Question 1

The estimate of uncollectible accounts receivable based on the sales method violates the matching principle.

Accepted Answer

A) True 
 B)False  False

Question 2

Use the following data to calculate the cost of ending inventory using the LIFO method.

Accepted Answer

A) $825 
B) $750 
C) $675 
D) $600 
A) $825 
B) $750 
C) $675 
D) $600 C

Question 3

Using the lower-of-cost-or-market method of inventory valuation,what should the total inventory value be for the following items:

Accepted Answer

Item Inventory Quantity Unit cost price Unit market price Total cost price Total market price Lower-of- cost-or- market A 200 $5 $4.50 $1,000 $900 $ 900 B 100 4 5.00 400 500 400 C 50 7 6.50 350 325 325 $1,625

Question 4

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?

Accepted Answer

A) Increase Uncollectible Accounts Expense,$800; increase Allowance for Doubtful Accounts,$800 
B) Increase Uncollectible Accounts Expense $15,000; increase Allowance for Doubtful Accounts,$15,000 
C) Increase Uncollectible Accounts Expense,$14,200; increase Allowance for Doubtful Accounts,$14,200 
D) Increase Uncollectible Accounts Expense,$15,800; increase Allowance for Doubtful Accounts,$15,800 
A) Increase Uncollectible Accounts Expense,$800; increase Allowance for Doubtful Accounts,$800 
B) Increase Uncollectible Accounts Expense $15,000; increase Allowance for Doubtful Accounts,$15,000 
C) Increase Uncollectible Accounts Expense,$14,200; increase Allowance for Doubtful Accounts,$14,200 
D) Increase Uncollectible Accounts Expense,$15,800; increase Allowance for Doubtful Accounts,$15,800

Question 5

Allowance for Doubtful Accounts is a contra liability account.

Accepted Answer

A) True 
 B)False

Question 6

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year,and uncollectible accounts expense is estimated at 1% of net sales.If net sales are $950,000,the amount of the adjustment to record the provision for doubtful accounts is:

Accepted Answer

A) $9,500. 
B) $500. 
C) $8,500. 
D) $9,000. 
A) $9,500. 
B) $500. 
C) $8,500. 
D) $9,000.

Question 7

In reference to a promissory note,the person who is to receive payment is called the:

Accepted Answer

A) maker. 
B) payee. 
C) seller. 
D) payer. 
A) maker. 
B) payee. 
C) seller. 
D) payer.

Question 8

Taxes receivable is classified as:

Accepted Answer

A) other receivable. 
B) notes receivable. 
C) accounts receivable. 
D) trade receivables. 
A) other receivable. 
B) notes receivable. 
C) accounts receivable. 
D) trade receivables.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

A note receivable due in 90 days is listed on the balance sheet under:

Accepted Answer

A) long-term liabilities. 
B) fixed assets. 
C) current liabilities. 
D) current assets. 
A) long-term liabilities. 
B) fixed assets. 
C) current liabilities. 
D) current assets.

Question 11

Inventory turnover is calculated by dividing:

Accepted Answer

A) cost of merchandise sold by average inventory. 
B) amount of total asset by average inventory. 
C) cost of inventory by average inventory. 
D) amount of current assets by average inventory. 
A) cost of merchandise sold by average inventory. 
B) amount of total asset by average inventory. 
C) cost of inventory by average inventory. 
D) amount of current assets by average inventory.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The interest at 6%,on a 60-day note for $5,000 is $300.(Assume 360 days in a year)

Accepted Answer

A) True 
 B)False

Question 14

If merchandise inventory is being valued at cost and the price level is steadily falling,which method of costing will yield the largest gross profit?

Accepted Answer

A) Average cost 
B) LIFO 
C) FIFO 
D) All methods will generate the same gross profit. 
A) Average cost 
B) LIFO 
C) FIFO 
D) All methods will generate the same gross profit.

Question 15

The sum of the face amount and the interest that must be paid at the due date of the note is called maturity value.

Accepted Answer

A) True 
 B)False

Question 16

Allowance for Doubtful Accounts has an unadjusted balance of $400 at the end of the year,and uncollectible accounts expense is estimated at 1% of net sales.If net sales are $300,000,compute the amount of the adjustment to record the provision for doubtful accounts.

Accepted Answer

A) $400. 
B) $3,400. 
C) $3,000. 
D) $2,600. 
A) $400. 
B) $3,400. 
C) $3,000. 
D) $2,600.

Question 17

After the accounts are adjusted and closed at the end of the fiscal year,Accounts Receivable has a balance of $500,000 and Allowance for Doubtful Accounts has a balance of $25,000.What is the net realizable value of the accounts receivable?

Accepted Answer

A) $25,000 
B) $525,000 
C) $500,000 
D) $475,000 
A) $25,000 
B) $525,000 
C) $500,000 
D) $475,000

Question 18

Inventory costing methods place primary emphasis on assumptions about:

Accepted Answer

A) flow of goods. 
B) flow of costs. 
C) flow of goods or costs depending on the method. 
D) flow of values. 
A) flow of goods. 
B) flow of costs. 
C) flow of goods or costs depending on the method. 
D) flow of values.

Question 19

A written promise to pay a sum of money on demand or at a definite time is called a(n):

Accepted Answer

A) letter of credit. 
B) deferred note. 
C) credit memorandum. 
D) promissory note. 
A) letter of credit. 
B) deferred note. 
C) credit memorandum. 
D) promissory note.

Question 20

Beginning inventory,purchases,and sales for Product XCX are as follows:

Accepted Answer

(a)Cost of merchandise sold: 1

The estimate of uncollectible accounts receivable based on the sales method violates the matching principle.

Use the following data to calculate the cost of ending inventory using the LIFO method.

Using the lower-of-cost-or-market method of inventory valuation,what should the total inventory value be for the following items:

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?

Allowance for Doubtful Accounts is a contra liability account.

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year,and uncollectible accounts expense is estimated at 1% of net sales.If net sales are $950,000,the amount of the adjustment to record the provision for doubtful accounts is:

In reference to a promissory note,the person who is to receive payment is called the:

Taxes receivable is classified as:

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

A note receivable due in 90 days is listed on the balance sheet under:

Inventory turnover is calculated by dividing:

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

The interest at 6%,on a 60-day note for $5,000 is $300.(Assume 360 days in a year)

If merchandise inventory is being valued at cost and the price level is steadily falling,which method of costing will yield the largest gross profit?

The sum of the face amount and the interest that must be paid at the due date of the note is called maturity value.

Allowance for Doubtful Accounts has an unadjusted balance of $400 at the end of the year,and uncollectible accounts expense is estimated at 1% of net sales.If net sales are $300,000,compute the amount of the adjustment to record the provision for doubtful accounts.

After the accounts are adjusted and closed at the end of the fiscal year,Accounts Receivable has a balance of $500,000 and Allowance for Doubtful Accounts has a balance of $25,000.What is the net realizable value of the accounts receivable?

Inventory costing methods place primary emphasis on assumptions about:

A written promise to pay a sum of money on demand or at a definite time is called a(n):

Beginning inventory,purchases,and sales for Product XCX are as follows:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 6: Receivables and Inventories

The estimate of uncollectible accounts receivable based on the sales method violates the matching principle.

Use the following data to calculate the cost of ending inventory using the LIFO method.

Using the lower-of-cost-or-market method of inventory valuation,what should the total inventory value be for the following items:

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?

Allowance for Doubtful Accounts is a contra liability account.

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year,and uncollectible accounts expense is estimated at 1% of net sales.If net sales are $950,000,the amount of the adjustment to record the provision for doubtful accounts is:

In reference to a promissory note,the person who is to receive payment is called the:

Taxes receivable is classified as:

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

A note receivable due in 90 days is listed on the balance sheet under:

Inventory turnover is calculated by dividing:

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

The interest at 6%,on a 60-day note for $5,000 is $300.(Assume 360 days in a year)

If merchandise inventory is being valued at cost and the price level is steadily falling,which method of costing will yield the largest gross profit?

The sum of the face amount and the interest that must be paid at the due date of the note is called maturity value.

Allowance for Doubtful Accounts has an unadjusted balance of $400 at the end of the year,and uncollectible accounts expense is estimated at 1% of net sales.If net sales are $300,000,compute the amount of the adjustment to record the provision for doubtful accounts.

After the accounts are adjusted and closed at the end of the fiscal year,Accounts Receivable has a balance of $500,000 and Allowance for Doubtful Accounts has a balance of $25,000.What is the net realizable value of the accounts receivable?

Inventory costing methods place primary emphasis on assumptions about:

A written promise to pay a sum of money on demand or at a definite time is called a(n):

Beginning inventory,purchases,and sales for Product XCX are as follows:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters