Exam 6: Receivables and Inventories

Prepare the Current Assets section of a balance sheet using some or all of the following accounts: Cash Property, Plant, and Equipment Accounts Receivable Notes Receivable--90-day note Merchandise Inventory Allowance for Doubtful Accounts Interest Receivable Prepaid Advertising Sales Returns and Allowances

Days' sales in inventory estimates the average number of days it takes to:

The following units are available for sale during the year: January 1 Beginning Inventory 10 units at \ 18 each April 3 Purchase 30 units at \ 20 each August 31 Purchase 28 units at \ 25 each September 29 Purchase 17 units at \ 30 each December 31 Ending Inventory 21 units Determine ending inventory cost by (a) FIFO method, (b) LIFO method, and (c) average cost method.

The analysis of receivables method of costing inventory is based on the assumption that:

If sales is $1,000,000, cost of merchandise sold is $750,000, and average inventory is $220,000, how much would be inventory turnover?

The due date of a 60-day note dated July 12 is:

Which of the following statements is a correct representation of the effect of the reinstatement of an accounts receivable account previously written off?

Merchandise Inventory is presented on the balance sheet in the current assets section.

The due date of a 60-day note dated July 10 is September 9.

The person who is to be paid when a note matures is called the payee.

If a company has an accounts receivable turnover ratio of 15, the company:

Of the three widely used inventory costing methods (FIFO, LIFO, and average), the FIFO method of costing inventory is based on the assumption that costs are charged against revenues in the order in which they were incurred.

Under which method of inventory costing is the ending inventory assumed to be composed of the most recent costs?

When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory costing method is called:

A note receivable due in five years is listed on the balance sheet under the caption:

Joy Co.'s recorded inventory information for the month of August is as follows: Beginning Inventory 22 units at \ 15 each First Purchase 25 units at \ 18 each Second Purchase 21 units at \ 20 each Sales 48 units ? Determine the total cost of ending inventory according to (a) FIFO method and (b) LIFO method.

The party promising to pay a note at maturity is the payee.

Allowance for Doubtful Accounts has an unadjusted balance of $800 at the end of the year, and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000.Which of the following records the proper provision for doubtful accounts?

During inflationary periods, the use of the LIFO method of costing inventory will result in a lesser amount of net income than would result from the use of the average method of inventory costing.

In reference to a promissory note, the person who makes the promise to pay is called the: