Specific identification is a very popular inventory method because it is very easy to
apply.
An organization’s normal capacity is the average annual level of operating capacity
needed to meet its expected sales demand.
The Allowance for Uncollectible Accounts is a contra-asset account.
Which of the following isTRUE of the cash budget?
A.It is prepared first in the master budget.
B.It is also called budgeted balance sheet.
C.It consists of cash receipts and cash payments.
D.It is the base for the preparation of the sales budget.
An effective system of internal control requires that individuals take periodic vacations.
If it takes 30 days to sell inventory, 60 days to collect for the sale, and creditors’ terms
are 10 days, the financing period is 80 days.
Product costs can be found on both the balance sheet and the income statement.
A partnership agreement should include the method of distributing income and loss.
The payback period method of evaluating proposed capital investment does not take
into account the time value of money.
The debtor named in a promissory note is called the payee.
In a limited partnership, the general partner’s liability is unlimited.
Direct costs can be conveniently traced to a cost object.
Copper Company engaged in the following transactions during April
What is the amount of cash still to be collected?
A.$126,000
B.$341,000
C.$144,000
D.$18,000
On March 1, 20×5, Darby Corporation sold 102 of its 9 percent, $1,000 bonds for a
price of 96 plus accrued interest. The accrued interest amounted to $1,000. If a balance
sheet were to be prepared at the end of the day, March 1, 20×5, the carrying value
reported for the bonds payable would be
A.$102,000.
B.$97,920.
C.$98,940.
D.$96,900.
Use this information to answer the following question.
What is the present value of receiving $800 at the end of each year for three years,
assuming an APR of 7 percent?
A.$652.80
B.$1,952.40
C.$2,099.20
D.$2,244.00
All manufacturing costs that are assigned to completed (but unsold) products should be
classified as
A.materials inventory costs.
B.cost of goods sold.
C.work in process inventory costs.
D.finished goods inventory costs.
Extraordinary repairs usually are recorded by making a debit to
A.a capital account.
B.Repair Expense.
C.a contra-asset account.
D.an asset account.
Gomez Company purchases a piece of equipment on Jan. 2, 2014, for $30,000. The
equipment has an estimated life of eight years or 50,000 units of production and an
estimated residual value of $3,000. Lester uses a calendar fiscal year. The entry to
record the amount of depreciation for 2014, using the straight-line method, is
A.debit to Depreciation Expense, 3,750; credit to Cash, 3,750
B.debit to Depreciation Expense, 3,375; credit to Accumulated Depreciation, 3,375
C.debit to Depreciation Expense, 2,500; credit to Accumulated Depreciation, 2,500
D.debit to Accumulated Depreciation, 2,250; credit to Cash, 2,250
Under the perpetual inventory system, the entry to record a purchase return would
include a credit to which account?
A.Merchandise Inventory
B.Purchases Returns and Allowances
C.Accounts Payable
D.Sales
The correct order of the three stages of accounting is
A.communication, processing, and measurement.
B.measurement, communication, and processing.
C.processing, measurement, and communication.
D.measurement, processing, and communication.
The most appropriate place to look for relationships among partners is in the
A.partnership agreement
B.accounting records
C.relevant state law
D.voluntary association
Atwood Company uses a periodic inventory system. During the first quarter of 2014, it
sold 12,000 cases of Product A for $120,000. Facts related to its beginning inventory
and purchases are as follows:
For the quarter ended March 31, 2014, compute the ending inventory, cost of goods
sold, and gross margin under three methods: (a) average-cost, (b) FIFO, and (c) LIFO.
(Show your work.)
Ending Inventory Cost of Goods Sold Gross Margin
a. Average-cost $27,0001 $54,0002 $66,0003
b. FIFO method $28,0004 $53,0005 $67,0006
c. LIFO method $25,0007 $56,0008 $64,0009
Which of the following transactions results in an increase in revenues?
A.Receipt of accounts receivable.
B.Purchase of inventory.
C.Receipt of principal from a bank loan.
D.Delivery of a service in exchange for future payment.
Use this information to answer the following question.
In addition, beginning merchandise inventory was $22,000 and ending merchandise
inventory was $14,000.
Net sales for the period were
A.$305,000.
B.$275,000.
C.$295,000.
D.$215,000.
Days’ payable is the shortest in which of the following industries?
A.Grocery stores
B.Computers
C.Machinery
D.Auto and home supply
Good Sleep Inc. manufactures soft pillows. Its records revealed the following data:
Using the above information provided for Good Sleep, the total overhead cost variance
is
A.$4,000 (F).
B.$5,000 (U).
C.$4,500 (U).
D.$500 (F).
Bonds that contain a provision that allows the holders to exchange the bonds for other
securities of the issuing corporation are called
A.debenture bonds.
B.secured bonds.
C.callable bonds.
D.convertible bonds.
The primary difference between ordinary and extraordinary repairs is that extraordinary
repairs
A.are an expense of the current period.
B.are periodic in nature.
C.are necessary to maintain the asset in good operational condition.
D.extend the useful life or increase the residual value of the asset.
A bond with a face value of $10,000 has a current price quote of 102.62. The price in
dollars and cents is
A.$10,002.62.
B.$10,200.62.
C.$10,026.20.
D.$10,262.00.
Probably the last account to be listed on a post-closing trial balance would be
A.Income Summary.
B.Wages Payable.
C.Owner’s Capital.
D.Wages Expense.