Exam 7: Reporting and Interpreting Cost of Goods Sold and Inventory

In 2013, T Co.'s gross profit percentage was 39.8% while their competitor, WWW's percentage was 31.8%. Which was the most likely reason for WWW's lower percentage?

In recording the year-end adjusting entry for bad debt expense, a company would do which of the following?

On June 1, 20B, Budget Appliance Company sold merchandise on credit at an invoice price of $1,000; terms 2/10, n/30. Give the journal entries to record the following: A. To record the sale. B. Assumption A: To record collection on June 28, 20B. C. Assumption B: To record collection on June 9, 20B.

When is revenue recognized under the percentage of completion method?

For service companies, revenue is recognized the time at which services are provided.

On a bank reconciliation, which of the following would be deducted from the balance per bank?

The books of Tweed Company provided the following information: Beginning balances: Transactions during the year: Past collection experience has indicated that 1% of credit sales normally is not collected. Therefore, an adjusting entry for bad debt expense should be made in the amount of whic of the following?

A high receivables turnover ratio indicates

If a company has the opportunity to take a discount of 2/10, n/30 but must borrow money at an annual rate of 16%, what would be the net advantage of taking the discount?

Which of the following is required for effective control of cash?

Following the completion of an aging analysis, the accountant for Liberty estimated that $1,100 of the receivables would be uncollectible. What would the net realizable value of the receivables on Liberty's year-end balance sheet be?

The balance in Allowance for Doubtful Accounts would have a debit balance when

On Eli Corp's June bank reconciliation, cheques outstanding totaled $5,400. In July, the corporation issued cheques totalling $38,900. The July bank statement shows that $26,300 in cheques cleared the bank in July. A cheque from one of Eli Corp's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding cheques on Eli's July bank reconciliation should be

Upon completing an aging analysis of trade receivables, the accountant for Rosco Works estimated that $5,000 of the current $98,000 of trade receivables would be uncollectible. The allowance for doubtful accounts had a $400 credit balance at year-end prior to adjustment. What amount of bad debt expense should appear in Rosco's income statement for the year?

On the April 30 bank reconciliation, a deposit made by a company to its bank account on April 18 will appear as a(n)

The revenue recognition principle indicates that revenue should be recognized in the accounting records

Jackson Company uses the allowance method to account for bad debts. During 20D, a customer became bankrupt and a receivable of $5,000 was deemed uncollectible. What is the entry to record the uncollectible amount?

The following information comes from P Co.'s statements of earnings for 2012 an 2011: 1. Compute the gross profit percentage for a. 2012 ________ b. 2011 ________ 2. Provide at least two potential causes for the change in P Co's gross profit percentage.

Indicate the effect on a monthly bank reconciliation of each of the items listed below by placing the appropriate letter to the left of each item. A. Addition to the balance in the company's Cash account. B. Deduction from the balance in the company's Cash account. C. Addition to the balance on the bank statement. D. Deduction from the balance on the bank statement. E. Does not affect the reconciliation.

An aging of a company's trade receivables indicates that $6,500 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 debit balance, the adjustment to record bad debts for the period will require a