Search
Info
Warning
Danger

Study Resources (Accounting)

17) Which statement is correct about absorption costing? A) Under this method, fixed overhead is considered a product cost because production cannot take place without these costs. B) Under this method, fixed overhead is considered a period cost because such costs do not vary according to production level. C) Under this method, variable.
0 Views
View Answer
8) Yang Construction Company entered into a contract to build a new airport terminal for $2,500,000. Construction commenced on August 1, 2011, with a planned completion date of December 31, 2013. A summary of the costs, billings, and collections is provided below:   2011 2012 2013 Costs incurred during the year 500,000 700,000 1,100,000 Estimated costs to complete at.
0 Views
View Answer
8) Community Apartments Inc. (CA Inc.) is building a luxury condominium for a contract price of $68,000,000. This is estimated to be a three-year project with an estimated cost of $54,000,000. CA Inc. uses the percentage-of-completion method of revenue recognition, using the cost-to-cost method of estimating the percentage complete. The.
2 Views
View Answer
44) In the chart below, identify the revenue recognition method that you feel is most appropriate and also explain why. Transaction Revenue recognition method Why? A. An appliance store sells and delivers a fridge with a two-year warranty. B. An airplane manufacturer signs a contract to supply two planes over four years for Air Canada. C..
1 Views
View Answer
2) Creation Construction Company (CCC) has contracted to build an office building for Property Corp. The construction started on January 1, 2012, and the project was completed on July 1, 2015. The contract price was $70 million. Due to uncertainties in the construction process, the two parties to the project.
0 Views
View Answer
24) Explain why the absorption costing method is appropriate under GAAP. 25) Explain what problems are created for the auditor by the use of the absorption costing method under GAAP. 26) When can inventory be overstated under the absorption costing method? Explain the precautions within GAAP to prevent a potential overstatement of.
0 Views
View Answer
27) In July, Telly-Rental sells a home theatre for $1,000 on an installment basis. The cost of goods sold is $400. How much deferred gross profit is recorded by Telly-Rental in July? A) $0 B) $400 C) $600 D) $1,000 28) Which statement best describes a franchise arrangement? A) An arrangement in which one party licenses.
0 Views
View Answer
1) Which statement best depicts the inventory cost flow equation? A) Cost of goods available for sale = Beginning inventory + Ending inventory. B) Beginning inventory + Purchases = Cost of sales + Ending inventory. C) Sales - Cost of goods sold = Gross margin. D) Gross margin - Operating expenses = Operating income. 2).
0 Views
View Answer
48) Through non-subscription sales, TV Weekly provides retailers with a 50% margin (or 100% mark up) on its magazines. The newsstand price is $8 per issue. During 2012, the company distributed 1,654,000 copies to retailers, not all of which were sold. Retailers sent a total of 390,000 unsold copies back.
0 Views
View Answer
28) The following information was taken from the inventory records of Hari 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 15 100 units at $6.10 What would be.
0 Views
View Answer
1) Which statement best explains the completed contract method? A) An accounting method that defers revenue and expense recognition until the date when the contractor completes the project. B) An accounting method that recognizes revenue and expenses on a contract in proportion to the degree of progress. C) An accounting method that recognizes.
0 Views
View Answer
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 $915,000 on accounts receivable. Pinebrook also wrote off $2,500 in uncollectible accounts. The company uses the aging method to.
0 Views
View Answer
6) ACME is investing in a new heavy oil rig operation in northern Alberta. ACME has hired Max Contractors to construct the facilities. The contract price is $4,450 million to be completed over four years. The following information pertains to this construction contract. (all amounts in $millions) Year 1 Year 2 Year 3 Year 4 Cumulative.
0 Views
View Answer
31) Which statement is correct about estimating the allowance for doubtful accounts? A) Under the income statement approach, bad debt expense is based on the accounts receivable amount. B) Under the income statement approach, bad debt expense is based on the percentage of credit sales. C) Under the income statement approach, bad debt.
0 Views
View Answer
1) Why is there risk of earnings overstatement in accounting for construction contracts? A) The long term nature of such contracts makes them a low risk area. B) Allocation of revenue and expenses between two or more periods simplifies the accounting. C) Significant professional judgment is required to make estimates used in the.
0 Views
View Answer
51) Which statement about using the aging of accounts receivable to estimate bad debt expense is correct? A) This method has the same results as estimating the bad debt expense by using the percentage of credit sales. B) This method records an adjustment to the allowance account irrespective of the balance in.
0 Views
View Answer
4) Buildings Ltd. is constructing a residential building in downtown Vancouver for a contract price of $15,000,000. Costs for this contract were initially estimated to be $12,000,000. The company uses the percentage of completion method of revenue recognition, using the cost-to-cost method of estimating the percentage complete. The following information.
0 Views
View Answer
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) With this method,.
3 Views
View Answer
38) Garrit Limited's income statement reported the following for the year ended Dec 31, 2012: Sales revenue 881,000 Cost of goods sold 573,000 Expenses 129,000 Net income 179,000 Which is the correct statement about the income statement? A) Mark-up on selling price is $573,000. B) Mark-up on cost is 53.75%. C) Gross margin percentage is 20.32%. D) Mark-up on the selling price is.
0 Views
View Answer
66) McGraw Motors both sells and leases vehicles. With sales temporarily slowing due to the economy, the company factored a significant portion of its lease receivables. The company factored with recourse receivables with a carrying amount of $22 million in exchange for $21.45 million less a holdback of $550,000 for.
1 Views
View Answer
19) What amount will be included in "cash and cash equivalents"? Treasury bills maturing in 10 days $12,000 Four-month U.S. term deposit 18,000 Bonds of a publicly traded U.S. company 10,000 U.S. treasury bill maturing in 120 days 24,000 A) $0 B) $12,000 C) $36,000 D) $64,000 20) What amount will be included in "cash and cash equivalents"? Euro treasury bills maturing in 140.
0 Views
View Answer
2) Soorya Inc. had the following balances for fiscal 2012. Jan 1, 2012 Dec 31, 2012 Accounts receivable 2,500,000 2,000,000 Allowance for doubtful accounts 125,000 unknown Additional information on 2012 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, 2012 Accounts receivable balance @.
0 Views
View Answer
11) What journal entry is required when inventory is sold during the year under the perpetual inventory system? A) Dr Cost of goods sold Cr Inventory B) Dr Cost of goods sold Cr Inventory Cr Purchases C) No Journal Entry is made D) Dr Purchases Cr Accounts Payable 12) Compare the perpetual inventory control system and the periodic inventory control system. Which system.
1 Views
View Answer
8) 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. 9) Which.
0 Views
View Answer
62) Beebo Ltd. provides for doubtful accounts based on 6% of credit sales. The following data are available for 2012. Credit sales during 2012 $3,550,000 Allowance for doubtful accounts, Jan 1, 2012 59,000 Cr Collection of accounts written off in prior years 3,500 Customer accounts written off as uncollectible during 2012 37,000 How much should the balance in the.
0 Views
View Answer
1) What is not included in "cash and cash equivalents"? A) Canadian cash on hand. B) Demand deposits. C) Six-month term deposits. D) Three-month Treasury bills. 2) Define "cash" and explain how funds that are subject to restrictions should be accounted for in the accounting records. 3) Explain why the definition of cash and cash equivalents.
4 Views
View Answer
9) What is included in "cash and cash equivalents"? A) Short term, liquid investments convertible into known amounts of cash. B) Short term, highly liquid investment convertible into known amounts of cash. C) Cash restricted for plant expansion. D) Sinking funds. 10) What dollar amount will be included in "cash and cash equivalents"? Treasury bills maturing.
2 Views
View Answer
1) What costs are not included in the cost of inventories? A) Raw materials. B) Labour used to make the finished product. C) Costs to deliver raw materials to the company. D) Costs to ship goods to customers. 2) Explain how manufacturing companies can manipulate earnings through its production process. What should an auditor or.
0 Views
View Answer
27) Explain how fixed overhead costs should be accounted for if a plant is made idle due to a prolonged strike. 28) 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.
0 Views
View Answer
37) YMN had sales of $1,500,000, including: • $25,000 of goods shipped on consignment to an unrelated company on December 28, 2012 and receivedby that company on December 31, 2012 • $20,000 of goods shipped F.O.B. shipping point to a different unrelated party on December 31, 2012 and received on January 2,.
0 Views
View Answer
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, 2012 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 chequing account at Bank.
0 Views
View Answer
6) Explain what is meant by "channel stuffing" and how this can be used to manipulate earnings. 7) Collier Port Authority has had a long-standing relationship with a nearby lumber company, which ships a significant amount of lumber through the port. To help finance the lumber company's operations, Collier advanced $10.
0 Views
View Answer
69) The accounting records of 10Com Ltd. show the following for 2012: Accounts receivable, Jan. 1, 2012 $55,000 Accounts receivable, Dec. 31, 2012 85,000 Allowance for doubtful accounts, Jan. 1, 2012 6,300 Bad debt expense before year end adjusting or closing entries, Dec 31, 2012 3,400 Dr * Customer accounts written off as uncollectible during 2012 5,550 ** *The credit side.
0 Views
View Answer