Question 1

Under the allowance method Bad Debt Expense is recorded

Accepted Answer

A) when an individual account is written off. 
B) when the loss amount is known. 
C) for an amount that the company estimates it will not collect. 
D) several times during the accounting period. 
A) when an individual account is written off. 
B) when the loss amount is known. 
C) for an amount that the company estimates it will not collect. 
D) several times during the accounting period. C

Question 2

Grape Gratuities Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & 440\&&&\$4,180
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 50 units on hand.Using the FIFO inventory method the amount allocated to ending inventory for July is

Accepted Answer

A) $1170. 
B) $1010. 
C) $1070. 
D) $1100. 
A) $1170. 
B) $1010. 
C) $1070. 
D) $1100. C

Question 3

When is a physical inventory usually taken?

Accepted Answer

A) When goods are not being sold or received. 
B) When the company has its greatest amount of inventory. 
C) At the end of the company's fiscal year. 
D) When the company has its greatest amount of inventory and at the end of the company's fiscal year. 
A) When goods are not being sold or received. 
B) When the company has its greatest amount of inventory. 
C) At the end of the company's fiscal year. 
D) When the company has its greatest amount of inventory and at the end of the company's fiscal year. C

Question 4

Radical Radials Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &330\
&&&\$3,000
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 48 units on hand.Using the LIFO inventory method the amount allocated to ending inventory for July is

Accepted Answer

A) $930 
B) $912 
C) $960 
D) $1056. 
A) $930 
B) $912 
C) $960 
D) $1056.

Question 5

Under the allowance method of accounting for uncollectible accounts

Accepted Answer

A) the cash realizable value of accounts receivable is greater before an account is written off than after it is written off. 
B) Bad Debt Expense is increased when a specific account is written off as uncollectible. 
C) the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off. 
D) Allowance for Doubtful Accounts is closed each year to Income Summary. 
A) the cash realizable value of accounts receivable is greater before an account is written off than after it is written off. 
B) Bad Debt Expense is increased when a specific account is written off as uncollectible. 
C) the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off. 
D) Allowance for Doubtful Accounts is closed each year to Income Summary.

Question 6

Under the allowance method Bad Debt Expense is increased when an account is deemed uncollectible and must be written off.

Accepted Answer

A) True 
 B)False

Question 7

The specific identification method of inventory costing

Accepted Answer

A) always maximizes a company's net income. 
B) always minimizes a company's net income. 
C) has no effect on a company's net income. 
D) may enable management to manipulate net income. 
A) always maximizes a company's net income. 
B) always minimizes a company's net income. 
C) has no effect on a company's net income. 
D) may enable management to manipulate net income.

Question 8

In periods of inflation phantom or paper profits may be reported as a result of using the

Accepted Answer

A) perpetual inventory method. 
B) FIFO costing assumption. 
C) LIFO costing assumption. 
D) periodic inventory method. 
A) perpetual inventory method. 
B) FIFO costing assumption. 
C) LIFO costing assumption. 
D) periodic inventory method.

Question 9

Dobler Company uses a periodic inventory system.Details for the inventory account for the month of January 2022 are as follows: $$\begin{array} { l l r r } 
& \underline { \text { Units } } & \underline{\text { Per unit price }} & \underline { \text { Total } } \
\text { Balance, } 1 / 1 / 2022 & 300 & \$ 5.00 & \$ 1,500 \
\text { Purchase, } 1 / 15 / 2022 & 150 & 5.30 & 795 \
\text { Purchase, } 1 / 28 / 2022 & 150 & 5.50 & 825
\end{array}$$ An end of the month (1/31/2022) inventory showed that 240 units were on hand.If the company uses FIFO and sells the units for $10 each what is the gross profit for the month?

Accepted Answer

A) $1782 
B) $1818 
C) $3600 
D) $2400 
A) $1782 
B) $1818 
C) $3600 
D) $2400

Question 10

The direct write-off method of recognizing uncollectible accounts is not in accordance with good accounting practice.

Accepted Answer

A) True 
 B)False

Question 11

To record estimated uncollectible accounts using the allowance method the adjustment would be a(n)

Accepted Answer

A) increase to Accounts Receivable and an increase to Allowance for Doubtful Accounts. 
B) increase to Bad Debt Expense and an increase to Allowance for Doubtful Accounts. 
C) decrease to Allowance for Doubtful Accounts and a decrease to Accounts Receivable. 
D) increase to Loss on Credit Sales and a decrease to Accounts Receivable. 
A) increase to Accounts Receivable and an increase to Allowance for Doubtful Accounts. 
B) increase to Bad Debt Expense and an increase to Allowance for Doubtful Accounts. 
C) decrease to Allowance for Doubtful Accounts and a decrease to Accounts Receivable. 
D) increase to Loss on Credit Sales and a decrease to Accounts Receivable.

Question 12

Quiet Phones Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &330\
&&&\$3,000
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 48 units on hand.Using the LIFO inventory method the amount allocated to cost of goods sold for July is

Accepted Answer

A) $930. 
B) $990. 
C) $2010. 
D) $2070. 
A) $930. 
B) $990. 
C) $2010. 
D) $2070.

Question 13

Accounts receivable are one of a company's least liquid assets.

Accepted Answer

A) True 
 B)False

Question 14

Bonkers Bananas has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & 440\&&&\$4,180
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 50 units on hand.Using the LIFO inventory method the amount allocated to ending inventory for July is

Accepted Answer

A) $1100. 
B) $1010. 
C) $1070. 
D) $1000. 
A) $1100. 
B) $1010. 
C) $1070. 
D) $1000.

Question 15

Under the accounts receivable aging method the balance in Allowance for Doubtful Accounts must be considered carefully prior to adjusting for estimated uncollectible accounts.

Accepted Answer

A) True 
 B)False

Question 16

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

Accepted Answer

A) True 
 B)False

Question 17

Given equal circumstances which inventory method would probably be the most time-consuming?

Accepted Answer

A) FIFO 
B) LIFO 
C) Average-cost 
D) Specific identification. 
A) FIFO 
B) LIFO 
C) Average-cost 
D) Specific identification.

Question 18

M.Cornett is a corporation that sells breakfast cereal.Based on the accounts listed below what are M.Cornett's total trade receivables? $\begin{array}{lr}
\text { Income tax refund due } & \$ 500 \
\text { Advance due to the company from } & \
\text { the company president } & 300 \
\text { 3-month note due from } \mathrm{M} \text {. Cornett's main customer } & 2,000 \
\text { Interest due this month on the above note } & 100 \
\text { Due and unpaid from this month's sales } & 9,000 \
\text { Due and unpaid from last month's sales } & 1,000\
\end{array}$

Accepted Answer

A) $10000 
B) $12000 
C) $11000 
D) $12900 
A) $10000 
B) $12000 
C) $11000 
D) $12900

Question 19

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

Accepted Answer

A) True 
 B)False

Question 20

The following information was available for Camara Company at December 31 2022: beginning inventory $80000; ending inventory $120000; cost of goods sold $630000; and sales $900000.Camara's days in inventory in 2022 was

Accepted Answer

A) 40.6 days. 
B) 46.2 days. 
C) 57.9 days. 
D) 68.9 days. 
A) 40.6 days. 
B) 46.2 days. 
C) 57.9 days. 
D) 68.9 days.

Under the allowance method Bad Debt Expense is recorded

When is a physical inventory usually taken?

Under the allowance method of accounting for uncollectible accounts

Under the allowance method Bad Debt Expense is increased when an account is deemed uncollectible and must be written off.

The specific identification method of inventory costing

In periods of inflation phantom or paper profits may be reported as a result of using the

The direct write-off method of recognizing uncollectible accounts is not in accordance with good accounting practice.

To record estimated uncollectible accounts using the allowance method the adjustment would be a(n)

Accounts receivable are one of a company's least liquid assets.

Under the accounts receivable aging method the balance in Allowance for Doubtful Accounts must be considered carefully prior to adjusting for estimated uncollectible accounts.

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

Given equal circumstances which inventory method would probably be the most time-consuming?

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

The following information was available for Camara Company at December 31 2022: beginning inventory $80000; ending inventory $120000; cost of goods sold $630000; and sales $900000.Camara's days in inventory in 2022 was

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 6: Reporting and Analyzing Long-Lived Assets

Under the allowance method Bad Debt Expense is recorded

When is a physical inventory usually taken?

Under the allowance method of accounting for uncollectible accounts

Under the allowance method Bad Debt Expense is increased when an account is deemed uncollectible and must be written off.

The specific identification method of inventory costing

In periods of inflation phantom or paper profits may be reported as a result of using the

The direct write-off method of recognizing uncollectible accounts is not in accordance with good accounting practice.

To record estimated uncollectible accounts using the allowance method the adjustment would be a(n)

Accounts receivable are one of a company's least liquid assets.

Under the accounts receivable aging method the balance in Allowance for Doubtful Accounts must be considered carefully prior to adjusting for estimated uncollectible accounts.

Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

Given equal circumstances which inventory method would probably be the most time-consuming?

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

The following information was available for Camara Company at December 31 2022: beginning inventory $80000; ending inventory $120000; cost of goods sold $630000; and sales $900000.Camara's days in inventory in 2022 was

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters