Q1. Allowance for Doubtful Accounts is a contra-equityaccount. a. true b. false
Q2. After the accounts are adjusted and closed at the endof the fiscal year, Accounts Receivable has a balance of $430,000and Allowance for Doubtful Accounts has a balance of $30,000. Whatis the net realizable value of the accountsreceivable? a. $30,000 b. $460,000 c. $430,000 d. $400,000
Q3. One of the weaknesses of the direct write-off method isthat it a. understates accounts receivable on thebalance sheet. b. violates the matching principle. c. is too difficult to use for manycompanies. d. is based on estimates.
Q4. During deflationary periods, the use of the LIFO methodof costing inventory will result in a greater amount of net incomethan would result from the use of the FIFO method. a. true b. false
Q5. Calculate the cost of ending inventory using FIFOinventory cost method.
1/1
Beginning inventory
10 units @ $10 per unit
2/28
Purchases
40 units @ $12 per unit
5/10
Purchases
50 units @ $14 per unit
9/20
Purchases
30 units @ $16 per unit
12/31
Ending inventory
50 units
a. $800 b. $760 c. $580 d. $500
Q6. The inventory data for an item for Novemberare:
Nov. 1
Inventory
25 units at $20
Nov. 10
Purchased
30 units at $21
Nov. 30
Purchased
10 units at $22
Nov. 30
Sold
35 units
Using the first-in, first-out method, what is the cost of themerchandise inventory of 30 units on November 30? a. $640 b. $605 c. $623 d. $660
Q7. Under which method of inventory cost flows is the costflow assumed to be in the reverse order in which the expenditureswere made? a. Average cost b. Last-in, first-out c. First-in, first-out d. Last-in, last-out
Q8. The maturity value of a 12%, 60-day note for $5,000 is$5,100. a. true b. false
Q9. The person who is to be paid when a note matures iscalled the payee. a. true b. false
Q10. If merchandise inventory is being valued at cost andthe price level is steadily rising, the method of costing that willyield the highest net income is a. average cost. b. LIFO. c. FIFO. d. All methods will generate the same netincome.
Q11. The Accumulated Depreciation account is deducted fromthe cost of fixed assets on the balance sheet. a. true b. false
Q12. If a fixed asset with an original cost of $18,000 andaccumulated depreciation of $2,000 is sold for $15,000, the companymust a. recognize a loss on the income statementunder other expenses. b. recognize a loss on the income statementunder operating expenses. c. recognize a gain on the income statementunder other revenues. d. Gains and losses are not to berecognized upon the sell of fixed assets.
Q13. A fixed asset with a cost of $30,000 and accumulateddepreciation of $25,000 is sold for $3,500. What is the amount ofthe gain or loss on disposal of the fixed asset? a. $2,500 loss b. $1,500 loss c. $2,500 gain d. $1,500 gain
Q14. The cost of a patent should beamortized a. over 20 years. b. over its economic life. c. over 20 years or its economic life,whichever is shorter. d. only if an impairment occurs.
Q15. Goodwill is a. amortized similar to otherintangibles. b. only written down if an impairment invalue occurs. c. charged to expense immediately. d. amortized over 40 years or its economiclife, whichever is shorter.
Q16. Depreciable cost equals a. cost less accumulateddepreciation. b. book value less residual value. c. cost less residual value. d. market value less residual value.
Q17. The process of transferring the cost of metal ores andother minerals removed from the earth to an expense account iscalled a. depletion. b. deferral. c. amortization. d. depreciation.
Q18. The double-declining-balance method of depreciation isreferred to as an accelerated method. a. true b. false
Q19. A capital expenditure would appear onthe a. income statement under operatingexpenses. b. balance sheet under fixed assets. c. balance sheet under currentassets. d. income statement under otherexpenses.
Q20. The acquisition costs of property, plant, andequipment should include all normal, reasonable, and necessarycosts to get the asset in place and ready for use. a. true b. false
Q21. The charter of a corporation provides for the issuanceof 100,000 shares of common stock. Assume that 75,000 shares wereoriginally issued and 5,000 were subsequently reacquired. What isthe number of shares outstanding? a. 10,000 b. 70,000 c. 50,000 d. 60,000
Q22. When the contract rate of interest on bonds is higherthan the market rate of interest, the bonds sell at a. a premium. b. their face value. c. their maturity value. d. a discount.
Q23. One of the prerequisites required to pay a cashdividend is formal action by the board of directors. a. true b. false
Q24. The total earnings of an employee for a payroll periodare referred to as a. take-home pay. b. pay net of taxes. c. net pay. d. gross pay.
Q25. The liability for a dividend is recorded on which ofthe following dates? a. The date of record b. The date of payment c. The date of announcement d. The date of declaration
Q26. Most employers are levied a tax on payrollsfor a. sales tax. b. medical insurance premiums. c. federal unemployment compensationtax. d. union dues.
Q27. A corporation has 50,000 shares of $100 par valuestock outstanding that has a current market value of $180. If thecorporation issues a 4-for-1 stock split, the market value of thestock will fall to approximately a. $30. b. $36. c. $45. d. $50.
Q28. The charter of a corporation provides for the issuanceof 100,000 shares of common stock. Assume that 60,000 shares wereoriginally issued and 5,000 were subsequently reacquired. What isthe number of shares outstanding? a. 5,000 b. 100,000 c. 60,000 d. 55,000
Q29. The total earnings of an employee for a payroll periodis referred to as gross pay. a. true b. false
Q30. If 50,000 shares are authorized, 37,000 shares areissued, and 2,000 shares are reacquired, the number of outstandingshares is 35,000. a. true b. false
Q31. Interpreting financial analysis should be consideredin light of conditions peculiar to the industry and the generaleconomic conditions. a. true b. false
Q32. Based on the following data for the current year, whatis the inventory turnover?
Net sales on account during year
$ 500,000
Cost of merchandise sold during year
300,000
Accounts receivable, beginning of year
45,000
Accounts receivable, end of year
35,000
Inventory, beginning of year
90,000
Inventory, end of year
110,000
a. 3.0 b. 2.7 c. 4.0 d. 3.3
Q33. The ratio of the sum of cash, receivables, andmarketable securities to current liabilities is calledthe a. price-earnings ratio. b. earnings ratio. c. quick ratio. d. current ratio.
Q34. The percentage analysis of increases and decreases incorresponding items in comparative financial statements is referredto as horizontal analysis. a. true b. false
Q35. A company with working capital of $500,000 and acurrent ratio of 2.25 pays a $100,000 short-term liability. Theamount of working capital immediately after paymentis a. $600,000. b. $400,000. c. $500,000. d. $100,000.
Q36. The percentage analysis of increases and decreases incorresponding items in comparative financial statements is referredto as vertical analysis. a. true b. false
Q37. The percent of fixed assets to total assets is anexample of a. vertical analysis. b. solvency analysis. c. profitability analysis. d. horizontal analysis.
Q38. Based on the following data for the current year, whatis the accounts receivable turnover?
Net sales on account during year
$ 500,000
Cost of merchandise sold during year
300,000
Accounts receivable, beginning of year
45,000
Accounts receivable, end of year
35,000
Inventory, beginning of year
90,000
Inventory, end of year
110,000
a. 12.5 b. 14.3 c. 11.1 d. 7.5
Q39. The purpose of an audit is to a. determine whether or not a company is agood investment. b. render an opinion on the fairness of thestatements. c. determine whether or not a companycomplies with income tax regulations. d. determine whether or not a company is agood credit risk.
Q40. Based on the following data, what is the amount ofquick assets?
Accounts payable
$ 32,000
Accounts receivable
56,000
Accrued liabilities
7,000
Cash
20,000
Intangible assets
40,000
Inventory
72,000
Long-term investments
100,000
Long-term liabilities
75,000
Marketable securities
40,000
Notes payable (short-term)
20,000
Property, plant, and equipment
625,000
Supplies
2,000
a. $228,000 b. $188,000 c. $116,000 d. $114,000
Q41. At the end of the year, overhead applied was$35,000,000. Actual overhead was $35,800,000. Closing over/underapplied overhead into cost of goods sold would cause net incometo a. increase by $800,000. b. decrease by $800,000. c. stay the same. d. decrease by $200,000.
Q42. Perpetual inventory controlling accounts andsubsidiary ledgers are maintained for materials, work in process,and finished goods in cost accounting systems. a. true b. false
Q43. For which of the following businesses would theprocess cost system be appropriate? a. Custom cabinet manufacturer b. Dress designer c. Lumber mill d. Printing firm
Q44. Recording direct labor costs in a job order costaccounting system a. increases Factory Overhead, decreasesWork in Process. b. increases Finished Goods, increasesWages Payable. c. increases Work in Process, increasesWages Payable. d. increases Factory Overhead, increasesWages Payable.
Q45. Materials are transferred from the storeroom to thefactory in response to materials requisitions. a. true b. false
Q46. A manufacturing business converts materials intofinished products through the use of machinery andlabor. a. true b. false
Q47. Each account in the work in process subsidiary ledgeris called a a. finished goods sheet. b. stock record. c. materials requisition. d. job cost sheet.
Q48. Just-in-time processing is a business philosophy thatfocuses on reducing time and cost and eliminating poor quality. Oneof the ways in which this is accomplished in manufacturing andnonmanufacturing processes is by: a. moving a product from process to processas each function is completed. b. combining processing functions into workcenters and cross-training workers to perform more than onefunction. c. having production supervisors attempt toenter enough materials into manufacturing to keep all manufacturingdepartments operating. d. having workers typically perform onefunction on a continuous basis.
Q49. The following information is available for the firstmonth of operations for Crawford, Inc.:
Sales
$570,000
Gross profit
210,000
Indirect labor
20,000
Indirect materials
9,000
Other factory overhead
7,500
Materials purchased
250,000
Total manufacturing costs
420,000
Materials inventory, end of period
10,000
Calculate cost of goods sold for Crawford, Inc. a. $420,000 b. $370,000 c. $360,000 d. $276,500
Q50. The cost of wages paid to employees directly involvedin the manufacturing process in converting materials into finishedproduct is classified as a. factory overhead cost. b. direct labor cost. c. wages expense. d. direct materials cost.
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
