revenue 96,000 Sales returns and allowances 1,600 Sales discounts 400 Cost of goods sold 25,000 Salary expense 21,000 Rent expense 14,000 Depreciation expense 8,500 Supplies expense 500 Total $115,800 $115,800 Please prepare the second closing entry: 21) An adjusted trial balance is shown below. Debit Credit Cash $12,600 Accounts receivable 2,400 Prepaid rent 800 Inventory 28,000 Accounts payable $4,200 Salary payable 1,000 Notes payable 800 Common stock 1,000 Retained earnings 12,800 Dividends 1,000 Sales revenue 96,000 Sales returns and allowances 1,600 Sales.
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21) Michelin Jewelers completed the following transactions.  Michelin Jewelers uses the perpetual inventory system.  On April 2, Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15, n/30.   Michelin's cost of the merchandise sold was $5,500. Which of the following journal entries correctly records the Sales.
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31) On November 1, 2012, Everett Janitorial Supply sold merchandise for $5,000, FOB destination, 2/10, n/30.  The merchandise cost $3,200.  Please provide the journal entry to record Sales revenue. 32) On November 1, 2012, Everett Janitorial Supply sold merchandise for $5,000, FOB destination, 2/10, n/30.  The merchandise cost Everett $3,200.  Please.
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Learning Objective 5-4 1) When a company uses the perpetual inventory method, it should NOT be necessary to conduct a physical count of inventory. 2) The entry to close Sales discounts and Sales returns and allowances results in a debit to Income summary. Answer:  FALSE Diff: 1 LO:  5-4 EOC:  S5-9 AACSB:  Content/Knowledge AICPA Business:  Strategic/Critical Thinking AICPA.
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Learning Objective 6-2 1) Ending inventory equals the number of units on hand multiplied by the unit cost. 2) Ending inventory equals the cost of goods available for sale less beginning inventory. 3) Under Last-In First-Out the Cost of goods sold is based on the oldest purchases. 4) The various costing methods are.
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Learning Objective 7-3 1) The control environment is one of the five components by which a company can achieve its internal control objectives. 2) Risk assessment is the "tone at the top" of a business, starting with the owner and the top managers. Risk Analysis 3) External auditors monitor company controls to.
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11) Avery Supplies uses periodic inventory.  Avery purchased $10,000 of inventory on account.  The terms were 3/10, n/30.   The purchase was made on February 1.  Which of the following journal entries properly records this transaction? A) Purchases 10,000      Accounts payable 10,000 B) Accounts payable 10,000      Purchases 10,000 C) Inventory 10,000      Accounts payable 10,000 D) Inventory 10,000      Cash 10,000 12) Avery Supplies uses periodic inventory.  Avery purchased $10,000.
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Learning Objective 5-7 1) With a periodic inventory method, purchases, purchase discounts, and purchase returns and allowances are recorded in separate accounts. 2) With a periodic inventory method, it is necessary to conduct a physical count of inventory to determine cost of goods sold. 3) Which of the following would appear on.
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21) Which of the following describes the internal control procedure assignment of responsibilities? A) To validate their accounting records, a company should have an audit by an external accountant. B) The company should separate the custody of assets from accounting. C) The external auditors will monitor internal controls. D) Have clearly assigned responsibilities for.
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11) Which of the following statements about internal control is FALSE? A) Internal auditors insure that employees follow company policies. B) The treasurer is the officer ultimately responsible for writing of checks. C) External auditors are employees of the company. D) The control environment is known as the "tone at the top." Risk Analysis 12).
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Learning Objective 7-1 1) Internal control is the organizational plan and all the related measures adopted by an entity to safeguard assets, encourage employees to follow company policy, promote operational efficiency, and ensure accurate and reliable accounting records. 2) Which of the following is TRUE of internal control? A) A company's outside.
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11) An adjusted trial balance is shown below. Debit Credit Cash $12,600 Accounts receivable 2,400 Prepaid rent 800 Inventory 28,000 Accounts payable $4,200 Salary payable 1,000 Notes payable 800 Common stock 1,000 Retained earnings 12,800 Dividends 1,000 Sales revenue 96,000 Sales returns and allowances 1,600 Sales discounts 400 Cost of goods sold 25,000 Salary expense 21,000 Rent expense 14,000 Depreciation expense 8,500 Supplies expense 500 Total $115,800 $115,800 What will be the final balance in Retained earnings after the closing entries? A) $37,800 B) $12,700 C) $24,000 D) $36,800 12) Sales revenues were $20,000, Sales returns and.
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38) Reid Art Supply Company uses a perpetual inventory system.  The company had the following transactions during August, 2012: Aug. 5Reid Company purchased $2,900 of merchandise on account.  Freight and credit terms were FOB shipping point, 3/15, n/60. Aug. 9Reid Company paid transportation costs of $440 for the Aug. 5 purchase. Aug. 10Reid Company.
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21) Below is a list of various balance sheet accounts and their balances. Debit Credit Notes payable?short term $800 Salary payable 3,600 Notes payable?long term 20,000 Accounts payable 2,200 Unearned revenue 1,000 Interest payable 2,200 What is the total of current liabilities which would be shown on the balance sheet? A) $29,800 B) $9,000 C) $9,800 D) $6,800 22) Below is a list of various balance sheet accounts and their.
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Learning Objective 6-6 1) An overstatement of ending inventory in the current period results in the understatement of net income in the current year. 2) Ending inventory for the current year is overstated by $20000. What effect will this error have on the following year's Net income? A) The inventory overstatement will.
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31) Using the perpetual inventory system, discounts taken on an invoice, such as 3/10, n/30, would be: A) debited to Inventory. B) credited to Inventory. C) debited to Cost of goods sold. D) credited to Cost of goods sold. 32) When a company ships goods to a customer and pays for freight out, how is.
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11) Which of the following inventory costing methods yields the highest ending inventory when costs are rising during the accounting period? A) Specific-unit-cost B) Average-cost C) Last-In First-Out D) First-In First-Out 12) Which of the following inventory costing methods yields the lowest ending inventory when costs are rising during the accounting period? A) Specific-unit-cost B) Average-cost C) Last-In.
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11) A purchase return of goods purchased on credit is recorded by the purchasing company as a debit to what account? A) Accounts receivable B) Inventory C) Cost of goods sold D) Accounts payable 12) What is freight out? A) Transportation costs to ship goods into the warehouse B) Inventory costs C) Costs that are not expensed D) Transportation.
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11) Williams Company had the following balances and transactions during 2013. Beginning inventory 10 units at $70 June 10 Purchased 20 units at $80 December 30 Sold 15 units December 31 Replacement cost $60 What would the company's inventory amount be on the December 31 2013 balance sheet if the perpetual LIFO method is used? ( 12) Williams.
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