Ch. 5
Ch. 6
Ch. 7
Ch. 8
Wild Card
100
True or false
The cost flow method chosen must match the actual physical flow of the goods.
False
100
This is used to measure how quickly a company can convert its accounts receivable into cash
Number of days' sales uncollected
100
The total amount of the note and interest due on the maturity date of a $6,000, 60-day 4%, note receivable is:
$6,040.
100
Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,000, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of:
5,000
100
Identify the following internal control principle associated with this action -
Detailed records of inventory are kept to ensure items lost or stolen do not go unnoticed.
Maintain adequate records
200
Buffalo Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available:
- The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Buffalo on December 28 and shipped FOB destination on that date. Buffalo did not receive the goods until January 2 of the following year.
- The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000. The net realizable value of the damaged goods was $10,000.
Based on this information, the correct balance for ending inventory on December 31 is:
384,000
200
Two clerks sharing the same cash register is a violation of which internal control principle?
Establish responsibilities
200
The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense.
All sales are made on credit. Based on past experience, the company estimates 1% of sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
Debit Bad Debts Expense $21,000; credit Allowance for Doubtful Accounts $21,000.
200
Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 3?
13,750
200
At the end of the day, the cash register's record shows $2,050, but the count of cash in the cash register is $2,058. The correct entry to record the cash sales is
Debit Cash $2,058; credit Cash Over and Short $8; credit Sales $2,050.
300
A company has the following purchases and sales during March. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?
$734
300
If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794, how should this error be treated on the bank reconciliation? (specifiy amount and whether it should be added or subtracted from bank or book balance)
Add $45 to the book balance.
300
The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts:
All sales are made on credit. Based on past experience, the company estimates 3.5% of ending accounts receivable to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475.
300
Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be:
54,000
300
Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales:
What is the value of ending inventory?
$380
400
Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO.
3,550
400
In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information:
$6,520
400
Sustainable Supplies prepares the following aging of receivables analysis:
Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $500 credit.
Debit Bad Debts Expense $840; credit Allowance for Doubtful Accounts $840.
400
An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000,will there be a gain or loss recorded on the sale? If so, for how much?
A loss on sale of $2,000
400
Majesty Productions accepted a $7,200, 120-day, 6% note from Swartz Studio on March 1. On the date the note matures, Swartz is unable to pay, but Majesty intends to continue collection efforts. What entry should Majesty record on the maturity date for this dishonored note?
Debit Accounts Receivable—Swartz $7,344; credit Interest Revenue $144; credit Notes Receivable $7,200.
500
Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to the ending inventory using FIFO.
2,980
500
Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:
29,420
500
Uniform Supply accepted a $4,800, 90-day, 10% note from Tracy Janitorial on October 17. What entry should Uniform Supply make on January 15 of the next year when the note is paid?
Debit Cash $4,920; credit Interest Revenue $20; credit Interest Receivable $100; credit Notes Receivable $4,800.
500
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the double-declining-balance method.
20,880
500
A machine costing $75,000 is purchased on January 1, Year 1. The machine is estimated to have a salvage value of $10,000 and an estimated useful life of 4 years. Double-declining-balance depreciation is used. If the machine is sold on January 1, Year 4 for $9,000, the journal entry to record the sale will be:
