Accounting Expert Answers & Study Resources : Page 207

Learning Objective 7-8 1) Before signing a check, the controller or the treasurer should examine the purchase order, the invoice, and the receiving report to determine that the company received the goods and that the company is paying only for the goods received. 2) A receiving report should be matched with.

27) Santa Fe Tile Company had the following inventory purchases and sales during the month of May.  The company uses the periodic inventory method.   Purchases     Sales     Date Units Unit Cost Total Units Unit Price Total May 1 100 $4 $400 5 200 5 1,000 10 100 $10 $1,000 15 100 6 600 20 150 7 1,050 25 200 11 $2,200 30 160 8 1,280 710 $4,330 300 $3,200 If Santa Fe uses LIFO costing, how much was the Cost of goods sold for the month? A) $1,400 B) $1,850 C) $1,380 D) $1,640 28) Santa Fe.

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,.

11) A petty cash fund was established with a $400 balance. It currently has cash of $10 and petty cash tickets as shown below. Travel expense $120 Office supplies $200 Equipment rental expense $70 The journal entry to replenish the account would be which of the following? A) Debit various expenses $390, credit Cash  $390 B) Debit various expenses.

8) Which of the following entries would be used to account for uncollectible receivables using the allowance method? A) Allowance for uncollectible accounts is debited and Uncollectible accounts expense is credited. B) Uncollectible accounts expense is debited and Allowance for uncollectible accounts is credited. C) Uncollectible accounts expense is debited and Accounts receivable.

8) The treasurer of a company is the chief accounting officer of that company. 9) The chief accounting officer of a company is the: A) controller. B) treasurer. C) external auditor. D) internal auditor. 10) The company officer who is responsible for writing checks is the: A) controller. B) treasurer. C) external auditor. D) internal auditor. 11) Which of the following.

Learning Objective 6-4 1) In a period of rising costs, FIFO produces lower cost of goods sold and higher grossprofit than LIFO. 2) In a period of rising costs, many companies prefer LIFO because it produces higher netincome and higher ending inventory. 3) Given the same purchase and sales data, the three.

7) Which of the following is a security procedure designed for e-commerce? A) Burglar alarms B) Firewalls C) Fireproof vaults D) Secure inventory storage 8) A malicious program that enters program code or destroys data without authorization is an example of: A) a password. B) phishing. C) encryption. D) a virus. 9) Which of the following is a security procedure.

15) 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 $78 What would the company's inventory amount be on the December 31, 2013 balance sheet if the perpetual average costing method is used? (Answers are.

5) Better Buy has six CD players in inventory on December 31.  The players were purchased in November for $170.  Price lists from Better Buy's supplier indicate that the same CD player would now cost the company $175.  The current sales price for each of the CD players is $320. .

47) A company which uses the perpetual inventory system purchased an order of 500 pallets of industrial soap for $8,000 and paid $750 for the freight-in.   The company sold the whole lot to a supermarket chain for $10,000 on account. The company uses the specific-identification-method of inventory costing.  Which of.

Learning Objective 8-1 1) The two major types of receivables are accounts receivable and notes receivable. 2) The creditor is the entity that signs a note. 3) The two major types of receivables are interest receivable and taxes receivable. 4) Notes receivable are usually longer in term than accounts receivable. 5) Which of the.

30) In reconciling a bank statement, the bank balance is $1000 and the checkbook balance is $1205.  Which of the following is the MOST probable reason why the checkbook balance is larger than the bank balance? A) The bank has not cleared certain checks. B) The bank has added interest revenue to.

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.

18) Which of the following describes the internal control component risk assessment? A) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate. B) Risk assessment is the "tone at the top" of the business. C) A company must identify its.

Learning Objective 8-5 1) Interest revenue must be reported for a note receivable that is outstanding at the end of the accounting period. 2) The maturity value of a note is the sum of the principal plus interest due at maturity. 3) A note is dishonored when the maker of the note.

4) An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account, supported by the fund (cash plus payment tickets) totaling the same amount. 5) A company has a petty cash fund amount of $200. When replenished, it has petty cash.

5) Ending inventory for the current accounting period is understated by $2,700. What effect will this error have on Cost of goods sold and Net income? A) Cost of goods sold Net income Understated Understated B) Cost of goods sold Net income Overstated Overstated C) Cost of goods sold Net income Understated Overstated D) Cost of goods sold Net income Overstated Understated 6) Ending inventory for the current accounting period is.

24) Charlton Sales has a receivable for $92 that they now deem to be uncollectible.  Charlton uses the direct write-off method.  Please provide the journal entry for the write-off. Learning Objective 8-4 1) A credit card processing company generally uses one of two methods of payment—the net and the gross method. 2).

4) Companies that use GAAP accounting will prefer the use of the direct write-off method. 5) Archer Company and Zorro Company both have significant amounts of accounts receivable at any time, and both experience uncollectible accounts from time to time.  Archer uses the percent-of-sales method to account for uncollectible accounts and.

Learning Objective 8-6 1) The acid-test ratio appears in the current assets section of the balance sheet. 2) Accounts receivable amounts are generally shown on the balance sheet net of the allowance. 3) The acid-test ratio is computed as current assets divided by current liabilities. 4) Days' sales in receivables is the ratio.

10) Journal entries that are necessitated by reconciling items on the book side of the reconciliation all include either a debit to Cash or a credit to Cash. 11) If the bank reconciliation includes interest revenue, a journal entry is required which debits Cash and credits Interest revenue. 12) Which of the.

38) At January 1, Davidson Services has the following balances: During the year, Davidson has $104,000 of credit sales, collections of $100,000, and write-offs of $1,400.  Davidson records Uncollectible accounts expense at the end of the year using the percent-of-sales method, and applies a rate of 1.1% based on past history. Prior.

47) On January 1, Wolfie's Supply sold $222 worth of goods to customer Abe Smith on account.  On January 12, Wolfie's collected the amount from the customer.  Please record the journal entry for the cash collection. 48) On January 1, Wolfie's Supply sold $222 worth of goods to customer Abe Smith on.

18) The following information is from the 2013 records of Armadillo Camera Shop: Accounts receivable, December 31, 2013 $20,000 (debit) Allowance for uncollectible accounts, December 31, 2013 prior to adjustment 600 (debit) Net credit sales for 2013 95,000 Accounts written off as uncollectible during 2013 7,000 Cash sales during 2013 27,000 Uncollectible accounts expense is estimated by the aging-of-accounts-receivable method.  Management.

11) GAAP prefers companies to use the: A) direct write-off method to evaluate bad debts. B) allowance method to evaluate bad debts. C) amortization method to evaluate bad debts. D) 360-day method to evaluate bad debts. 12) Which of the following is NOT a key issue in controlling and managing receivables? A) Separate cash-handling, credit, and.

28) In the following situation, which internal control procedure needs strengthening? At Hofstra Services, the operations accountant is responsible for safeguarding and maintaining the pipe inventory and also to record inventory transactions into the journal.  A separate accounting clerk keeps records of the cash receipts and payments.  The treasurer signs checks.

11) Which of the following statements describes a voucher? A) It is an order to purchase goods from a supplier. B) It is a statement from the supplier showing the goods purchased and the amount due. C) It is a report showing that the goods have been received in good condition as ordered. D).

21) On September 1, 2013, Adirondac Marine Supplies made a loan to one of its customers.  The customer signed a 6-month note for $1,500 at 10%.  How much interest revenue did Adirondac earn over the life of the note? A) $150 B) $75 C) $25 D) $50 22) On September 1, 2013, Adirondac Marine Supplies.

47) Please refer to the following bank reconciliation: Please prepare the adjusting entry for the first reconciling item (note collected by bank.) 48) Please refer to the following bank reconciliation: Please prepare the adjusting entry for the second reconciling item (interest revenue.) 49) Please refer to the following bank reconciliation: Please prepare the adjusting entry.

5) Which of the following is a requirement of the Sarbanes-Oxley Act? A) The outside auditor must issue an internal control report for each public company. B) The Public Company Oversight Board must conduct audits of public companies. C) Accounting firms may not both audit a public client and also provide certain consulting.

11) A company reports Net accounts receivable of $107,460 on its December 31, 2013 balance sheet.  The Allowance for uncollectible accounts has a credit balance of $3,200.  What is the balance in Accounts receivable? A) $104,260 B) $107,460 C) $105,860 D) $110,660 12) Assets are listed on the balance sheet in order of liquidity.  Which.

Learning Objective 7-7 1) A point-of-sale terminal (cash register) provides control over cash in the form of a tape record of sales which is compared to the count of the drawer. 2) As part of the internal control over cash receipts by mail, the mailroom sends both the customer checks and.

21) The accounting principle that states that we should never anticipate gains is which of the following? A) Accounting conservatism B) Materiality concept C) Disclosure principle D) Consistency principle 22) Which of the following concepts states that a company must perform strictly proper accounting ONLY for significant items? A) Accounting conservatism B) Materiality concept C) Disclosure principle D) Consistency.

17) Metro Computer Company had the following balances and transactions during 2012. Beginning inventory 100 units at $75 March 10 Sold 50 units June 10 Purchased 200 units at $80 October 30 Sold 150 units What would the inventory amount be as reported on the balance sheet at December 31, 2012 if the perpetual average-costing method.

9) Under which of the following inventory costing methods is the Cost of goods sold based on the cost of the oldest purchases? A) Specific-unit-cost B) Average-cost C) Last-In, First-Out D) First-In, First-Out 10) Under which of the following inventory costing methods is ending inventory based on the cost of the oldest purchases? A) Specific-unit-cost B) Average-cost C).

30) On October 1, 2012, Allen Jewelry Company accepted a 4-month, 10% note for $2,400 in settlement of an overdue account receivable. If the company accrues interest at year-end only, please provide the journal entry needed at year-end. 31) On October 1, 2012, Allen Jewelry Company accepted a 4-month, 10% note.

20) The bank charged a service fee of $20.  How would this information be included on the bank reconciliation? A) A deduction on the bank side B) An addition on the book side C) A deduction on the book side D) An addition on the bank side 21) Which of the following items found on.

7) 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 First-In, First-Out costing method is used? (Answers are.

52) A newly created design business called Smart Art is just finishing up its first year of operations.  During the year, there were credit sales of $40,000 and collections of $36,000.  One account for $650 was written off.   Smart Art uses the aging-of-accounts method to account for uncollectible account expense,.

21) Which of the following is TRUE of days' sales in receivables? A) Days' sales in receivables measures how many days it takes to order and receive inventory. B) Days' sales in receivables measures how frequently during the year the accounts receivable are collected. C) Days' sales in receivables measures how many days.

28) At the beginning of 2014, Mark's sales had the following ledger balances: During the year there were $450,000 of credit sales, $460,000 of collections, and $3,700 of write-offs.  At the end of the year, Mark's adjusted for uncollectible account expense using the percent-of-sales method, and applied a rate, based.

8) Golden Oak Antique Shop has the following account balances at the end of the current accounting period. Beginning inventory $73,250 Net purchases 57,650 Net sales revenue 85,500 A normal gross profit for the company is $45%.  What is the company's estimated cost of goods sold for the accounting period? A) $92,425 B) $38,475 C) $47,025 D) $83,875 9) Callahan Computers stores.

40) Please refer to the following information needed to reconcile the cash balance for Woods Paper Products. •A deposit of $5,794.62 is in transit. •Outstanding checks total $1,533.25. •The book balance is $5,695.62. •The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent. •The bank balance at February 28, 2008.

11) What is the total interest on a 3-month, 9% note for $32,000? A) $720 B) $1,440 C) $2,880 D) $460 12) What is the maturity value of a note? A) The principal amount minus interest due B) The principal amount plus interest due C) The face amount of the note D) The principal amount times the interest rate 13).

37) Berring Sales uses LIFO.  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 to the nearest.

34) On March 1, 2012, Bayonne Services made a loan to one of its officers.  The officer signed a 6-month note for $4,000 at 8%.  Bayonne generally accrues interest at year-end only, so at the time the note matured, Bayonne had not accrued any interest revenue.  On September 1, when.

6) When a check is issued, the party who is paying the cash is referred to as: A) payee. B) maker. C) bank signatory. D) depositor. 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.

5) When using periodic inventory, the closing process begins with closing out the Beginning inventory to Cost of goods sold.  The second step is to set up the ending inventory by debiting Cost of goods sold and crediting Inventory. 6) Samson Company had the following balances and transactions during 2012. Beginning inventory 10.

14) A company uses the direct write-off method to account for uncollectible receivables.  Which of the following is included in the entry to write off an uncollectible account? A) A debit to Uncollectible account expense B) A debit to the customer's Account receivable C) A credit to the Allowance for uncollectible accounts D) No.