1) The form of the balance sheet in which assets, liabilities, and owner’s equity are
presented in a downward sequence is called the report form.
2) The specific identification inventory method should be used when the inventory
consists of identical, low cost units that are purchased and sold frequently.
3) Multiple production department factory overhead rates are most useful when
production departments differ in their manufacturing processes.
4) Depositing all cash, checks, etc. in a bank and paying with checks is an internal
control procedure over cash.
5) If a business issued bonds payable in exchange for land, the transaction would be
reported in a separate schedule on the statement of cash flows.
6) Under the LIFO inventory costing method, the most recent costs are assigned to
ending inventory.
7) The accounts Purchases, Purchases Returns and Allowances, Purchases Discounts,
and Freight In are found on the balance sheet.
8) A process-oriented layout segments production facilities into functional departments.
9) Supervisor salaries, maintenance, and indirect factory wages would normally appear
in the operating expenses budget.
10) The seller may prepay the freight costs even though the terms are FOB shipping
point.
11) For a period during which the quantity of product manufactured was less than the
quantity sold, income from operations reported under absorption costing will be smaller
than income from operations reported under variable costing.
12) Capital expenditures are costs that are charged to Stockholders’ Equity accounts.
13) During the first year of operations, employees earned vacation pay of $35,000. The
vacations will be taken during the second year. The vacation pay expense should be
recorded in the second year as the vacations are taken by the employees.
14) In a just-in-time (JIT) system, the work in process and raw materials inventory
accounts are combined.
15) The computations involved in the net present value method of analyzing capital
investment proposals are less involved than those for the average rate of return method.
16) On June 30th (the end of the period) Brown Company has a credit balance of
$2,275 in Allowance for Doubtful Accounts. An evaluation of accounts receivable
indicates that the proper balance should be $30,025. Journalize the appropriate
adjusting entry.
17) A company reports the following:
Determine the ratio of net sales to total assets. Round your answer to one decimal place.
18) The Mountain Springs Water Company has two departments, Purifying and
Bottling. The Bottling Department had 8,000 liters in beginning work in process
inventory (60% complete). During the period 70,000 liters were completed. The ending
work in process was 3,000 liters (60% completed). What are the total equivalent units
for direct materials under the FIFO method if materials were added at the beginning of
the process?
19) On February 1 of the current year, Motor, Inc. issued 700 shares of $2 par common
stock to an attorney in return for preparing and filing the Articles of Incorporation. The
value of the services is $9,600. Journalize this transaction.
20) Complete the following data taken from the condensed income statements for
merchandising Companies X, Y, & Z.
21) Magnus Industries has the following data:
Show how you would calculate Raw Materials Used.