1. In a period of rising prices, which inventory cost flow method will produce the lowest amount of cost of goods sold.
A. Fifo B. Weighted average C. LIFO D.all methods will produce the same amount of cost of goods sold.
2.When prices are falling:
A. LIFO will result in lower income and a lower ending inventory than will FIFO.
B. LIFO will result in lower income and a higher ending inventory than will FIFO.
C. LIFO will result in higher income and a lower ending inventory than will FIFO.
D. LIFO will result in higher income and a higher ending inventory than will FIFO.
3. At the end of 2007, selden company had outstanding accounts receivable of $110,000. Before recording the adjusting entry for uncollectible accounts, the balance in the allowance for doubtful accounts was $300. If seden estimates that it will not collect 4 percent of its accounts receivable, what amount of uncollectible accounts expense should selden record? Round to the nearest dollar.
A) $4,100
B) $4,400
C) $4,040
D)$4,600
E)none of the above
4. Evergreen Company accepted a credit card account receivable in exchange for $10,000 of services provided to a customer. The credit card company charges a 4% service charge. Recording the service revenue and the service charge would?
A) decrease expenses by $400
B) increase assets by $10,000
C) increase assets by $10,400
D) increase assets by $9,600
E) None of the above