Financial Accounting Test 2

Bramble Company gathered the following reconciling information in preparing its August bank reconciliation Cash balance per books 8/31 $19300 Deposits in transit $970 Notes in receivable and interest collected by bank $4790 Bank charge for check printing $120 Outstanding checks $11400 NSF check $1010 The adjusted cash balance per books on August 31 is A. $23930 B. $22960 C. $11560 D. $12450

B. $22960

Using the following information: 12/31/17 Accounts receivable $527000 Allowance ($34900) Cash realizable value $492100 During 2018, sales on account were $144900 and collections on account were $98400. Also during 2018, the company wrote off $3980 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at $39800. Bad debt expense for 2018 is A. $39800 B. $8880 C. $3980 D. $4900

B. $8880

Which of the following accounts is not closed to Income Summary? A. Cost of Goods Sold B. Inventory C. Sales Revenue D. Sales Discounts

B. Inventory

the fraud triangle applies to A. US companies but not international companies B. US and international companies C. international companies but not US companies D. US and Canadian companies but not other international companies

B. US and international companies

which of the following is NOT a common cost flow assumption used in costing inventory A. average cost B. middle-in, first-out C. Last-in, first-out D. first-in, first-out

B. middle-in, first-out

The best managed companies will have A. no uncollectible assets B. some accounts that will prove to be uncollectible C. a very lenient credit policy D. a very strict credit policy

B. some accounts that will prove to be uncollectible

Sheridan Company sells merchandise on account for $4400 to Carla Vista Company with credit terms of 2/10, n/30. Carla Vista Company returns $1100 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check? A. $4312 B. $4234 C. $3234 D. $3300

C. $3234

If a company has sales revenue of $644000, net sales of $500000, and cost of goods sold of $380000, the gross profit rate is A. 76.0%. B. 41.0%. C. 24.0%. D. 59.0%.

C. 24.0%. (net sales-COGS)/net sales

After gross profit is calculated, operating expenses are deducted to determine A. gross margin. B. net margin. C. net income. D. gross profit on sales.

C. Net income

when opening a bank checking account, a signature card A. indicates to whom money is to be paid B. is required only when dealing with an out-of-state bank C. indicates each person authorized to sign checks on the account D. is attached to all pre-printed checks

C. indicates each person authorized to sign checks on the account

Disclosures about inventory should include each of the following EXCEPT the A. basis of accounting B. costing method C. quantity of inventory D. major inventory classifications

C. quantity of inventory

Swifty Industries had the following inventory transactions occur during 2018: 2/1/18 Purchase 52 units $50 3/14/18 Purchase 97 units $45 5/1/18 Purchase 69 units $45 The company sold 130 units at $60 each and has a tax rate of 20%. Assuming that a periodic inventory system is used, what is the company's after-tax income using FIFO? A. $1950 B. $1188 C. $1690 D. $1352

D. $1352

The maturity value of a $5300, 6%, 60-day note receivable dated February 10th is A. $5618 B. $5300 C. $5327 D. $5353

D. $5353 (dollar amount x percent as decimal x month/12)

the direct write-off method A. shows only actual losses from uncollectible accounts receivable B. debits allowance for doubtful accounts to record write-offs of accounts C. estimated bad debt losses D. is acceptable for financial reporting purposes

A. shows only actual losses from uncollectible accounts receivable

A merchandising company using a perpetual system may record an adjusting entry by A. debiting Sales Revenue B. debiting Income Summary C. crediting Income Summary D. debiting Cost of Goods Sold

D. debiting Cost of Goods Sold

checks received through mail should A. be cashed at the bank as soon as possible B. be sent to the accounts receivable subsidiary ledger clerk for immediate posting to the customer's account C. be "rung up" on a cash register immediately D. immediately be endorsed "for deposit only"

D. immediately be endorsed "for deposit only"

The receivable that is usually evidenced by a formal instrument of credit is a(n) A. income tax receivable B. accounts receivable C. trade receivable D. note receivable

D. note receivable

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more A. detailed B. rules-based C. full of disclosure requirments D. principles-based

D. principles based

Internal controls are concerned with A. the extent of government regulations B. preparing income tax returns C. only manual systems of accounting D. safeguarding assets

D. safeguarding assets

An auto manufacturer would classify vehicles in various stages of production as A. finished goods B. merchandise inventory C. raw materials D. work in process

D. work in process