Question 1

One of the weaknesses of the direct write-off method is that it:

Accepted Answer

A) understates accounts receivable on the balance sheet. 
B) violates the matching principle. 
C) adjusts allowance account the end of the year. 
D) is based on estimates. 
A) understates accounts receivable on the balance sheet. 
B) violates the matching principle. 
C) adjusts allowance account the end of the year. 
D) is based on estimates.

Question 2

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.

Accepted Answer

A) True 
 B)False

Question 3

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

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 4

Inventory refers to the:

Accepted Answer

A) merchandise held for sale in the normal course of business. 
B) materials sold during the year. 
C) fixed assets purchased to assist the production process. 
D) claims arising from the purchase of raw material. 
A) merchandise held for sale in the normal course of business. 
B) materials sold during the year. 
C) fixed assets purchased to assist the production process. 
D) claims arising from the purchase of raw material.

Question 5

Beginning inventory,purchases and sales data for the month are as follows:

Accepted Answer

(a)FIFO: $648 
(b)LI

Question 6

The inventory costing method that assigns the most recent costs to cost of good sold is:

Accepted Answer

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

Question 7

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

Accepted Answer

(a)Cost of merchandise sold: 2

Question 8

After the accounts are adjusted at the end of the fiscal year,Accounts Receivable has a balance of $430,000 and Allowance for Doubtful Accounts has a balance of $30,000.What is the net realizable value of the receivables?

Accepted Answer

A) $30,000 
B) $460,000 
C) $430,000 
D) $400,000 
A) $30,000 
B) $460,000 
C) $430,000 
D) $400,000

Question 9

Under which method of inventory costing is the cost flow assumed to be in the reverse order in which the expenditures were made?

Accepted Answer

A) Average cost 
B) Last-in,first-out 
C) First-in,first-out 
D) Specific identification method 
A) Average cost 
B) Last-in,first-out 
C) First-in,first-out 
D) Specific identification method

Question 10

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year,and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000.Compute the adjusted balance in the allowance for doubtful accounts?

Accepted Answer

A) $15,000 
B) $14,500 
C) $14,000 
D) $15,500 
A) $15,000 
B) $14,500 
C) $14,000 
D) $15,500

Question 11

The process of a company selling its accounts receivable to another company is referred as:

Accepted Answer

A) discounting. 
B) adjusting. 
C) assignment. 
D) factoring. 
A) discounting. 
B) adjusting. 
C) assignment. 
D) factoring.

Question 12

Receivables are usually a significant portion of:

Accepted Answer

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

Question 13

The due date of a 60-day note dated July 10 is September 9.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

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

Question 15

The FIFO method of costing inventory is based on the assumption that costs should be charged against revenues in the order in which they were incurred.

Accepted Answer

A) True 
 B)False

Question 16

The net realizable value is used for purposes of valuing out of date merchandise in inventory.

Accepted Answer

A) True 
 B)False

Question 17

Use the following data to calculate the cost of ending inventory under average cost method.

Accepted Answer

A) $992 
B) $400 
C) $875 
D) $700 
A) $992 
B) $400 
C) $875 
D) $700

Question 18

The inventory costing method that considers the ending inventory to be composed of units of the merchandise acquired earliest is called:

Accepted Answer

A) first-in,first-out. 
B) highest-in,first-out. 
C) lowest-in,first-out. 
D) last-in,first-out. 
A) first-in,first-out. 
B) highest-in,first-out. 
C) lowest-in,first-out. 
D) last-in,first-out.

Question 19

When companies sell their receivables to other companies,the transaction is called factoring.

Accepted Answer

A) True 
 B)False

Question 20

A note receivable due in five years is listed on the balance sheet under the caption:

Accepted Answer

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

One of the weaknesses of the direct write-off method is that it:

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.

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

Inventory refers to the:

Beginning inventory,purchases and sales data for the month are as follows:

The inventory costing method that assigns the most recent costs to cost of good sold is:

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

After the accounts are adjusted at the end of the fiscal year,Accounts Receivable has a balance of $430,000 and Allowance for Doubtful Accounts has a balance of $30,000.What is the net realizable value of the receivables?

Under which method of inventory costing is the cost flow assumed to be in the reverse order in which the expenditures were made?

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year,and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000.Compute the adjusted balance in the allowance for doubtful accounts?

The process of a company selling its accounts receivable to another company is referred as:

Receivables are usually a significant portion of:

The due date of a 60-day note dated July 10 is September 9.

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

The FIFO method of costing inventory is based on the assumption that costs should be charged against revenues in the order in which they were incurred.

The net realizable value is used for purposes of valuing out of date merchandise in inventory.

Use the following data to calculate the cost of ending inventory under average cost method.

The inventory costing method that considers the ending inventory to be composed of units of the merchandise acquired earliest is called:

When companies sell their receivables to other companies,the transaction is called factoring.

A note receivable due in five years is listed on the balance sheet under the caption:

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

One of the weaknesses of the direct write-off method is that it:

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.

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

Inventory refers to the:

Beginning inventory,purchases and sales data for the month are as follows:

The inventory costing method that assigns the most recent costs to cost of good sold is:

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

After the accounts are adjusted at the end of the fiscal year,Accounts Receivable has a balance of $430,000 and Allowance for Doubtful Accounts has a balance of $30,000.What is the net realizable value of the receivables?

Under which method of inventory costing is the cost flow assumed to be in the reverse order in which the expenditures were made?

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year,and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000.Compute the adjusted balance in the allowance for doubtful accounts?

The process of a company selling its accounts receivable to another company is referred as:

Receivables are usually a significant portion of:

The due date of a 60-day note dated July 10 is September 9.

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

The FIFO method of costing inventory is based on the assumption that costs should be charged against revenues in the order in which they were incurred.

The net realizable value is used for purposes of valuing out of date merchandise in inventory.

Use the following data to calculate the cost of ending inventory under average cost method.

The inventory costing method that considers the ending inventory to be composed of units of the merchandise acquired earliest is called:

When companies sell their receivables to other companies,the transaction is called factoring.

A note receivable due in five years is listed on the balance sheet under the caption:

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