Question 1

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 2

When an account is written off under the allowance method:

Accepted Answer

A)  accounts receivable decreases. 
B)  bad debt expense is increased. 
C)  accounts receivable remains unchanged. 
D)  accounts receivable increases. 
A)  accounts receivable decreases. 
B)  bad debt expense is increased. 
C)  accounts receivable remains unchanged. 
D)  accounts receivable increases.

Question 3

Classify the following as either Current Assets (CA), Investments (I), or both (CA and I).
 $\begin{array}{lr}
\text { Trade Receivables}&(a)\
\text { Note Receivable due in 30 days}&(b)\
\text {Interest Receivable on note clue in 30 days }&(c)\
\text {Note Receivable due in 2 years }&(d)\
\text {Five-year Note Receivable due in a series of equal amulal payments }&(e)\
\end{array}$

Accepted Answer

The answer of Classify the following as either Current Assets...

Question 4

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 5

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 6

When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory costing method is called:

Accepted Answer

A)  first-in, last-out. 
B)  last-in, first-out. 
C)  first-in, first-out. 
D)  average cost. 
A)  first-in, last-out. 
B)  last-in, first-out. 
C)  first-in, first-out. 
D)  average cost.

Question 7

A note receivable due in 18 months is listed on the balance sheet under the caption:

Accepted Answer

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

Question 8

During inflationary periods, the value of inventory that appears on the balance sheet using FIFO method will be same as its current replacement cost.

Accepted Answer

A) True 
 B)False

Question 9

The net realizable value is used for purposes of valuing out of date merchandise in inventory.

Accepted Answer

A) True 
 B)False

Question 10

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 11

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

Accepted Answer

A) True 
 B)False

Question 12

On the basis of the following data related to current assets for Mission Co. at December 2013, prepare a partial balance sheet in good form.
 $\begin{array}{ll}
\$ 100,000 & \text { Cash and cash equivalents } \
50,000 & \text { Notes receivable } \
290,000 & \text { Accounts receivable } \
20,000 & \text { Allowance for doubtful accounts } \
750 & \text { Interest receivable } \
120,000 & \text { Merchandise inventory at lower-of-cost-(first-in, first-out method) or-market }
\end{array}$

Accepted Answer

None

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

What type of account is Allowance for Doubtful Accounts?

Accepted Answer

A)  Contra asset account 
B)  Asset account 
C)  Liability account 
D)  Expense account 
A)  Contra asset account 
B)  Asset account 
C)  Liability account 
D)  Expense account

Question 15

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 16

Other than accounts receivable and notes receivable, name other receivables that might be included on the balance sheet.

Accepted Answer

Interest Receivable,

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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 19

Inventory refers to the:

Accepted Answer

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

Question 20

Calculate the cost of ending inventory using FIFO method. $\begin{array}{lll}
10 \text { units at } \$ 10 \text { each } & \text { Beginning inventory } & 1 / 1 \
40 \text { units at } \$ 12 \text { each } & \text { Purchase } & 2 / 28 \
50 \text { units at } \$ 14 \text { each } & \text { Purchase } & 5 / 10 \
30 \text { units at } \$ 16 \text { each } & \text { Purchase } & 9 / 20 \
50 \text { units } & \text { Encling inventory } & 12 / 31
\end{array}$

Accepted Answer

A)  $800 
B)  $760 
C)  $580 
D)  $500 
A)  $800 
B)  $760 
C)  $580 
D)  $500

Taxes receivable is classified as:

When an account is written off under the allowance method:

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.

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:

When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory costing method is called:

A note receivable due in 18 months is listed on the balance sheet under the caption:

During inflationary periods, the value of inventory that appears on the balance sheet using FIFO method will be same as its current replacement cost.

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

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

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

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

What type of account is Allowance for Doubtful Accounts?

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

Other than accounts receivable and notes receivable, name other receivables that might be included on the balance sheet.

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

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:

Inventory refers to the:

Calculate the cost of ending inventory using FIFO method. 10 units at \ 10 each Beginning inventory 1/1 40 units at \ 12 each Purchase 2/28 50 units at \ 14 each Purchase 5/10 30 units at \ 16 each Purchase 9/20 50 units Encling inventory 12/31

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

Taxes receivable is classified as:

When an account is written off under the allowance method:

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.

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:

When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory costing method is called:

A note receivable due in 18 months is listed on the balance sheet under the caption:

During inflationary periods, the value of inventory that appears on the balance sheet using FIFO method will be same as its current replacement cost.

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

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

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

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

What type of account is Allowance for Doubtful Accounts?

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

Other than accounts receivable and notes receivable, name other receivables that might be included on the balance sheet.

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

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:

Inventory refers to the:

Calculate the cost of ending inventory using FIFO method. 10 units at \ 10 each Beginning inventory 1/1 40 units at \ 12 each Purchase 2/28 50 units at \ 14 each Purchase 5/10 30 units at \ 16 each Purchase 9/20 50 units Encling inventory 12/31

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