Question 1

Using the first-in,first-out method,what is the cost of the merchandise inventory of 30 units on November 30?

Accepted Answer

A) $640 
B) $660 
C) $700 
D) $600 
A) $640 
B) $660 
C) $700 
D) $600

Question 2

A 60-day,12% note for $15,000 dated May 1 is received from a customer on account.The maturity value of the note is (Assume 360 days in a year):

Accepted Answer

A) $15,300. 
B) $15,000. 
C) $14,700. 
D) $16,800. 
A) $15,300. 
B) $15,000. 
C) $14,700. 
D) $16,800.

Question 3

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases:
(a)	Balance of $3,000 in the allowance account just prior to adjustment. Analysis of accounts receivable indicates doubtful accounts of $25,000.
(b)	Balance of $500 in the allowance account just prior to adjustment. Uncollectibles are estimated at 2% of sales, which totaled $800,000 for the year.

Accepted Answer

(a)$22,000

Question 4

If the cost of an item of inventory is $60 and the current replacement cost is $65,the amount included in inventory according to the lower-of-cost-or market method is:

Accepted Answer

A) $5. 
B) $60. 
C) $65. 
D) $125. 
A) $5. 
B) $60. 
C) $65. 
D) $125.

Question 5

A 90-day,8% note for $10,000 dated May 1 is received from a customer on account.The maturity value of the note is (Assume 360 days in a year):

Accepted Answer

A) $10,000. 
B) $10,800. 
C) $10,200. 
D) $9,800. 
A) $10,000. 
B) $10,800. 
C) $10,200. 
D) $9,800.

Question 6

The difference between the total receivables and the balance in Allowance for Doubtful Accounts at the end of a period is referred to as the net realizable value of the receivables.

Accepted Answer

A) True 
 B)False

Question 7

The units of Product YY2 available for sale during the year were as follows:
 
There are 15 units of the product in the physical inventory at March 31. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems.

Accepted Answer

The answer of The units of Product YY2 available for...

Question 8

Merchandise inventory is reported on the balance sheet in the section entitled:

Accepted Answer

A) current assets. 
B) fixed assets. 
C) current liabilities. 
D) stockholders' equity. 
A) current assets. 
B) fixed assets. 
C) current liabilities. 
D) stockholders' equity.

Question 9

The two most widely used methods for determining the cost of inventory are:

Accepted Answer

A) FIFO and LIFO. 
B) FIFO and average cost. 
C) LIFO and average cost. 
D) specific identification and average cost. 
A) FIFO and LIFO. 
B) FIFO and average cost. 
C) LIFO and average cost. 
D) specific identification and average cost.

Question 10

Receivables not expected to be collected within one year are reported in the fixed assets section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

The due date of a 90-day note dated July 15 is October 13.(Assume 360 days in a year)

Accepted Answer

A) True 
 B)False

Question 13

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:

Accepted Answer

A) average cost. 
B) LIFO. 
C) FIFO. 
D) All methods will generate the same net income. 
A) average cost. 
B) LIFO. 
C) FIFO. 
D) All methods will generate the same net income.

Question 14

The two methods of accounting for uncollectible receivables are the:

Accepted Answer

A) direct method and the indirect method. 
B) allowance method and the direct write-off method. 
C) cash method and the accrual method. 
D) percent of sales method and the analysis of receivables method. 
A) direct method and the indirect method. 
B) allowance method and the direct write-off method. 
C) cash method and the accrual method. 
D) percent of sales method and the analysis of receivables method.

Question 15

Generally accepted accounting principles do not normally allow the use of the allowance method of accounting for uncollectible accounts.

Accepted Answer

A) True 
 B)False

Question 16

The presentation of net accounts receivable on the balance sheet will be most accurate under the:

Accepted Answer

A) direct write-off method. 
B) cash basis accounting. 
C) estimate based on analysis of receivables. 
D) allowance method. 
A) direct write-off method. 
B) cash basis accounting. 
C) estimate based on analysis of receivables. 
D) allowance method.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Credit purchase is taken into account while calculating accounts receivable turnover ratio.

Accepted Answer

A) True 
 B)False

Question 19

Average cost is a method of inventory valuation.

Accepted Answer

A) True 
 B)False

Question 20

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?

Accepted Answer

A) 1.1 
B) 3.4 
C) 1.3 
D) 4.5 
A) 1.1 
B) 3.4 
C) 1.3 
D) 4.5

Using the first-in,first-out method,what is the cost of the merchandise inventory of 30 units on November 30?

A 60-day,12% note for $15,000 dated May 1 is received from a customer on account.The maturity value of the note is (Assume 360 days in a year):

If the cost of an item of inventory is $60 and the current replacement cost is $65,the amount included in inventory according to the lower-of-cost-or market method is:

A 90-day,8% note for $10,000 dated May 1 is received from a customer on account.The maturity value of the note is (Assume 360 days in a year):

The difference between the total receivables and the balance in Allowance for Doubtful Accounts at the end of a period is referred to as the net realizable value of the receivables.

The units of Product YY2 available for sale during the year were as follows: There are 15 units of the product in the physical inventory at March 31. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems.

Merchandise inventory is reported on the balance sheet in the section entitled:

The two most widely used methods for determining the cost of inventory are:

Receivables not expected to be collected within one year are reported in the fixed assets section of the balance sheet.

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

The due date of a 90-day note dated July 15 is October 13.(Assume 360 days in a year)

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:

The two methods of accounting for uncollectible receivables are the:

Generally accepted accounting principles do not normally allow the use of the allowance method of accounting for uncollectible accounts.

The presentation of net accounts receivable on the balance sheet will be most accurate under the:

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

Credit purchase is taken into account while calculating accounts receivable turnover ratio.

Average cost is a method of inventory valuation.

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 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

Exam 6: Receivables and Inventories

Using the first-in,first-out method,what is the cost of the merchandise inventory of 30 units on November 30?

A 60-day,12% note for $15,000 dated May 1 is received from a customer on account.The maturity value of the note is (Assume 360 days in a year):

If the cost of an item of inventory is $60 and the current replacement cost is $65,the amount included in inventory according to the lower-of-cost-or market method is:

A 90-day,8% note for $10,000 dated May 1 is received from a customer on account.The maturity value of the note is (Assume 360 days in a year):

The difference between the total receivables and the balance in Allowance for Doubtful Accounts at the end of a period is referred to as the net realizable value of the receivables.

The units of Product YY2 available for sale during the year were as follows: There are 15 units of the product in the physical inventory at March 31. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems.

Merchandise inventory is reported on the balance sheet in the section entitled:

The two most widely used methods for determining the cost of inventory are:

Receivables not expected to be collected within one year are reported in the fixed assets section of the balance sheet.

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

The due date of a 90-day note dated July 15 is October 13.(Assume 360 days in a year)

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:

The two methods of accounting for uncollectible receivables are the:

Generally accepted accounting principles do not normally allow the use of the allowance method of accounting for uncollectible accounts.

The presentation of net accounts receivable on the balance sheet will be most accurate under the:

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

Credit purchase is taken into account while calculating accounts receivable turnover ratio.

Average cost is a method of inventory valuation.

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 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