Exam 1: Intermediate Accounting Volume 1

Macaroon Corp.has sold goods at terms 1/10, n/30.If the discount is not taken, the amount payable is $8,524.Assuming Macaroon uses the net method, the entry to record the sale is

Losses in long-term construction projects

The preparation by some companies of biased information is sometimes referred to as

Use the following information for questions. Piano Construction Corp.began operations in 2014.Construction activity for 2014 is shown below.Piano uses the completed-contract method. -Which of the following should be shown on the statement of financial position at December 31, 2014 related to Contract 2?

Bank overdrafts are generally reported as

Which of the following actions would NOT be considered good management of accounts receivable?

All of the following costs should be charged to expense in the period in which they are incurred EXCEPT for

Use the following information for questions For Pear Limited, events and transactions during 2015 included the following.The tax rate for all items is 30%. 1)Depreciation for 2014 was found to be understated by $30,000. 2)A strike by the employees of a supplier resulted in a loss of $20,000. 3)The inventory at December 31, 2013 was overstated by $40,000. 4)A flood destroyed a building that had a book value of $400,000.Floods are very uncommon in that area. -The effect of these events and transactions on the balance of retained earnings at January 1, 2015 would be

Which of the following does NOT relate to the concept of relevance?

The accounts receivable turnover ratio is calculated by dividing

Use the following information to answers questions During 2014, Horn Corp.started a construction job with a total contract price of $700,000.Horn has consistently used the completed contract method.The job was completed on December 15, -Bundled sales Loon Inc., a software company sells new accounting software and user support bundled together.The fair value of the software is $1,500 and the fair value of the user support is $500. The user support is valid for a period of 12 months from the date of software purchase.To be able to compete with a competitor's offering, Loon decided to sell the bundle at a discount for $1,800. During its first month of sales, 100 units of this software bundle were sold at the discounted price, and expenses were $50,000. Instructions a)Calculate the sale price that should be allocated to each component of the bundle using the relative fair value method. b)Calculate the sale price that should be allocated to each component of the bundle using the residual value method. c)Assuming that the relative fair value method is used and income tax rate is 30%, calculate the net income applicable to Loon's first month of sales.

The gross profit method of inventory valuation is NOT suitable when

Management accounting can be broadly defined as the area of accounting that communicates financial information

Costs included in assets Burkina Ltd.is expanding its operations.Due to the expansion, they incurred the following costs during the fiscal period when they constructed a new factory: Instructions Which of these costs should be included in the cost of the new factory?

Reversing entries are usually used for

If a petty cash fund is established in the amount of $350, and contains $300 in cash and $45 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts:

Use the following information for questions Tehran Ltd.uses FIFO to cost its inventory.The following information is available for Tehran's inventory of product # 101: -Assuming Tehran uses the periodic inventory system, the entry to account for the March 1 purchase is

The gross profit method of inventory valuation

The operating cycle is the time between

When the stated rate and market rate of a note receivable are the same Cash and Receivables 7 - 13