Financial Accounting Exam Ii, Chapters 5 & 6

23 Questions  I  By Stephens on October 17, 2011
Financial Accounting Exam II, Chapters 5 and 6

  
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1.  Fan company purchases inventory on account for $2500. The entry to record this purchase using a perpetual inventory system would include a:
A.
B.
C.
D.
2.  Th entry to record the estimate for uncollectible accounts includes:
A.
B.
C.
D.
3.  Snow company's net sales revenue is $200,000, its cost of goods sold is $110,000 and its operating income is $20,000.  How much are Snow Company's operating expenses?
A.
B.
C.
D.
4.  On April 1, 2012, Nelson Inc. accepts a $100,000, 8% note. The note receivable and interest are receivable on March 31, 2013.  On December 31, 2012, Nelson Inc. will record interest revenue of
A.
B.
C.
D.
5.  Schnell Company purchases inventory for $100,000 on account.  Shipping terms are FOB destination; Schnell pays shipping cost of $5000.  Prior to paying for the purchase, Schnell discovers that some of the inventory was damaged and receives an allowance of $7000.  Net purchases are:
A.
B.
C.
D.
6.  Which cost flow assumption generally results in the lowest reported amount of net income in periods of rising inventory costs?
A.
B.
C.
D.
7.  Which of the following is true for a company who uses the allowance method of accounting for uncollectible accounts?
A.
B.
C.
D.
8.  Winner Company purchases 100 units of inventory from Neue Company for $1000 on account.  To encourage early payment, Neue Company offers the terms 2/10, n/30, If Winner pays nine days after the purchase, the cost of its purchase will be:
A.
B.
C.
D.
9.  Weichtel Company's beginning inventory was $20,000.  During the year, Weichtel purchases inventory costing $100,000.  Based on a physical count at the end of the year, Weichtel determines that the ending inventory is $28,000.  How much was cost of goods sold for the year?
A.
B.
C.
D.
10.  A sales discount is recorded by the seller as
A.
B.
C.
D.
11.  Weiner Company's net credit sales were $500,000 during 2010.  On december 21, the accounts receivable ending balance is $80,000.  Assume the unadjusted balance of allowance for uncollectible accounts is a credit of $500 and that Weiner estimates that 7% of the accounts receivable will not be collected.  The amount of bad debt expense recorded on Decmeber 31 will be:
A.
B.
C.
D.
12.  If a company uses the allowance method of accounting for uncollectible accounts and writes off a specific account,
A.
B.
C.
D.
13.  Schmidt company's accounts receivable balance is $100,000, its adjusted balance in Allowance for Uncollectible Accounts is $4000, and its bad debt expense is $3800.  The net realizable value of accounts receivable is:
A.
B.
C.
D.
14.  Suppose that Witchel Company's ending inventory is understated by $500 at the end of the year.  If the error is not discovered, the company's gross profit for the year will be
A.
B.
C.
D.
15.  For a manufacturing company, the cost of items not yet complete at the end of the period are shown in the
A.
B.
C.
D.
16.  Weiner Company's net credit sales were $500,000 during 2010.  On december 21, the accounts receivable ending balance is $80,000.  Assume the unadjusted balance of allowance for uncollectible accounts is a debit of $500 and that Weiner estimates that 7% of the accounts receivable will not be collected.  The amount of bad debt expense recorded on Decmeber 31 will be:
A.
B.
C.
D.
17.  In times of rising inventory costs, which inventory method generally results in the highest ending inventory?
A.
B.
C.
D.
18.  When a company collects a previously written off account:
A.
B.
C.
D.
19.  The allowance method is required under G.A.A.P., because it is consistent with:
A.
B.
C.
D.
20.  Which of the following is generally found in the balance sheet of a manufacturing company?
A.
B.
C.
D.
21.  At the end of the year, Marline Corporation determines that its ending inventory ahs a cost of $2000 and a market value of $1900.  What would the effect(s) of the adjustment to write-down inventory to market value?
A.
B.
C.
D.
22.  Weiss Company's beginning inventory was $10000. During the year, Weichtel purchases inventory costing $100000. Based on a physical count at the end of the year, Weichtel determines that the ending inventory is $8000. How much is cost of goods available for sale?
A.
B.
C.
D.
23.  On April 1, 2012, Nelson Inc. accepts a $100,000, 8% note. The note receivable and interest are receivable on March 31, 2013.  On March 2013, Nelson Inc. will record interest revenue of
A.
B.
C.
D.
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