question

Kern Company sells merchandise on account for $6,000 to Block Company with credit terms of 2/10, n/30. Block Company returns $1,200 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

answer

$4,704

question

When a seller grants credit for returned goods, the account that is credited is

answer

Accounts Receivable.

question

In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of

answer

sales revenue

question

Arquette Company's financial information is presented below. Sales $ ???? Cost of Goods Sold $ 270,000 Sales Returns and Allowances 20,000 Gross Profit ???? Net Sales 450,000 The missing amounts above are: Sales Gross Profit

answer

$470,000 $180,000

question

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company.

answer

operating expenses

question

Romanoff Industries had the following inventory transactions occur during 2013: Units Cost/unit 2/1/13 Purchase 18 $45 3/14/13 Purchase 31 $47 5/1/13 Purchase 22 $49 The company sold 50 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using FIFO? (rounded to whole dollars)

answer

$829

question

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using

answer

FIFO will have the highest ending inventory.

question

In periods of inflation, phantom or paper profits may be reported as a result of using the

answer

FIFO costing assumption.

question

The manager of Brick Company is given a bonus based on income before income taxes. Net income, after taxes, is $5,600 for FIFO and $4,900 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

answer

$200

question

The lower-of-cost-or-market basis of valuing inventories is an example of

answer

conservatism

question

Which one of the following is not necessarily a party to a check?

answer

...

question

A deposit made by a company will appear on the bank statement as a

answer

credit

question

The cash account shows a balance of $45,000 before reconciliation. The bank statement does not include a deposit of $2,500 made on the last day of the month. The bank statement shows a collection by the bank of $1,200 and a customer's check for $320 was returned because it was NSF. A customer's check for $450 was recorded on the books as $540, and a check written for $69 was recorded as $96. The correct balance in the cash account was

answer

$45817

question

In preparing its August 31, 2013 bank reconciliation, Annie Corp. has available the following information: Balance per bank statement, 8/31/13 $21,650 Deposit in transit, 8/31/13 3,900 Return of customer's check not sufficient funds, 8/30/13 600 Outstanding checks, 8/31/13 2,750 Bank service charges for August 100 At August 31, 2013, Annie's adjusted cash balance is

answer

$22800

question

A bank reconciliation should be prepared

answer

to explain any difference between the depositor's balance per books and the balance per bank

question

Using the following information: 12/31/12 Accounts receivable $ 525,000 Allowance (35,000 ) Cash realizable value $ 490,000 During 2013, sales on account were $145,000 and collections on account were $100,000. Also during 2013, the company wrote off $8,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at $40,000. Bad debts expense for 2013 is

answer

...

question

An analysis and aging of the accounts receivable of Hugh Company at December 31 revealed the following data: Accounts Receivable................................................... $ 800,000 Allowance for Doubtful Accounts per books before adjustment (Cr.)............................................ 50,000 Amounts expected to become uncollectible.................... 56,000 The cash realizable value of the accounts receivable at December 31, after adjustment, is:

answer

$744000

question

XYZ Company accepted a national credit card for a $3,000 purchase. The cost of the goods sold is $1,800. The credit card company charges a 3% fee. What is the impact of this transaction on net operating income?

answer

increased by $1110

question

A 30-day note dated May 18 has a maturity date of

answer

june 17

question

The interest on a $10,000, 10%, 1-year note receivable is

answer

$1000

question

When the terms of sale are FOB shipping point, ownership of the goods remains with the seller until the goods reach the buyer.

answer

false

question

The FIFO method assumes that the earliest goods purchased are the first to be sold.

answer

true

question

In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the

answer

FIFO method

question

The lower of cost or market basis of valuing inventories is an example of

answer

conservatism.

question

Understating beginning inventory will understate

answer

costs of goods sold

question

Inventory turnover is calculated by dividing cost of goods sold by

answer

average inventory

question

The results under FIFO in a perpetual system are the same as in a periodic system.

answer

true

question

A new average cost is computed each time a purchase is made in the

answer

moving-average cost method

question

The gross profit method can be used for all of the following reasons except

answer

preparation of annual financial statements.

question

Baylor Inc. has a gross profit rate of 45%. During the period, the company had net sales of $400,000 and goods available for sale of $260,000. Beginning inventory was $35,000. Compute the dollar amount of the ending inventory.

answer

$40000

question

Stine Company purchased merchandise with an invoice price of $2,000 and credit terms of 1/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit terms?

answer

18%

question

In a perpetual inventory system, the Cost of Goods Sold account is used

answer

whenever there is a sale of merchandise or a return of merchandise sold

question

In preparing closing entries for a merchandiser, the Income Summary account will be credited for the balance of

answer

sales revenue

question

A multiple-step income statement distinguishes between operating and non-operating activities.

answer

true

question

All of the following are contra revenue accounts except

answer

sales revenue

question

Under a periodic system, the company uses separate accounts to record freight costs, returns, and discounts.

answer

true

question

Cost of goods available for sale is computed by adding

answer

beginning inventory to the cost of goods purchased.

question

There are more steps involved in preparing a worksheet for a merchandising company than for a service company.

answer

false

question

Which of the following accounts will appear in the trial balance of a merchandising company but not a service company?

answer

inventory

question

In a perpetual inventory system, a company determines the cost of goods sold each time a sale occurs.

answer

true

question

The Sarbanes-Oxley Act requires that all major U.S. corporations

answer

maintain an adequate system of internal control.

question

Few internal control systems provide for independent internal verification.

answer

false

question

Allowing only designated personnel to handle cash receipts is an example of

answer

establishment of responsibility.

question

An internal auditor reconciling the bank statement monthly is an example of

answer

independent internal verification.

question

A credit balance in Cash Over and Short is reported as a (n)

answer

misc. revenue

question

A bank issues a debit memorandum when it collects a note receivable for a depositor.

answer

false

question

The lack of agreement between the bank balance and the book balance is due to time lags and errors.

answer

true

question

A company records each reconciling item used to determine the adjusted cash balance per books.

answer

true

question

Cash equivalents include each of the following except

answer

petty cash

question

Restricted cash expected to be used within the next year should be

answer

reported as a current asset

question

Interest is usually associated with

answer

notes receivable.

question

Which of the following would require a compound journal entry?

answer

To record collection of accounts receivable when a cash discount is taken.

question

If a company fails to record estimated bad debts expense,

answer

expenses are understated.

question

A 60-day note receivable dated April 13 has a maturity date of

answer

june 12

question

In a promissory note, the party making the promise to pay is called the maker.

answer

true

question

When a note is accepted to settle an open account, Note Receivable is debited for the note's

answer

face value.

question

Short-term notes receivable

answer

use the same estimations and computations as accounts receivable to determine cash realizable value.

question

When a note receivable is dishonored,

answer

accounts receivable is debited if eventual collection is expected.

question

The average collection period is computed by dividing

answer

365 days by the accounts receivable turnover ratio

question

The accounts receivable turnover ratio is computed by dividing

answer

net credit sales by average net accounts receivable

question

5.1A

answer

1. inventory >> accts pay 3. accts pay >> sales rev costs of goods sold >>inventory 9. accts pay >>inventory >>cash 12. cash sales discount >> accts rec 17. accts rec >>sales rev costs of goods sold >>inventory 18. inventory >>accts pay inventory >>cash 20. accts pay >>inventory 21. cash sales >> accts rec 22. accts rec >>sales rev costs of goods sold >> inventory 30. accts pay >> cash 31. sales returns >>accts rec inventory >>costs of goods sold

question

fifo

answer

first in first out

question

lifo

answer

last in first out

question

average cost

answer

is the total added and divided by the quantity

question

7.4a (bank rec)

answer

cash per bank add: deposits less: outstanding checks adjusted total per bank cash per books add: notes payable less: nsf, errors on checks, errors on deposits adjusted total per books journal entries: (notes payable interest less fee) cash misc. ex >>notes rec >> interest rev (nsf) accts rec >> cash (error in check) accts pay >>cash (error in deposit) accts rec >>cash

question

8.3A

answer

journal entries: bad debt >>allow of da allow of da >>accts rec accts rec >>allow of da cash >>accts rec adjusting entries: bad debt(debit) allow of da balance - -- - adjusting- credit adjusting debit adjusting credit

acct. ch 5-8 quizzes – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards