Question

In: Accounting

1. which of these indicates an improvement in the management of accounts receivable? a. an extension...

1. which of these indicates an improvement in the management of accounts receivable?
a. an extension of the time taken to collect debts to beyond the normal credit period
b. a increase I'm the average collection time for accounts receivable
c. a change in the average collection period from 36 to 39 days
d. a chnage in the number of times debtors are turned over per year from 10.29 times to 11.61 times

2. which of these is not included in the cost of inventory as defined by ias.102?
a. cost of purchase
b. costs incurred in bring the inventory to its present location and condition
c. gst
d. import duties

3. a major theoretical problem in accounting for inventory is:
a. calculating the costs of purchases
b. allocating costs between costs of sale and stock on hand
c. counting the stock
d. deciding which goods are obsolete

4. which of the following is a disadvantage to business to the lifo method of applying costs to inventory?
a. current income is matched with the most recent costs of acquiring goods
b. it understates the balance sheet value for inventory
c. it is difficult for a computer program to apply the method
d. if it is allowed for tax purposes, in times of rising prices it may result in less tax being paid in the current period

5. if inventory costs are declining, profit will be highest if the inventory method used is:
a. weighted average
b. fifo
c. lifo
d. not possible to answer the question

Expert Solution

1) Improvement in the management of account receivable is the increment of ratio of debtors turnover which has increased from 10.29 times to 11.61 times. because it measures the effectiveness in collecting the receivables by the company.

Increasing average collection time is not an improvement also extension of the time taken to collect debt is a disadvantages for the business and increase in average collection period is also not good for the business.

Therefore the correct option is D

2) As per the standard cost which is not to be included in the inventory is the GST amount as all other cost are to be included in the inventory . Duties cost of purchase and cost incurred in bringing the inventory to the present location to be included in the cost of inventory.

Therefore the correct option is C

3) A major theoretical problem in accounting for inventory is to allocate the cost between the cost of sale and stock on hand that is inventory at the end of the year. This accounting is done on the total units sold and total units left in the inventory at the end of the year. Rest all options can be easily done either by the management or the accountant.

Therefore the correct option is B

4) Under LIFO method goods purchased last are sold first. Therefore the ending inventory under this method will be the purchase which has been done in the beginning along with the opening inventory. Usually the cost of goods increases during the year and therefore the inventory shown under this method will be at a lower cost and thus understated the balance sheet value for inventory.

Therefore the correct option is B

5) If the inventory cost are declining and profit will be highest if LIFO inventory method is used as the cost of goods sold under this method will be the lowest because of the declining in inventory cost and hence giving us higher profit.

Therefore the correct option is C

If you find the answer helpful please upvote.

ekkarill92 answered 2 years ago

Accounts Receivable The following table indicates the historical breakout of accounts receivable Days Current 30 to...

Accounts Receivable The following table indicates the historical breakout of accounts receivable Days Current 30 to 60 60 to 90 Over 90 Percent of Balance 50% 30% 15% 5% Percent Collectible 95% 90% 80% 60% The company uses the gross method of recording all sales on accounts. Marketable Securities The interest rate earned on marketable securities is 6.0%. Inventory In 20x2, the company had used the gross method to record inventory purchases on account. As of January 1, 20x3, the...

1 Accounts receivable is classified as a tangible fixed asset 2) Accounts receivable is a current...

1 ______ Accounts receivable is classified as a tangible fixed asset 2) ______ Accounts receivable is a current asset 3. _____ Amount due from a customer that is past due is a current liability 4_________ Accounts Receivable is one of the accounts that is the most liquid 5__________ Any asset that can be sold is considered liquid. 6. ________ As the degree of financial leverage increases, the probability a firm will encounter financial distress increases 7.___________ The book value of a firm is equivalent to the...

1. Discuss the management of accounts receivable collections, cash disbursements and cash float. 2. The credit...

1. Discuss the management of accounts receivable collections, cash disbursements and cash float. 2. The credit manager and accounts receivable collections staff can sink a company’s operations or make the company very successful. Why?

cash collections of accounts receivable will increase and decrease _ 1) accounts payable , accounts...

cash collections of accounts receivable will increase ____ and decrease _____ 1) accounts payable , accounts receivable 2) accounts receivable, accounts payable 3) cash, accounts receivable 4) cast, accounts payable when developring cost functions , which of the following is false 1) the cost funtion must be believable 2) the cost function does not have to be reliable 3) personal observations of cost and activities provide the best evidence of a plausible relationship between a cost and its cost driver...

Regarding accounts receivable and an allowance for uncollectible accounts, which of the following statements is false?...

Regarding accounts receivable and an allowance for uncollectible accounts, which of the following statements is false? Group of answer choices Net realizable value equals the sales price of an item less reasonable further costs to both make the item ready to sell and to sell it. An aging of accounts receivable is a determination of how long each receivable has been on the books. The net realizable value of accounts receivable is decreased when a bad debt is written off....

accounts payable and accounts receivable

What is the difference between accounts payable and accounts receivable?

A list of nine accounts receivable balance-related audit objectives: 1. Accounts receivable in the aged trial...

A list of nine accounts receivable balance-related audit objectives: 1. Accounts receivable in the aged trial balance agree with related master file amounts, and the total is correctly added and agrees with the general ledger. 2. Recorded accounts receivable exist. 3. Existing accounts receivable are included. 4. Accounts receivable are accurate. 5. Accounts receivable are properly classified. 6. Cutoff for accounts receivable is correct. 7. Accounts receivable is stated at realizable value. 8. The client has rights to accounts receivable....

The net accounts receivable on the books of GJY Corp. as of 1 January 20X3 are as follows: Accounts receivable ............................................................. $ 281,000

The net accounts receivable on the books of GJY Corp. as of 1 January 20X3 are as follows:Accounts receivable ............................................................. $ 281,000Less: Allowance for sales discounts .................................. 6,000Allowance for doubtful accounts ...................................... 20,650 $254,350During the year, the sales discount allowance is left unchanged, with discounts recorded directly in the sales discounts account. Allowances are adjusted at year end. Summarized transactions during 20X3 are as follows:a. Sales revenue was $620,000, of which 70% was on credit.b. Customers paid off $492,500 of...

What is accounts receivable? What is notes receivable and how are they different than accounts receivable?...

What is accounts receivable? What is notes receivable and how are they different than accounts receivable? How do creditors decide to extend credit to their customers? What processes do credit managers use to evaluate new customers? Now explain the allowance for doubtful accounts and provide examples.

An analysis of the general ledger accounts indicates that office equipment, which cost $202,500 and on...

An analysis of the general ledger accounts indicates that office equipment, which cost $202,500 and on which accumulated depreciation totaled $84,375 on the date of sale, was sold for $101,250 during the year. Using this information, indicate the items to be reported on the statement of cash flows. Transaction Section of Statement of Cash Flows Added or Deducted $202,500 cost of office equipment $84,375 accumulated depreciation $101,250 sales price $16,875 loss on sale of equipment (assume the indirect method is...