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Study Resources (Accounting)

45.Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers: DateTransactionNumber of UnitsCost per Unit 1/1100$800 5/5Purchase200$900 8/10Purchase300$1,000 10/15Purchase200$1,100 During the year, Lauer sold 750 laptop computers. What was cost of goods sold using the FIFO cost flow assumption?  A. $725,000. B. $740,000. C. $735,000. D. $720,000. 46.Lauer.
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Multiple Choice Questions 35.A company reported the following information for its most recent year of operation: purchases, $100,000; beginning inventory, $20,000; and cost of goods sold, $110,000. How much was the company's ending inventory?  A. $10,000. B. $20,000. C. $15,000. D. $30,000. 36.Coleman Company has provided the following information: beginning inventory,.
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83.Which of the following statements does not accurately describe the effect of the sale of inventory at a profit on the financial statements? A. Income from operations and current assets both increase. B. Operating income and gross profit both increase. C. Net income and earnings per share both increase. D. Current assets do.
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39.Flyer Company has provided the following information prior to any year-end bad debt adjustment: • Cash sales, $150,000 • Credit sales, $450,000 • Selling and administrative expenses, $110,000 • Sales returns and allowances, $30,000 • Gross profit, $490,000 • Accounts receivable, $110,000 • Sales discounts, $14,000 • Allowance for doubtful accounts credit balance, $1,200 Flyer estimates bad debt expense.
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59.A company had the following partial list of account balances at year-end: Sales Returns and Allowances$1,000 Accounts Receivable38,000 Sales Discounts2,100 Sales Revenue95,000 Allowance for Doubtful Accounts1,200 How much is net sales revenue?  A. $91,900. B. $90,700. C. $89,900. D. $88,600. 60.A company purchased goods on credit with credit terms of 3/15, n/45. Although the company does.
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63.Which of the following statements regarding earnings per share is false?  A. It is reported on the income statement. B. It increases when net income increases. C. It is calculated using the average number of common shares outstanding during the period. D. It would not be affected by additional shares.
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65.The inventory turnover  A. reflects how many times, on average, that the inventory balance was sold during the year. B. is increased when accounts receivable increases. C. is decreased if inventory balances decrease from the beginning of the year to the end of the year. D. is improved if cost.
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138.Determine the effect of the following errors on the financial statements. Code your answers as follows and do not leave any blank spaces. O: If the error results in an overstatement of the financial statement component. U: If the error results in an understatement of the financial statement component. N:.
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55.Maxim Corp. has provided the following information about one of its products: DateTransactionNumber of UnitsCost per Unit 1/1Beginning Inventory200$140 6/5Purchase400$160 11/10Purchase100$200 During the year, Maxim sold 400 units. What is cost of goods sold using the average cost method?  A. $48,000. B. $64,000. C. $50,000. D. $62,000. 56.Which of the following statements is false?  A. Companies.
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85.RJ Corporation has provided the following information about one of its inventory items: DateTransactionNumber of UnitsCost per Unit 1/1Beginning Inventory400$3,200 6/6Purchase800$3,600 9/10Purchase1,200$4,000 11/15Purchase800$4,200 During the year, RJ sold 3,000 units. What was cost of goods sold using the LIFO cost flow assumption under a periodic inventory system?  A. $11,680,000. B. $11,590,000. C. $11,480,000. D. $11,550,000. 86.RJ Corporation.
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11.The FIFO inventory method allocates the earliest inventory purchase costs to ending inventory. 12.The LIFO inventory method allocates the oldest inventory purchase costs to cost of goods sold. 13.During periods of decreasing unit costs, use of the LIFO inventory method will result in a higher amount of ending inventory than.
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Essay Questions 104.The balance sheet for Glenwood Corporation at December 31, 2016 showed the following subtotals: Current assets$140,000 Current liabilities80,000 Buildings and equipment420,000 Total stockholders’ equity420,000 Retained earnings120,000 Total liabilities210,000 Other long-term assets70,000 Required: Based on the above data, calculate the following amounts: A.Total assets_______ B.Long-term liabilities_______ C.Common stock and Additional paid-in capital_______ D.Total liabilities and stockholders’ equity_______    105.Ridgetop Corporation reported the following amounts.
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Multiple Choice Questions 33.Which of the following tasks is not performed by the Securities & Exchange Commission (SEC)? A. Overseeing the work of the Financial Accounting Standards Board (FASB). B. Overseeing the work of the Public Company Accounting Oversight Board (PCAOB). C. Taking responsibility for protecting investors and maintaining the integrity of the.
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49.What would be incorrect about reporting accounts receivable in the balance sheet?  A. Presenting accounts receivable net of allowance for doubtful accounts. B. Presenting accounts receivable at estimated net realizable value. C. Presenting accounts receivable less bad debt expense and write-offs. D. Presenting accounts receivable at gross amount, less allowance.
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Chapter 06 Reporting and Interpreting Sales Revenue, Receivables, and Cash Answer Key True / False Questions 1.When goods are shipped FOB shipping point, title passes to the buyer on the shipment date. 2.When goods are shipped FOB destination, the revenue from the sale is recognized on the shipment date. 3.Credit card discounts.
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True / False Questions 1.The use of raw materials in the manufacturing process is reported as an operating expense on the income statement. 2.Manufactured goods transferred out of work in process are reported as finished goods on the balance sheet. 3.Inventory inspection costs are reported as operating expenses on the income.
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Essay Questions 112.McMillan Company uses the periodic inventory system. It has compiled the following information in order to prepare the financial statements at December 31, 2016: Gross sales during 2016$2,000,000 Sales returns and allowances during 201650,000 Beginning inventory, January 1, 2016100,000 Ending inventory, December 31, 2016120,000 Purchases during 2016750,000 Required: Calculate each of the following: A. Cost.
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117.A recent annual report for Kirova Company contained the following data:  (in millions)  20162015 Accounts receivable$2,026$1,866 Less: Allowance for doubtful accounts5052 Net accounts receivable1,9761,814 Net sales (all are on credit)18,158 Required: A. Calculate the accounts receivable turnover ratio. B. Calculate the average days' sales in receivables for 2016 (rounded to the nearest day). C. Explain the meaning.
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73.Which of the following statements is false when a company sells inventory costing $700 for $1,200 cash and operating expenses are $200? A. Cost of goods sold is $700. B. Gross profit is $500. C. Stockholders' equity increases by net income of $300. D. Net sales increase $500. 74.Which of the following statements is.
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89.The Ward Company has provided the following information: • Net sales totaled $750,000. • Beginning net accounts receivable was $65,000. • Ending net accounts receivable was $85,000. What was Ward's receivables turnover ratio?  A. 10.0 B. 8.8 C. 11.5 D. 5.0 90.The Ward Company has provided the following information: • Net sales totaled $750,000. • Beginning.
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99.Redwing Company sold inventory costing $500 to a customer on account for $700. Which of the following correctly describes the collection of $686 cash when the customer takes advantage of a sales discount?  A. Operating expenses increase $14. B. Accounts receivable decreases $686. C. Current assets decrease $14. D. Gross.
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112.Determine the effect of the following transactions on the identified financial statement components and ratios. Code your answers as follows: A: If the transaction results in an increase in the financial statement component or ratio. B: If the transaction results in a decrease in the financial statement component or ratio..
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79.Which of the following demonstrates a poor internal control procedure?  A. The bookkeeper makes cash deposits and records journal entries related to cash, while the treasurer prepares the bank reconciliation. B. The president, who does no bookkeeping, prepares the bank reconciliation each month. C. The treasurer signs all checks after.
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21.When preparing the statement of cash flows, the reason that net sales revenue is adjusted for the change in accounts receivables is to convert net sales to cash collected from customers, since accounts receivable represents sales revenue not collected from customers at the beginning and end of the accounting year..
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112.On December 31, 2016, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: Accounts receivable$25,000 Allowance for doubtful accounts200credit balance Sales revenue (all credit sales) 400,000 Required: Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions: A. An.
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43.Information disclosed in a balance sheet about shares of common stock includes the number of shares that are: A. Authorized and Issued. B. Issued and Outstanding. C. Authorized, Issued, and Outstanding. D. Authorized, Issued, Outstanding, and Not Outstanding. 44.Stockholders' equity, also called shareholders' equity, includes which of the following two accounts? A. Common stock.
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21.Inventory turnover is calculated as cost of goods sold divided by average inventory. 22.Inventory turnover under LIFO is greater than inventory turnover under FIFO when unit costs are increasing. 23.The average days to sell inventory decreases as inventory turnover increases. 24.An increase in inventory is subtracted from net income when.
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True / False Questions 1.External users of accounting information include decision makers such as investors, creditors, and financial analysts. 2.The mission of the Securities & Exchange Commission (SEC) is to develop generally accepted accounting principles. 3.Independent auditors are advisors who analyze financial statements and other economic information to formulate forecasts and.
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11.When a particular account receivable is determined to be uncollectible, the journal entry to write off the account reduces net income. 12.When a particular account receivable is determined to be uncollectible, the journal entry to write off the account reduces cash. 13.The allowance for doubtful accounts is reported as a.
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93.Marino Company has provided the following information: Net sales, $480,000 Net income, $24,000 Average total assets, $200,000 What is Marino's total asset turnover?  A. 12.0 B. 8.33 C. 0.42 D. 2.4 94.Marino Company has provided the following information: Net sales, $480,000 Net income, $24,000 Average total assets, $200,000 What is Marino's return on assets?  A. 240% B. 12%.
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107.FocusMore, Inc., had the following list of accounts taken from its adjusted trial balance at December 31, 2016: Accounts Payable$15,000 Accounts Receivable 18,000 Accumulated Depreciation-Building 26,200 Advertising Expense   12,800 Building 100,000 Common Stock 60,000 Cash 15,000 Cost of Goods Sold 56,500 Depreciation Expense   2,000 Utilities Expense   3,800 Utilities Payable   1,900 Inventory 25,000 Land 30,000 Prepaid Insurance   4,600 Interest Revenue   2,500 Retained Earnings (Jan. 1, 2016) 58,000 Wages Expense 48,000 Wages Payable   4,600 Sales150,000 Supplies Inventory     1,200 Supplies Expense     2,000 Deferred Rent Revenue      700 Required: Prepare a multiple step income statement for the year.
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109.Indicate whether each of the accounts listed below normally will have a debit balance or a credit balance. Record your answer to the left of each account by entering either Dr or Cr. ____ 1.Allowance for doubtful accounts ____ 2.Bad debt expense ____ 3.Sales returns and allowances ____ 4.Credit card discounts ____ 5.Sales discounts ____ 6.Notes.
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105.Which of the following statements is correct when inventory unit costs are decreasing?  A. FIFO's cost of goods sold will be the largest among the inventory costing methods. B. LIFO's income tax will be the lowest among the inventory costing methods. C. Ending inventory using the FIFO cost method will.
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114.Determine the effect of the following transactions on the identified financial statement components and ratios. Code your answers as follows: A: If the transaction results in an increase in the financial statement component or ratio. B: If the transaction results in a decrease in the financial statement component or ratio..
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116.Determine the effect of the following transactions on the financial statements components identified. Code your answers as follows: A: If the transaction results in an increase in the financial statement component or ratio. B: If the transaction results in a decrease in the financial statement component or ratio. C: If.
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Essay Questions 106.The following data were taken from the records of Lilo Corporation for the year ended December 31, 2016 before any adjustment for bad debt expense: Sales of merchandise for cash$150,000 Sales of merchandise on credit800,000 Sales returns and allowances10,000 Sales salaries expense80,000 Cost of sales610,000 Administrative expenses90,000 The following items have not been included in.
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119.Select the appropriate answer choice A through G (listed below) to correspond with the following numbered items on a bank reconciliation. There may be more than one letter selection for the numbered item. 1.Balance per bank statement, June 30 $XXX  Plus(1)_____  Minus(2)_____  Correct cash balance, June 30 $XXX 2.Balance per company books, June 30 $XXX  Plus(3)_____  Minus(4)_____  Correct cash balance, June.
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128.On July 10, 2016, Rex Company sold merchandise at an invoice price of $5,000 with terms of 2/10, n/30.Required: Prepare the journal entries required below by indicating the account code of the appropriate account for each debit and credit and enter the dollar amounts for each item. Account Code ACash BAccounts receivable CSales revenue DSales.
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69.Which of the following statements does not correctly describe the allowance for doubtful accounts balance? A. It is reported on the balance sheet as a component of current assets. B. It is a contra-asset account. C. It is reported on the balance sheet as a stockholders' equity account. D. It is created as.
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123.A comparison of the balance in Cottonwood Company's cash account per its books as of April 30, 2016 and the bank statement dated April 30, 2016 revealed the following information: CodeItem A.Ending Cash balance per books (unadjusted)$5,520 B.Ending balance per bank statement (as of April 30, 2016)5,170 C.Customer’s NSF check returned by bank Shown.
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109.Anthony Inc. reported the following amounts on its 2016 and 2017 income statements:  20172016 Net Sales$20,438$20,367 Cost of sales  7,943  8,198 Requirements: A. Compute the gross profit percentage for years 2016 and 2017. B. Provide at least two potential causes for the change in Anthony's gross profit percentage.    110.Twin Lakes, Inc. reported the following December 31.
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118.The following income statement was reported for Bauer Inc. for the first year of operations ending December 31, 2016 reported (in thousands of dollars): Sales revenue $24,500 Expenses:  Cost of Sales$14,700 Wages3,300 Rent 700 Utilities    500 Miscellaneous   200 Total Expenses   19,400 Income before taxes   5,100 Income tax expense        1,785 Net income $3,315 Requirement: A. Calculate gross profit percentage. B. Calculate net profit margin. C. Calculate earnings per share if.
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95.Carr Corporation has provided the following information for its most recent month of operation: sales $8,000; beginning inventory $1,000; ending inventory $2,000 and gross profit $5,000. How much were Carr's inventory purchases during the period?  A. $9,000. B. $5,000. C. $6,000. D. $4,000. 96.Carp Corporation has provided the following information.
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115.Cyclone Inc. reported the following figures from its financial statements for the years 2015 through 2017:  201720162015 Net credit sales$717,422$1,110,178$591,786 Gross profit560,421960,434498,605 Net income (net loss)(92,788)70,77647,811 Cash flow from operating activities106,850509,707204,496 Accounts receivable68,64890,56256,454 Required: A. Calculate the accounts receivable turnover for 2017 and 2016. B. Calculate the average collection period for 2017 and 2016.    116.Matrix Corp. reported.
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125.A. What are "cash equivalents"?B. Specifically where would cash equivalents appear on the financial statements?      127.Asia Company sold $10,000 of goods to Euro Company on credit on May 1. At the time of the sale, Asia recorded a debit to Accounts Receivable and a credit to Sales Revenue for $10,000..
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Multiple Choice Questions 29.Which of the following statements is correct? A. Revenue is recognized at the time of shipment when goods are shipped FOB destination. B. Sales returns and allowances are reported as operating expenses on an income statement. C. A seller records revenue when title and risks of ownership transfer to the.
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11.Corporate governance refers to the procedures designed to ensure that the company is managed in the interest of the board of directors who oversee management. 12.The fraud triangle conditions necessary for financial statement fraud to occur are the existence of a system of internal control, the ability to invade the.
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53.Kryton Corp. has provided the following information: Gross profit was $620,000; Cost of goods sold was $380,000; Net income was $400,000. What was Kryton's gross profit percentage?  A. 40% B. 61.3% C. 62% D. 155% 54.Brimmel Corp. has provided the following information: Sales were $780,000; Cost of goods sold was $429,000; Net income was $195,000. What was Brimmel's.
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