Question

QUESTION 1

1. When the direct write-off method of recognizing bad debt expense used, which of the following accounts would NOT be used?

   		Bad Debt Expense
   		Accounts Receivable
   		Allowance for Bad Debts
   		All of the above are used in the direct write-off method

1 points   

QUESTION 2

1. When the allowance method of recognizing bad debt expense is used, the entries at the time of collection a a small account previously off would:

   		Increase net income
   		Increase Allowance for Bad Debts
   		Decrease net income
   		Decrease Allowance for Bad Debts

1 points   

QUESTION 3

1. Deuce Company uses the allowance method to estimate the losses form uncollectible receivables. Net sales for the year are $120,000 and the company estimates its bad debts as 1 percent of net sales. If there is already a $1,200 debit balance in Allowance for Bad Debts, how should be recorded as Bad Debt Expense?

   		$1,200
   		$2,400
   		$24,000
   		No entry is required

1 points   

QUESTION 4

1. Following are the account balances from the December 31 trial balance of Hark Company. If 10% of the Accounts Receivable is estimated to be uncollectible, the entry to record the estimate of bad debts would include a debit to Bad Debt Expense for:

   	DB
   Accounts Receivable	20,000
   Allowance fro Bad Debts	800
   Sales Revenue	135,000

   		$2,000
   		$2,080
   		$2,800
   		$1,200

1 points   

QUESTION 5

1. A promissory note dated Dec. 1, 2012 bearing interest at a rate of 8% and due in 60 days is sent ot a creditor. The face value of the note is $10,000. The entry for accrued interest at December 31, 2012 by the issuer of the note includes a:

   		Debit to interest expense of $67
   		A credit ot interest payable of $133
   		Credit to interest expense of $67
   		Debit to interest payable of $133

1 points   

QUESTION 6

1. The entry (or entries) requried to record a sales return by a customer when using the perpetual inventory method would consist of:

   		A debit to Sales Revenue and a credit to Accounts Receivable
   		A debit to Sales Returns and Allowances and a credit to Accounts Receivables
   		Debits to Sales Returns and Allowances and Inventory and credits to Accounts Receivable and Costs of Goods Sold
   		Debits to Sales Returns and Allowances and Cost of Goods Sold and credits to Accounts Receivable and Inventory

1 points   

QUESTION 7

1. Which of the following will result if the current year's ending inventory amount is understated in the cost of goods calculation:

   		Cost of goods sold will be overstated
   		Total assets will be overstated
   		Net income will be overstated
   		Both A and C

1 points   

QUESTION 8

1. Which of the following would be true if inventory costs were increasing?

   		LIFO would result in lower net income and lower ending inventory amounts than would FIFO
   		FIFO would result in lower net income and higher ending inventory amounts than would LIFO
   		LIFO would result in a lower net income amount but a higher ending inventory amount that would FIFO
   		None of the above

1 points   

QUESTION 9

1. Given the following sale and purchasing information, what is the ending iinventory, if the periodic FIFO costing alternative is used? The beginning inventory on hand was 100 units at $1 each.

   1st Purchase	700 units @ $2
   2nd Purchase	1,000 units @ $3
   3rd Purchase	500 units @ $4
   4th Purchase	500 units @ $5
   Total units purchased	2,700
   1st Sale	400 units @$7
   2nd Sale	750 units @$8
   3rd Sale	500 units @$9
   4th Sale	500 units @$10
   Total units sold	2,150

   		$400
   		$500
   		$1,250
   		$3,100

1 points   

QUESTION 10

1. Using the following purchases and sales, what is the ending inventory if the periodic LIFO costing alternative is used? The beginning inventory iis 100 units on hand at $2 each.

   1st Purchase	500 units @$2
   2nd Purchase	1,000 units @ $3
   3rd Purchase	500 units @ $4
   4th Purchase	500 units @ $5
   Total units purchased	2,500
   1st Sale	600 units @$7
   2nd Sale	750 units @$8
   3rd Sale	500 units @$9
   4th Sale	500 units @$10
   Total units sold	2,350

   		$400
   		$500
   		$1,250
   		$3,100

1 points   

QUESTION 11

1. Using the following information, what is the average cost per unit available for sale during the year if the periodic inventory method is used (round to nearest cent)? The beginning inventory on had was 100 units at $1 each.

   1st Purchase	500 units @$2
   2nd Purchase	1,000 units @ $3
   3rd Purchase	500 units @ $4
   4th Purchase	500 units @ $5
   Total units purchased	2,500
   1st Sale	600 units @$7
   2nd Sale	750 units @$8
   3rd Sale	500 units @$9
   4th Sale	500 units @$10
   Total units sold	2,350

   		$2.61
   		$3.10
   		$3.53
   		$3.31

1 points   

QUESTION 12

1. A firm had a beginning inventory balance of $1,000, net purchases of $35,000 and sales of $40,000. Its gross margin percentage was 25%. Using the gross margin method, the ending inventory balance is:

   		$1,000
   		$7,000
   		$6,000
   		$10,000

1 points   

QUESTION 13

1. Which of the following is NOT usually depreciated, depleted or amortized?

   		Furniture
   		Land
   		Mineral deposits
   		Patents

1 points   

QUESTION 14

1. Depreciation can best be described as a method of

   		Allocating the costs of assets over their useful life
   		Accumulating funds for the replacement of assets
   		Reducing the carrying cost of assets to current market value
   		Deriving tax benefits

1 points   

QUESTION 15

1. The book value of an asset is the:

   		Original cost of the asset
   		Market value of the asset
   		Total of all expenses associated with the asset
   		Acquisition cost of the asset less any accumulated depreciation on the asset

1 points   

QUESTION 16

1. On January 1, 2012 Powers Press purchased equipment at a cost of $6,300. The equipment had an estimated useful life of three years or 15,000 hours. The equipment will have a $600 salvage value at the end of its life. The depreciation expense for the year ending December 31, 2012 using the straight-line method would be:

   		$1,900
   		$1,883
   		$475
   		$471

1 points   

QUESTION 17

1. On January 1, 2006, Powers press purchased equipment at cost of $6,300. The equipment had an estimated useful life of three years or 15,000 hours. The equipment will have a $600 salvage value at the end of its life. The equipment was used for 3,250 hours in 2012. The depreciation epense for the year ending December 31, 2012 using the units of production method would be:

   		$1,900
   		$1,235
   		$3,250
   		$1,365

1 points   

QUESTION 18

1. On January 1, 2011, Kinnear Company purchased equipment at a cost of $20,000. The equipment had useful life of 5 years and a salvage value of $2,000. Kinnear Company use the straight-line depreciation method for all its assets. Given this information, if the company sells the equipment for $13,600 on December 31, 2006, it will have a(n):

   		$2,000 loss
   		$2,000 gain
   		$800 loss
   		$800 gain

1 points   

QUESTION 19

1. The balance sheet category "intangible assets" includes:

   		Patents, trademarks and franchises
   		Equipment, land and buildings
   		Investments, receivables and customer lists
   		Goodwill, inventory and furnishings

1 points   

QUESTION 20

1. On March 3, 2006, Binford Tools acquired the following assets from Mace Harware for $360,000. How much goodwill should be recorded for this transactions?

   	Book Value	Fair Market Value
   Accounts Receivable	58,000	33,000
   Inventory	92,000	76,000
   Equipment	139,000	182,000
   Patent	13,000	8,000

   		$61,000
   		$58,000
   		$39,000
   		0

Answer 1