Question

In: Accounting

1.Which of the following do not affect the amounts collected on accounts receivables? a.credit policy b.returns...

1.Which of the following do not affect the amounts collected on accounts receivables?

a.credit policy

b.returns policy

c.discounts policy

d.the allowance for doubtful accounts

2.Which of the following would most likely use a periodic inventory system?

a.car dealership

b.heavy metal distributor

c.computer dealership

d.local handcrafted furniture store

3.Which of the following is NOT an inventory account in a manufacturing company?

a.Raw Material

b.Work-in-Process

c.Goods Available For Sale

d.Finished Goods

4.Effective inventory management would have one person place the order for new inventory, a second person check it against the purchase order when it arrives, and a third person record the receipt of inventory in the accounting records. The purpose of this system is

a.to reduce spoilage.

b.to reduce storage costs.

c.to guard against stockouts.

d.to guard against internal theft and collusion.

5.Management may use the cost formula decision tree when determining which cost formula to use. If goods are not interchangeable, management’s options are

a.weighted-average.

b.FIFO.

c.Just-in-time.

d.specific identification.

6.When a company is evaluating whether or not to use a perpetual vs. a periodic inventory system the following statement is most accurate.

a.A perpetual inventory system provides far superior information and should be used at any cost.

b.A periodic system is inferior and should never be used if possible.

c.The cost of the system used should be measured against the benefits it provides.

d.Both systems are equally good.

Expert Solution

1.Which of the following do not affect the amounts collected on accounts receivables?

Ans. (D).the allowance for doubtful accounts

Explanation : the allowance for doubtful accounts mean which amounts not collected from debtors so this is not a part of credit policy or account receivable.

2.Which of the following would most likely use a periodic inventory system?

Ans. (D).local handcrafted furniture store

Explanation : Periodic inventory system mean inventory calculated on specific time period occasional period so first three option apply regular inventory calculation so option d is right.

3.Which of the following is NOT an inventory account in a manufacturing company?

Ans. (C) Goods Available For Sale

Explanation : Manufacturing company prepared only Raw material, WIP Accounts and finished good Account. Actually Goods available for sale i.e. this goods are ready for sales in the market.

5.Management may use the cost formula decision tree when determining which cost formula to use. If goods are not interchangeable, management’s options are

Ans. (D) specific identification.

Explanation : Goods are not Interchangeable mean which goods are purchased for specific products or order so for this type product used specific cost will be charged.

6.When a company is evaluating whether or not to use a perpetual vs. a periodic inventory system the following statement is most accurate.

Ans. (D) .Both systems are equally good.

Explanation : Perpetual inventory system used for continuous process to maintained inventory in business where periodic inventory use specific product.

ekkarill92 answered 1 year ago

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