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31.Braxton Company uses the retail method to estimate the cost of ending inventory. Use the following information to estimate the cost of Braxton's ending inventory on December 31, 2010, using the retail method. Show your answer in good form. CostRetail January 1, 2010, inventory$ 35,000$ 65,000 Purchases162,500265,000 Purchases returns and allowances(6,000)(10,000) Freight-in8,500 Sales247,500 Sales returns and allowances(7,500) .
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51.Under the perpetual inventory system, cost of goods sold is not recorded until the end of the accounting period. 52.Ending merchandise inventory for LIFO will be the same dollar amount under a periodic inventory system as under a perpetual inventory system. 53.When the average-cost method is applied to a perpetual inventory system,.
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11.Despite its advantages, the just-in-time operating environment produces increased carrying costs for inventory. 12.The determination of the balance sheet cost of merchandise inventory is important to the determination of net income. 13.The portion of cost of goods available for sale that is not assigned to ending inventory is assigned to cost of.
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TRUE/FALSE 1.Supply-chain management works well in a just-in-time operating environment. 2.The lower the value assigned to ending inventory, the lower the gross margin. 3.Days' inventory on hand equals the inventory turnover divided by 365. 4.The costs included in work in process and finished goods inventories would properly contain manufacturing overhead costs. 5.Indirect materials and indirect.
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31.Which of the following bank reconciliation items would result in a journal entry on the company's books? a.Bank error b.Interest income c.Deposit in transit d.Outstanding checks 32.The goal of a successful credit policy is to maximize the potential profit on total credit sales while a.limiting credit losses to an acceptable level. b.minimizing the number of credit customers. c.keeping.
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41.A check that is outstanding for two consecutive months will appear only on the first month's bank reconciliation. 42.When a bank reconciliation balances, no errors could have been made by the bank or the company. 43.A bank reconciliation begins with the balances as of the beginning of the month. 44.On a bank reconciliation,.
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16.Why is the separation of duties an important control activity in a good system of internal control? 17.An accountant is responsible for the following activities: (1) receiving all cash; (2) maintaining the general ledger; (3) maintaining the accounts receivable subsidiary ledger that includes the individual records of each customer; (4) maintaining.
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11.The higher the receivable turnover, the lower the days' sales uncollected. 12.A company that factors its receivables will have a less favorable receivable turnover than a company that does not factor. 13.Securitization delays the receipt of cash from sales made on credit. 14.When Company A discounts, with recourse, a note to Company B,.
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27.The income statement account balances on December 31, 2010, for Janice Corporation appear below. In addition, beginning merchandise inventory was $3,000 and ending merchandise inventory was $4,000. Prepare a 2010 income statement for the company. Account NameBalance Sales$100,000 Sales Returns and Allowances1,500 Purchases50,000 Purchases Returns and Allowances3,000 Freight-In5,000 Selling Expense25,000 General and Administrative Expenses10,000 Income Taxes Expense1,800 28.Compute the dollar.
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21.Which of the following would be added to the balance per bank? a.Outstanding checks b.Bank service charges c.Collection of a note receivable by the bank d.Deposit in transit 22.Which of the following would be deducted from the balance per bank? a.An issued check that the company forgot to record on its books b.Bank service charge c.Outstanding checks d.NSF check 23.A.
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51.The direct charge-off method makes no attempt to match bad-debt losses with revenues. 52.The allowance method of handling bad debts violates the matching principle. 53.The account Allowance for Uncollectible Accounts is closed at the end of the accounting period. 54.Under the allowance method, Uncollectible Accounts Expense is recorded when an individual customer defaults. 55.The.
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11.Assuming the use of the periodic inventory system, use the data below to calculate the net cost of purchases and the goods available for sale for the year ended December 31, 2010. Merchandise Inventory, December 31, 2009$ 2,830 Merchandise Inventory, December 31, 20103,482 Cost of Goods Sold18,048 12.Assume that the $5,509 sales made by.
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31.Use this information to answer the following question. The selected accounts and balances for Keystone Market appear as follows: Advertising Expense$  14,000 Common Stock100,000 Dividends21,000 Freight-In7,000 Freight-Out Expense10,000 Interest Income24,000 Merchandise Inventory (Jan. 1)70,000 Merchandise Inventory (Dec. 31)56,000 Purchases60,000 Purchases Returns and Allowances4,000 Rent Expense9,000 Retained Earnings40,000 Sales150,000 Sales Returns and Allowances19,000 Wages Expense32,000 The amount of net sales on the income statement would be a.$169,000. b.$144,000. c.$131,000. d.$137,000. 32.Use this information.
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14.Demmler Corporation entered into the transactions listed below. In the journal provided, prepare Demmler's journal entries, assuming use of the periodic inventory system. Omit explanations. Oct.3Purchased $1,500 of merchandise on credit, terms n/15. 6Returned $300 of the goods purchased on October 3. 7Paid freight charges of $150 on goods purchased on October 3. 12Paid.
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25.Using the following information, calculate for 2010 (a) net sales, (b) cost of goods sold, (c) gross margin, and (d) net income. Freight-In$    200 Merchandise Inventory, December 31, 200915,000 Sales60,000 Purchases Returns and Allowances300 Advertising Expense4,000 Purchases20,000 Merchandise Inventory, December 31, 20105,000 Sales Returns and Allowances500 General and Administrative Expenses7,000 26.Using the following information, calculate for 20xx (a) net sales,.
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51.A company that uses the allowance method writes off a specific account as uncollectible, but then the customer pays. The entries made upon receiving payment will a.decrease Cash. b.decrease Accounts Receivable. c.increase Allowance for Uncollectible Accounts. d.decrease Uncollectible Accounts Expense. 52.Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts, a.total assets.
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TRUE/FALSE 1.Under securitization, a company sells its receivables in batches at a discount. 2.Purchasing receivables with recourse is riskier than purchasing them without recourse. 3.A contingent liability is generally disclosed in the notes to the financial statements. 4.A company's acceptance of credits cards, like MasterCard, is an example of factoring with recourse. 5.All operating transactions.
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21.Goods held on consignment should be included in the consignee's ending inventory. 22.In accounting for inventory, the assumed cost flow need not match the physical goods flow. 23.Inventory methods such as LIFO and FIFO deal more with cost flow than with goods flow. 24.Costs incurred in storing inventory usually are included in inventory.
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21.Feathertouch Company sold merchandize worth $800 on credit, terms n/15 and on the next day the customer returned merchandize worth $50, which cost $30 for Feathertouch company. What is the required journal entry to record the merchandize returns under the perpetual inventory system? a.Accounts Receivables  50 Sales Returns and Allowances   50 Cost of.
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21.Which of the following costs usually would not be included in the inventory cost? a.Storage costs b.Related tariffs c.Invoice price less purchases discounts d.Insurance on goods in transit 22.Which of the following terms best describes the assumption made in applying the four inventory methods? a.Cost flow b.Goods flow c.Asset flow d.Physical flow 23.Which of the following costs normally would be.
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26.Freyman's Shoe Store had net retail sales of $200,000 during the current year. The following additional information was obtained from the accounting records. At CostAt Retail Beginning inventory$ 30,000$ 63,000 Net purchases for the period89,000193,000 Freight-in9,000 Estimate the company's ending inventory at cost using the retail method. (Show your work.) 27.During April, Leary Company sold 900.
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51.Which of the following inventory methods when used for income tax purposes must also be used for reporting purposes? a.Specific identification b.LIFO c.FIFO d.Average-cost 52.Use this inventory information for the month of September to answer the following question. a.$3,704 b.$7,696 c.More information is needed. d.$3,664 53.Use this inventory information for the month of September to answer the following question. a.$3,666 b.$3,712 c.$3,208 d.$7,734 54.Use this.
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61.When the allowance method is used, the write-off of an account receivable results in an expense at the time of write-off. 62.When an account receivable that was previously written off is collected, it is necessary to reverse the entry for the write-off before recording the collection. 63.The direct charge-off method of recognizing.
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31.In a petty cash fund, the current cash amount minus the receipts submitted should equal the original fixed amount. 32.The use of electronic funds transfers makes check writing unnecessary. 33.When an individual uses a debit card to make a purchase, the amount of the purchase is deducted directly from that individual's bank.
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  MULTIPLE CHOICE 1.Cash consists of all of the following except a.deposits in savings accounts. b.money orders from customers. c.compensating balances. d.IOUs from customers. 2.A company's acceptance of credit cards like Visa is an example of a.securitization. b.factoring with recourse. c.discounting. d.factoring without recourse. 3.Which of the following accounts is classified as a short-term financial asset? a.Office Supplies b.Accounts Receivable c.Equipment d.Prepaid Insurance 4.Which of the following.
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11.Days' sales uncollected equals 365 days divided by a.net sales. b.average net accounts receivable. c.net income. d.the receivable turnover. 12.The most liquid of all assets is a.cash. b.inventory. c.marketable securities. d.accounts receivable. 13.Which of the following would not be considered cash? a.Postage stamps b.Checks from customers c.Money orders from customers d.Bank deposits 14.Customers' accounts with credit balances should be disclosed as a(n) a.expense on the income.
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51.The bonding of employees is an example of which feature of a good system of internal control? a.Authorization of transactions b.Limited access to assets c.Sound personnel policies d.Separation of duties 52.Which of the following would not be found in a good system of internal control? a.Establishing a system of checks and balances b.Having one person handle all.
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71.A dishonored note means the payee's entry includes a a.credit to Accounts Receivable. b.debit to Interest Expense. c.debit to Notes Receivable. d.credit to Interest Income. 72.Cottage Sales Company made most of its sales on credit during its first year of operation, 2010. At the end of the year, accounts receivable amounted to $100,000. On December.
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11.Manufacturing overhead would not include which of the following costs? a.Packing materials b.Supervisory salaries c.Factory rent d.Raw materials 12.Which of the following is an inventory valuation method? a.First-in, first-out b.Average-cost c.Lower-of-cost-or-market d.Perpetual 13.Which of the following is an inventory costing method? a.Perpetual b.Lower-of-cost-or-market c.Specific identification d.Periodic 14.Inventory turnover is expressed in terms of a.days. b.a percentage. c.dollars. d.times. 15.Days' inventory on hand equals 365 divided by a.inventory turnover. b.cost of goods sold. c.goods.
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61.Under the direct charge-off method of dealing with uncollectible accounts, a.revenues and expenses are properly matched. b.Accounts Receivable is shown on the balance sheet at net realizable value. c.Uncollectible Accounts Expense is recorded in the period of the sale. d.no Allowance for Uncollectible Accounts exists. 62.If the amount of uncollectible accounts expense is understated at.
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4.Sandy's Supply Store, Inc., entered into the transactions listed below. In the journal provided, prepare Sandy's entries, assuming use of the perpetual inventory system. Omit explanations. Mar.2Purchased $900 of merchandise on credit, terms n/30. 6Returned $150 of the items purchased on March 2. 8Paid freight charges of $50 on the items purchased March.
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7.From the following data, calculate the amount of gross margin and gross purchases. 8.Compute the dollar amount of each item indicated by a letter in the following table. Treat each horizontal row of numbers as a separate problem. SalesBeginning Merchandise InventoryNet Cost of PurchasesEnding Merchandise Inventory              Cost of Goods Sold              Gross Margin             .
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  SHORT ANSWER 1.How is the matching rule applied when accounting for merchandise inventory? 2.Use the following figures (stated in millions of dollars) to compute the inventory a. Inventory turnover = ___________________ b. Days' inventory on hand = ___________________ 3.What is the chief objective of supply-chain management? How is it accomplished? 4.Condensed income statements for Newlon Company.
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31.Use this inventory information for the month of May to answer the following question. May1Beginning inventory20 units @ $76 7Purchase70 units @ $80 18Sale25 units 22Purchase10 units @ $88 29Sale40 units What is ending inventory under the specific identification method? a.$2,720 b.$2,800 c.More information is needed. d.$2,880 32.Use this information to answer the following question. Beginning inventory100 units @ $8.00 Purchase—Oct.200 units @.
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61.A remittance advice is attached to a(n) a.check. b.invoice. c.purchase order. d.receiving report. 62.Which of the following sets of documents are in the correct sequence? a.Purchase order, check, receiving report b.Purchase requisition, receiving report, purchase order c.Purchase order, purchase requisition, invoice d.Purchase requisition, purchase order, invoice 63.All of the following are the goals of internal controls over merchandising transactions except a.To.
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6.Assuming that ending inventory for 2009 was overstated, indicate whether each of the following will be understated (U), overstated (O), or not affected (N). _____ 1. Beginning inventory for 2010 _____ 2. Cost of goods sold for 2009 _____ 3. Stockholders' equity at the end of 2010 _____ 4. Income before income taxes for.
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11.A merchandising business will earn an income before income taxes of exactly $0 when a.net sales equals cost of goods sold. b.operating expenses equal net sales. c.gross margin equals operating expenses. d.cost of goods sold equals gross margin. 12.Merchandise inventory becomes part of cost of goods sold when a company a.receives payment from the customer. b.pays for.
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21.A discounted note represents a contingent liability because a potential liability exists. 22.Days' sales uncollected cannot be calculated without first knowing the receivable turnover. 23.A compensating balance refers to a minimum amount that must remain in a bank account as part of a credit-granting arrangement. 24.Compensating balances are kept separate from the Cash.
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41.Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $50,000. Allowance for Uncollectible Accounts has a credit balance of $1,000. Net sales for the year were $522,000. In the past, 2 percent of sales have proved uncollectible, and an aging.
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16.Given the following information about purchases and sales during the year, compute the cost to be assigned to ending inventory under each of three methods: (a) average-cost, (b) FIFO, and (c) LIFO. Assume the periodic inventory system is used. (Show your work.) Jan.1Beginning inventory100 items @ $4 =$  400 July1Purchases300 items @.
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31.If prices were to never change, there would be no need for alternative inventory methods. 32.The average-cost method relies on a simple average calculation. 33.The LIFO method tends to smooth out the peaks and valleys of a business cycle. 34.The LIFO method agrees with the actual physical goods flow in most businesses. 35.A major.
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41.Use this information to answer the following question. Jan.1Inventory15 units @ $4.00 8Purchase60 units @ $4.40 17Purchase30 units @ $4.20 25Purchase45 units @ $4.80 Total sales100 units A periodic inventory system is used. Cost of goods sold under FIFO is a.$429. b.$426. c.$452. d.$237. 42.Use this information to answer the following question. Jan.1Inventory15 units @ $4.00 8Purchase60 units @ $4.40 17Purchase30 units @ $4.20 25Purchase45 units.
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  MULTIPLE CHOICE 1.All of the following are inventory costing methods except a.first-in, first-out. b.average-cost. c.periodic. d.specific identification. 2.Which of the following is an inventory processing system? a.Perpetual b.Last-in, first-out c.Lower-of-cost-or-market d.Average-cost 3.Average inventory equals $100,000, and cost of goods sold equals $216,000. Days' inventory on hand equals a.168.98  days. b.170.0  days. c.157.9  days. d.193.1  days. 4.Cost of goods sold equals $500,000, and average inventory equals $200,000..
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41.On June 3, Maryland Company purchased merchandize worth $800 on credit, terms 2/10, n/30. The amount paid on June 15. What is the required journal entry to record the payment under the periodic inventory system? a.Accounts Payable  784 Purchases Discounts    16 Cash   800 b.Accounts Payable  800 Purchases Discounts     16 Cash   784 c.Cash   800 Accounts Payable   800 d.Accounts.
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71.Which of the following documents would be sent to the treasurer? a.Invoice b.Purchase order c.Check authorization d.Bank statement 72.Which of the following is an appropriate internal control activity for cash? a.The amount of cash on hand should be kept to a maximum. b.All payments should be made with currency, not checks. c.Banking facilities should be used as little.
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81.The entry to record payment of a $1,500 purchase within the 2 percent discount period would include a(n) a.decrease to Accounts Payable for $1,470. b.increase to Purchases Discounts for $30. c.increase to Accounts Payable for $1,500. d.increase to Cash for $1,500. 82.A purchase on account with an invoice price of $750 has been made. The.
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21.For each description below, state which document is being described. a. Document issued to permit the treasurer to make a payment b. Bill sent by the vendor to the purchaser c. Written request prepared by a department asking the purchasing department to make a purchase d. Document accompanying money put in the bank e. Document.
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11.Assume that during the physical count of the inventory of a large corporation last year, $750,000 of merchandise was not counted. The error was not detected, and the financial statements for the current fiscal year were prepared. Identify the individual statements that would be affected and explain the effect the.
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