Exam 6: Receivables and Inventories

At the end of a period before the accounts are adjusted, Allowance for Doubtful Accounts has a balance of $250, and net sales on account for the period total $500,000.If uncollectible accounts expense is estimated at 1% of net sales on account, the current provision to be made for uncollectible accounts expense is $4,997.50.

In a period of rising prices, the effect of selecting the FIFO rather than the LIFO method of inventory valuation results in:

Inventory costing methods place primary emphasis on assumptions about:

If the cost of an item of inventory is $70, the current replacement cost is $65, and the sales price is $85, the amount included in inventory according to the lower-of-cost-or-market method is:

What type of account is Allowance for Doubtful Accounts?

A 90-day, 10% note for $10,000 dated March 15 is received from a customer on account.The face value of the note is:

Jack Inc.offers a credit term of n/30.This means that the company:

During deflationary periods, the use of the LIFO method of costing inventory will result in a greater amount of net income than would result from the use of the FIFO method of inventory costing.

Classify the following as either Current Assets (CA), Investments (I), or both (CA and I). (a)Trade Receivables (b)Note Receivable due in 30 days (c)Interest Receivable on note due in 30 days (d)Note Receivable due in 2 years (e)Five-year Note Receivable due in a series of equal annual payments

The maturity value of a 12%, 60-day note for $1,000 is $1,020.(Assume 360 days in a year)

Determine the due date and amount of interest due at maturity on the following notes (Assume 360 days in a year): Origination Date Face Amount Term of Note Interest Rate Maturity Date Interest Amount (a) March 1 \ 5,000 60 days 9\% (b) May 15 \ 9,000 120 days 8\%

Use the following data to calculate the cost of ending inventory using the LIFO method. September 1 Beginning Inventory 15 units at \ 20 each September 10 Purchase 20 units at \ 25 each September 20 Purchase 25 units at \ 28 each September 30 Ending Inventory 30 units

If merchandise inventory is being valued at cost and the price level is consistently rising, which method of costing will yield the highest inventory?

Jade Inc.recorded the following information pertaining to its inventory for the month of January: 1 Inventory 80 units at \ 20 each 18 Purchase 150 units at \ 25 each Sales 106 units ​ The business uses the first-in, first-out inventory costing method.Determine the cost of the inventory on hand at the end of January.

If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is:

In valuing damaged merchandise for inventory purposes, net realizable value is the estimated selling price less any direct cost of disposal.

Net income is reduced when a specific receivable is written off under the analysis of receivables method.

The use of the lower-of-cost-or-market method of inventory valuation increases the gross profit for the period in which the inventory replacement price declined.

Under the direct write-off method, an attempt is made to match Bad Debt Expense to sales revenues in the same accounting period.

Indicate the section of the balance sheet (current assets, fixed assets, investments, current liabilities, long-term liabilities, stockholders' equity) in which each of the following is reported: (a)Note receivable due in 3 years (b)Note receivable due in 90 days (c)Allowance for doubtful accounts