Exam 6: Receivables and Inventories

Of the three widely used inventory costing methods (FIFO,LIFO,and average),the FIFO method of costing inventory is based on the assumption that costs are charged against revenues in the order in which they were incurred.

Prepare the Current Assets section of a balance sheet using some or all of the following accounts:

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

During deflationary periods,the use of the LIFO method of costing inventory will result in a greater amount of net income than would result from the use of the FIFO method of inventory costing.

What type of account is Allowance for Doubtful Accounts?

Allowance for Doubtful Accounts has an unadjusted balance of $1,100 at the end of the year,and an analysis of customers' accounts indicates doubtful accounts of $12,900.Which of the following records the proper provision for doubtful accounts?

All receivables that are expected to be realized in cash within a year are presented in the current assets section of the balance sheet.

In reference to a promissory note,the person who makes the promise to pay is called the:

Indicate the section of the balance sheet (current assets,fixed assets,investments,current liabilities,long-term liabilities,stockholders' equity)in which each of the following is reported: (a) Note receivable due in 3 years (b) Note receivable due in 90 days (c) Allowance for doubtful accounts

Allowance for Doubtful Accounts is listed on the balance sheet under the caption:

The accounts receivable turnover is computed by dividing:

The due date of a 90-day note dated July 5 is:

The balance of the allowance for doubtful accounts is added to accounts receivable on the balance sheet.

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.

A 90-day,10% note for $10,000 dated April 1 is received from a customer on account.The face value of the note is:

Inventories of merchandising and manufacturing businesses are reported as current assets on the balance sheet.

Both accounts receivable and notes receivable represent claims that are expected to be collected in cash.

At the end of a period before the accounts are adjusted,Allowance for Doubtful Accounts has a balance of $250,and net sales on account for the period total $500,000.If uncollectible accounts expense is estimated at 1% of net sales on account,the current provision to be made for uncollectible accounts expense is $4,997.50.

When an account is written off under the allowance method:

Calculate the cost of ending inventory using FIFO method.