Q1. The following is a record of Tiller Corporation's inventory transactions for the current month:
|
January 1
|
Balance, 500 units @ $10 each
|
January 5
|
Sale, 290 units @ $25
|
|
January 11
|
Purchase 300 units @ $12 each
|
January 13
|
Sale, 250 units @ $25
|
|
January 23
|
Purchase 400 units @ $13 each
|
January 27
|
Sale, 310 units @ $25
|
Tiller uses the periodic inventory system. Using the weighted-average inventory method, what is the amount of ending inventory on January 31?
14004
9775
4085
4025
Q2. All of the following are considered primary user of financial reports, except:
Employees
Investors
Creditors
All of the above
Q3. As of December 31, Wiliams Corporation has outstanding accounts receivable of $3.6 million. Sales on credit during the year were $12.5 million. The allowance for doubtful accounts has a credit balance of $62,000. If the company estimates that 1% of its net credit sales will be uncollectible, what will be the amount of bad debt expense recognized for the year?
63000
125000
187000
360000
Q4. The month-end bank statement for Guthrie Motors shows a balance of $125,000 and a bank service charge of $40. Outstanding checks are $35,000, and a deposit of $11,500 was in transit at month end. The correct balance in the bank account at month end is
101500
101460
98500
98460
Q5. At December 31, Norman Industrial Inc. had account balances before year-end adjusting entries for accounts receivable and the related allowance for doubtful accounts of $850,000 and $79,000 respectively. An aging of accounts receivable indicated that $88,000 of December 31, receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is
938000
929000
771000
762000
Q6. The following is a record of Meyer Corporation's inventory transactions for the current month:
|
October 1
|
Balance, 600 units @ $24 each
|
October 9
|
Sale, 600 units @ $51
|
|
October 12
|
Purchase 550 units @ $26 each
|
October 19
|
Sale, 500 units @ $51
|
|
October 25
|
Purchase 700 units @ $27 each
|
|
|
Meyer uses the periodic inventory system. Using the LIFO method, what is the amount of ending inventory on October 31?
18300
20200
18000
29300
Q7. Accounting information is made useful for decision making by which two fundamental qualities?
Faithful representation and comparability
Comparability and timeliness
Relevance and faithful representation
Materiality and neutrality
Q8. On June 1, 2014, Vision Corporation consigned 100 TVs, costing $1,000 each, to Future Electronics. The cost of shipping the TVs amounted to $2,500 and was paid by Vision Corporation. On December 31, Future Electronics emailed a report to Vision, indicating that 72 of the TVs had been sold for $1,800 each. Future also included remittance for the amount due, after deducting a commission of 5%, advertising of $500, and installation costs of $1,440. What amount should Vision Corporation include on its December 31, 2014 balance for the consigned TVs?
0
28000
28700
30643
Q9. Hemmer Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2011. Its inventory at that date was 450,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:
|
Date
|
Inventory at Current Prices
|
Current Price Index
|
|
December 31, 2012
|
$513,600
|
107
|
|
December 31, 2013
|
$580,000
|
125
|
|
December 31, 2014
|
$650,000
|
130
|
What is the ending inventory at December 31, 2012 under dollar-value LIFO?
464000
464980
482100
497080
Q10. Jot Construction Company uses the percentage-of-completion method of accounting. In 2013, Jot began work on a contract it had received which provided for a contract price of $6,000,000. Additional information related to the project includes: costs incurred during the year were $2,100,000; estimated costs to complete as of December 31, 2013 were $1,400,000. What amount should Jot recognize as gross profit for the project in 2013?
700000
1000000
1500000
2500000
Q11. How is the gross profit method used as it relates to inventory valuation?
To provide an inventory value of LIFO inventories.
To estimate inventories for annual statements.
To verify the accuracy of the perpetual inventory records.
To verify the accuracy of the physical inventory.
Q12. At December 31, 2013, Vega Vaccum Corporation has cash in bank of 104,000, restricted cash in a separate account of $19,000, and a bank overdraft at another bank of $500. How much should it report as cash on the balance sheet?
123000
122500
104500
104000
Q13. A company has satisfied its performance obligation when the
company has transferred physical possession of the asset.
company has significant risks and rewards of ownership.
The company has legal title to the asset
The company has received payments for goods and services
Q14. The following is a record of Caulder Corporation's inventory transactions for the current month:
|
March 1
|
Balance, 500 units @ $40 each
|
March 12
|
Sale, 200 units @ $85
|
|
March 16
|
Purchase, 300 units @ $42 each
|
March 22
|
Sale, 350 units @ $85
|
|
March 28
|
Purchase, 300 units @ $43 each
|
|
|
Caulder uses the perpetual inventory system. Using the LIFO method, what is the ending inventory on March 31?
22900
22100
22600
23400
Q15. Swift Builders, Inc. uses the completed-contract method of accounting for a $450,000 contract that it expects will take two years to complete. At December 31, 2013, the end of the first year of the contract, additional information related to the project includes: costs incurred to date were $290,000; estimated costs to complete were $180,000; billings to date were $325,000; collections to date were $300,000. What amount should Swift recognize as gross profit or loss for 2013?
0
20000 loss
40000 loss
110000 loss
Q16. Which of the following is not a characteristic of generally accepted accounting principles?
each principle is approved by the SEC
standards are considered useful by the profession
a common set of standards and principles
practices which have become universally accepted over time.
Q17. Kandris Corporation had a balance in accounts receivable of $600,000 and a balance in allowance for doubtful accounts of $55,000, when management decided the account receivable from Dunn Corporation of $2,000 had become uncollectible. What journal entry should Kandris Corporation make to write-off the uncollectible account?
Debit Bad Debt Expense, credit Allowance for Doubtful Accounts, $2,000
Debit Accounts Receivable, credit Allowance for Doubtful Accounts, $2,000
Debit Allowance for Doubtful Accounts, credit Accounts Receivable, $2,000
Debit Allowance for Doubtful Accounts, credit Bad Debt Expense, $2,000
Q18. If the historical cost of product X is $55, the selling price of product X is $90, the costs to sell product X are $14, the replacement cost for product X is $50, and the normal profit margin is 30% of sales price, what is the market value that should be used in the lower-of-cost-or-market comparison?
50
49
76
55
Q19. Inventories are primarily accounted for at cost on the balance sheet. In a departure from the cost basis, inventory is accounted for at market when
There is any decrease in the future utility
Mangement wants to decrease the value of ending inventory
There is a decrease in the future utility below the original cost
Management wants to defer profits to a future period
Q20. Which of the following is classified as cash on the balance sheet?
checking account balance
post-dated checks
postage stamps
cash rectricted for plant expansion
Q21. In the context of dollar-value LIFO, when inventory in base year dollars decreases,
the LIFO reserve increase
A LIFO layer is liquidated
A LIFO layer is created
The LIFO price index decreases
Q22. Energy Solutions Corporation estimates the cost of its physical inventory at November 30 for use in an interim financial statement. Management uses a gross profit rate on sales of 30%. The following information is available:
|
Inventory, November 1
|
$500,000
|
|
Purchases during November
|
$650,000
|
|
Sales during November
|
$900,000
|
The estimated cost of inventory at November 30 is
270000
630000
650000
520000
Q23. In the financial statements, under what qualitative characteristic of accounting information should a change in inventory valuation method be reported?
Verifiability
Consistency
Neutrality
Timeliness
Q24. Generally, product costs are recognized as expenses
In the period when the related revenue is recognized
In the period when the vendor invoice is recieved
In the period when the expenses are paid.
In the period when the expenses are incurred
25. As of December 31, Gammelguard Corporation has outstanding accounts receivable of $1.5 million. Sales on credit during the year were $9 million. The allowance for doubtful accounts has a credit balance of $20,000. If the company estimates that 9% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?
115000
135000
155000
810000
Q26. Capital City Corporation uses the conventional retail inventory method to determine its ending inventory at cost. The following information is available for the current year:
|
|
Cost
|
Retail
|
|
Beginning Inventory
|
$350,000
|
$500,000
|
|
Purchases
|
$1,600,000
|
$2,440,000
|
|
Net Markups
|
|
$60,000
|
|
Net Markdowns
|
|
$30,000
|
|
Sales
|
|
$2,350,000
|
Capital City determines that the cost-to-retail ratio is 65%. What is the ending inventory at cost?
620000
350000
470000
403000
Q27. The following is a record of Axis Corporation's inventory transactions for the current month:
|
June 1
|
Balance, 400 units @ $65 each
|
June 16
|
Sale, 500 units @ $90
|
|
June 14
|
Purchase 900 units @ $68 each
|
June 20
|
Sale, 300 units @ $90
|
|
June 25
|
Purchase 250 units @ $70 each
|
|
|
Axis uses the periodic inventory system. Using the FIFO method, what is the amount of cost of goods sold for the month?
51500
52000
53200
54900
Q28. Which of the following is a major challenge facing the accounting profession?
Timeless
Forward-looking data
Nonfinancial measurements
All of the above
Q29. Arrow Corporation uses the conventional retail inventory method to value its merchandise inventory. The following information is available for the current year:
|
|
Cost
|
Retail
|
|
Beginning Inventory
|
$30,000
|
$50,000
|
|
Purchases
|
$180,000
|
$250,000
|
|
Freight-In
|
$2,500
|
----
|
|
Net Markups
|
|
$8,500
|
|
Net Markdowns
|
|
$10,000
|
|
Employee Discounts
|
|
$1,000
|
|
Sales
|
|
$205,000
|
What is the cost to retail ratio?
68.88%
68.07%
70.35%
70.83%
Q30. When a firm reports financial results on an annual basis, which basic assumption is illustrated?
Periodicity assumption
Economic entity assumption
Going concern assumption
Monetary unit assumption
Q31. In the context of standard setting at the FASB, which of the following describe due process?
public hearings are held on proposed accounting standards
FASB operates in full view of the public
interested parties can express their views
all of the above
Q32. If Collier Costumes, Inc. has the following items at year-end, how much should it report as cash on the balance sheet?
|
Cash in bank
|
$42,600
|
|
Cash on hand
|
$580
|
|
Post-dated checks
|
$1,420
|
|
Certificates of deposit
|
$90,000
|
42600
43180
44600
133180