Defenitions
Interest & Inventory
Banks
& Accounts
& Accounts
Let's do some math!
Misc.
100
Which of the following activities is not a component of the operating cycle?
a. Sale of merchandise
b. Payment of employees’ salaries
c. Collection of cash from merchandise sales
d. Purchase of merchandise
B. Payment of employees' salaries
100
A company purchased inventory as follows:
200 units at $6.00
300 units at $6.60
The weighted average unit cost for inventory is
a. $6.00.
b. $6.30.
c. $6.36.
d. $6.40.
e. $6.60.
c. $6.36.
100
Which of the following bank reconciliation items would not result in an adjusting entry?
a. Service charge.
b. Deposits in transit.
c. NSF check of customer.
d. Collection of a note by the bank.
b. Deposits in transit.
100
Karlin Company gathered the following reconciling information in preparing its April bank reconciliation:
Cash balance per books, 4/30 $17,600
Deposits in transit 2,400
Notes receivable and interest collected by bank 5,920
Bank charge for check printing 200
Outstanding checks 12,000
NSF check 1,120
The adjusted cash balance per books on April 30 is
a. $24,600.
b. $23,520.
c. $22,200.
d. $24,440.
c. $22,200.
100
All of the following are examples of internal control procedures except
a. using prenumbered documents.
b. reconciling the bank statement.
c. customer satisfaction surveys.
d. insistence that employees take vacations.
c. customer satisfaction surveys.
200
Under a perpetual inventory system
a. accounting records continuously disclose the amount of inventory.
b. increases in inventory resulting from purchases are debited to purchases.
c. there is no need for a year-end physical count.
d. the account “purchase returns and allowances” is credited when goods are returned to vendors.
a. accounting records continuously disclose the amount of inventory.
200
Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?
a. Goods in transit to Reeves, FOB destination
b. Goods that Reeves has ordered and paid for, but have not yet been shipped by the supplier because they require additional manufacturing work before they are complete
c. Goods in transit that Reeves has sold to Smith Company, FOB shipping point
d. Goods that Reeves is holding in inventory on March 31 for which the related Accounts Payable is 15 days past due
d. Goods that Reeves is holding in inventory on March 31 for which the related Accounts Payable is 15 days past due
200
Which of the following would be subtracted from the balance per bank on a bank reconciliation?
a. Outstanding checks.
b. Deposits in transit.
c. Notes collected by the bank.
d. NSF check.
a. Outstanding checks.
200
An analysis and aging of the accounts receivable of Watts Company at December 31 reveal these data:
Accounts receivable: 3,200,000
Allowance for doubtful accounts per books before adjustment (credit): 200,000
Total estimated uncollectible accounts at December 31: 260,000
What is the net realizable value of the accounts receivable at December 31 after year-end adjustment?
a. $2,740,000
b. $3,000,000
c. $3,200,000
d. $2,940,000
d. $2,940,000
200
The interest on a $15,000, 6%, three-month note receivable is
a. $900.
b. $450.
c. $225.
d. $675.
c. $225.
300
The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is
a. called the matching principle.
b. called the consistency principle.
c. nonexistent; that is, there is no such accounting requirement.
d. called the physical flow assumption.
c. nonexistent; that is, there is no such accounting requirement.
300
Farwell Company purchased merchandise with an invoice price of $2,000 and credit terms of 2/10, n/30. Assuming a 360 day year, what is the implied annual interest rate (rate of return) inherent in the credit terms?
a. 4%
b. 24%
c. 36%
d. 72%
c. 36%
300
In reviewing the accounts receivable, the net realizable value is $28,000 before the write-off of a $2,000 account. What is the net realizable value after the write-off?
a. $28,000
b. $2,000
c. $30,000
d. $26,000
a. $28,000
300
Whitman Corporation sells six different products. The following information is available on December 31:
When applying the lower of cost or net realizable value rule to each item, what will Whitman's total ending inventory balance be?
a. $346,000
b. $332,400
c. $333,100
d. $332,800
b. $332,400
300
A company collects a customer's accounts receivable balance within the discount period. Indicate how this transaction would affect (1) assets, (2) stockholders' equity, and (3) revenues.
A.
(1) Decrease, (2) Decrease, (3) Decrease
B.
(1) Increase, (2) Increase, (3) Increase
C.
(1) Increase, (2) Increase, (3) No effect
D.
(1) No effect, (2) No effect, (3) No effect
A. (1) Decrease, (2) Decrease, (3) Decrease
400
Which of the following would be added to the balance per books on a bank reconciliation?
a. Outstanding checks.
b. Deposits in transit.
c. Notes collected by the bank.
d. NSF check.
c. Notes collected by the bank.
400
Tony’s Market recorded the following events involving a recent purchase of inventory:
Purchased goods for $100,000 on account, terms 2/10, n/30.
Returned $2,000 of the shipment for credit.
Paid $500 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company’s inventory balance
a. increased by $98,000.
b. increased by $98,500.
c. increased by $96,540.
d. increased by $96,500.
c. increased by $96,540.
400
Which of the following is considered a cash equivalent for financial reporting purposes?
a. Accounts Receivable
b. Investments with maturity dates greater than three months
c. Checks received from customers
d. Accounts payable
c. Checks received from customers
400
During November, NoleCo has the following inventory transactions:
During November, NoleCo sold 140 units at $75 each.
Under FIFO, Cost of Goods Sold equals
a. $3,560
b. $7,240
c. $3,280
d. $7,520
b. $7,240
400
The following information is related to December 31, 2021balances.
· Accounts receivable $3,150,000
· Allowance for doubtful accounts (credit) (270,000)
· Net realizable value $2,880,000
During 2022 sales on account were $870,000 and collections on account were $516,000. Also during 2022 the company wrote off $48,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that $324,000 of receivables will be uncollectible. Bad debt expense for 2022 is
a. $102,000.
b. $ 54,000.
c. $324,000.
d. $ 6,000.
a. $102,000.
500
Which of the following would reduce net sales revenue recognized by a company that sells inventory to customers?
a. Sales returns
b. Sales discounts
c. Sales allowances
d. Anticipated sales returns on previously recorded sales of products
e. All of the above
e. All of the above
500
Young Company lends Dobson industries $40,000 on August 1, 2022, accepting a 9-month, 9% interest note. If Young accrued interest at its December 31, 2022 year-end, what entry must it make to record the collection of the note and interest at its maturity date?
d. Cash 42,700
Notes Receivable 40,000
Interest Receivable 1,500
Interest Revenue 1,200
500
Which of the following is not an internal control activity for cash?
a. The number of persons who have access to cash should be limited.
b. The functions of record keeping and maintaining custody of cash should be combined.
c. Surprise audits of cash on hand should be made occasionally.
d. All cash receipts should be recorded promptly.
b. The functions of record keeping and maintaining custody of cash should be combined.
500
During November, NoleCo has the following inventory transactions:
During November, NoleCo sold 140 units at $75 each.
Under LIFO, Ending Inventory equals
a. $3,560
b. $7,240
c. $3,280
d. $7,520
c. $3,280
500
During November, NoleCo has the following inventory transactions:
During November, NoleCo sold 140 units at $75 each.
Under weighted average cost (round weighted average cost per unit to two decimal places), Gross Profit equals:
a. $10,500
b. $7,375
c. $7,076
d. $3,424
e. $3,125
e. $3,125