Accounting 2301 Test 2

A company has net credit sales of​ $1,200,000, beginning net accounts receivable of​ $290,000, and ending net accounts receivable of​ $201,000. What is the​ days' sales in accounts​ receivable? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest whole​ day.)

75 Days

Which of the following inventory costing methods is based on the actual cost of each particular unit of​ inventory?

Specific Identification

Specific Identification

Identifies exactly which inventory item was sold. Usually used for higher cost inventory.

Which of the following states that a company must perform strictly proper accounting only for items that are significant to the​ business's financial​ statements?

Materiaity Concept

A business maintains subsidiary accounts for each of its customers. On May​ 15, the business provides services on​ account: $1,900 to customer J. Anthony​ ; $4,900 to customer A.​ Martin; and​ $1,300 to customer S. Lee. Which journal entry is needed to record these​ transactions?

May 15 Accounts Receivable-J. Anthony ​1,900 Accounts Receivable-A. Martin ​4,900 Accounts Receivable-S. Lee ​1,300 Service Revenue ​8,100

A check for which a​ maker's bank account has inadequate money to pay the check is known as a​ ________

Nonsufficient funds check

Weighted-average

Calculates a​ weighted-average cost based on the cost of goods available for sale and the number of units available.

Which of the following states that the business should use the same accounting methods from period to​ period?

Consistency Principle

The tracking of inventory shrinkage due to​ theft, damage, or errors is done with the help of a​ (n) ________ of inventory

Physical Count

Materiality Concept

Principle that states significant items must conform to GAAP.

Conservatism

Principle whose foundation is to exercise caution in reporting financial statement items.

Disclosure principle

Requires that a company report enough information for outsiders to make knowledgeable decisions

A pharmaceutical company testing drugs to determine possible side effects is a part of​ ________.

Risk Assessment

Which of the following line items will appear on the income statement of a merchandiser but not of a service​ company?

Cost of Goods Sold

The Merchandise Inventory account of a company shows a balance of​ $30,000 but a physical count of inventory shows​ $29,000 Which of the following entries is required to record the​ shrinkage? (Assume a perpetual inventory​ system.)

Cost of Goods Sold Merchandise Inventory

When a company that uses the perpetual inventory system sells goods for​ cash, the journal entry to record cost of goods sold​ is

Cost of Goods Sold Merchandise Inventory

Which of the following values is considered the market value when valuing inventory at lower-of-cost-or- market under US GAAP

Current replacement cost

​Samson, Inc. had the following balances and transactions during​ 2019: Beginning Merchandise Inventory 25 units at $ 95 March 10 Sold 22 units June 10 Purchased 75 units at $ 100 October 30 Sold 70 units What is the balance of the​ company's Merchandise​ Inventory, as disclosed in the December​ 31, 2019 balance sheet as per the periodic FIFO inventory costing​ method?

$800

A company that uses the periodic inventory provides the following​ information: 1. Beginning Inventory​ $12,000 2. Net Purchases​ $93,000 At the end of the​ period, the physical count of inventory reveals that​ $14,000 of inventory is on hand. What is the amount of cost of goods​ sold?

$91,000

Boulevard Home Furnishings had the following balances and transactions during 2018. Beginning Inventory 15 units at $ 71 June 10 Purchased 30 units at $ 83 December 30 Sold 25 units December 31 Replacement cost $ 85 The company maintains its records of inventory on a perpetual basis using the FIFO inventory costing method. Calculate the amount of ending Merchandise Inventory at December​ 31, 2018 using the lower-of- cost-or-market rule.

$1,660

The Allowance for Bad Debts account has a credit balance of​ $2,000 before the adjusting entry for bad debts expense. The​ company's management estimates that​ 4% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to​ $250,000. What is the amount of Bad Debts Expense reported on the income statement for​ 2019?

$10,000

An​ invoice, with payment terms of 3​/10​, ​n/30, was issued on April 28 for $ 230. If the payment was made on May​ 12, the amount of payment will be​ ________. (Round your answer to the nearest​ cent.)

$230.00

Accounts Receivable has a balance of​ $32,000, and the Allowance for Bad Debts has a credit balance of​ $3,000. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a​ $2,100 account receivable is written​ off?

$29000;$29000

High Quality Jewelers uses the perpetual inventory system. On March​ 3, High Quality sold merchandise for​ $55,000 to a customer on account with terms​ 4/15, n/30. The cost of goods sold was​ $22,000. On March​ 18, High Quality received payment from the customer. Calculate the amount of gross profit.

$30,800

The Allowance for Bad Debts account has a credit balance of $ 5,000 before the adjusting entry for bad debts expense. The​ company's management estimates that 3​% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $ 280,000. What is the amount of Bad Debts Expense reported on the income statement for​ 2019?

$8,400

The following information is available for Juno Company for the month ending June​ 30, 2019. ​* Balance as per the bank statement is $ 11500. ​* Balance as per books is $ 10200. ​* Check​ #506 for $ 1400 and check​ #510 for $ 800 were not shown on the June​ 30, bank statement. ​* A deposit in transit of $ 3035 had not been received by the bank when the bank statement was generated. ​* A bank debit memo indicated an NSF check for $ 90 written by Jane Smith to Juno Company on June 13. ​* A bank credit memo indicated a note collected by the bank of $ 2200 and interest revenue of $ 50 on June 20. ​* The bank statement indicated service charges of $ 25. What is the adjusted book​ balance?

$12,335

A merchandiser uses a perpetual inventory system. The beginning Retained Earnings balance of the merchandiser was​ $110,000. During the​ year, Sales Revenue amounted to​ $90,000, Cost of Goods Sold was​ $40,000, and all other expenses totaled​ $12,000. The company declared and paid​ $27,000 as dividends. The ending balance of Retained Earnings would be​ ________.

$121,000

A company purchased 500 units for​ $30 each on January 31. It purchased 550 units for​ $33 each on February 28. It sold a total of 650 units for​ $45 each from March 1 through December 31. What is the cost of ending inventory on December 31 if the company uses the firstminus​in, firstminusout ​(FIFO) inventory costing​ method? (Assume that the company uses a perpetual inventory​ system.)

$13,200

After the December​ 31, 2019 adjusting journal entries have been​ posted, Sinclair Enterprises has the following account balances​ (all accounts have normal​ balances) are: Account Title Account Balance Accounts Receivable $ 157,000 Allowance for Bad Debts $ 4,300 Bad Debts Expense $ 8,600 What is the net realizable value as of December​ 31, 2019?

$152700

A company issues a​ 120-day, 14% note for​ $16,000. What is the principal amount of the​ note? (Round your answer to the nearest​ dollar.)

$16000

The following information is from the records of Chicago​ Photography: Accounts​ Receivable, December​ 31, 2019 $ 20000​ (debit) Allowance for Bad​ Debts, December​ 31, 2019 prior to adjustment 1000​ (debit) Net credit sales for 2019 93000 Accounts written off as uncollectible during 2019 350 Bad debts expense is estimated by the aging-of-receivables method. Management estimates that $ 2750 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts.

$17,250

The following information is needed to reconcile the cash balance for Discount Dry​ Cleaning, Inc. ​* A deposit of $ 5600 is in transit. ​* Outstanding checks total $ 1300. ​* The book balance is $ 6000 at February​ 28, 2019. ​* The bookkeeper recorded a $ 1500 check as $ 17200 in payment of the current​ month's rent. ​* The bank balance at February​ 28, 2019 was $ 17820. ​* A deposit of $ 400 was credited by the bank for $ 4000. ​* A​ customer's check for $ 3100 was returned for nonsufficient funds. ​* The bank service charge is $ 80. What was the adjusted book​ balance?

$18,520

​Baldwin, Inc. had the following balances and transactions during​ 2019: Beginning Merchandise Inventory as of January​ 1, 2019 125 units at​ $81 March 10 Sold 50 units June 10 Purchased 225 units at​ $86 October 30 Sold 175 units What would be reported as Cost of Goods Sold on the income statement for the year ending December​ 31, 2019 if the perpetual inventory system and the first-​in, first-out inventory costing method are​ used?

$18,725

The Allowance for Bad Debts account has a debit balance of $ 7,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary​ ledger, the​ company's management estimates that uncollectible accounts will be $ 12,000. What will be the amount of the adjustment in the Allowance for Bad Debts​ account?

$19,000

The following information is from the records of Chicago​ Photography: Accounts​ Receivable, December​ 31, 2019 ​$22,000 (debit) Allowance for Bad​ Debts, December​ 31, 2019 prior to adjustment ​$800 (debit) Net credit sales for 2019 ​$95,000 Accounts written off as uncollectible during 2019 ​$450 Bad debts expense is estimated by the​ aging-of-receivables method. Management estimates that​ $2,850 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts.

$19,150

A​ company's Cash account shows an ending balance of​ $4,600. Reconciling items included a bookkeeper error of​ $130 (a​ $500 check recorded as​ $630), two outstanding checks totaling​ $830, a service charge of​ $25, a deposit in transit of​ $250, and interest revenue of​ $30. What is the adjusted book​ balance?

$4,735

​Wildflower, Inc. provided the following for​ 2019: Cost of Goods Sold​ (Cost of​ sales) ​$1,000,000 Beginning Merchandise Inventory ​325,000 Ending Merchandise Inventory ​630,000 Calculate the average merchandise inventory held by​ Wildflower, Inc. during the year.

$477,500

A company purchased 100 units for $ 30 each on January 31. It purchased 95 units for $ 40 each on February 28. It sold 150 units for $ 55 each from March 1 through December 31. If the company uses the last-​in, first-out inventory costing​ method, what is the amount of Cost of Goods Sold on the income statement for the year ending December​ 31? (Assume that the company uses a perpetual inventory​ system.)

$5,450

A company purchased 300 units for​ $20 each on January 31. It purchased 200 units for​ $40 each on February 28. It sold a total of 250 units for​ $110 each from March 1 through December 31. If the company uses the lastminus​in, firstminusout inventory costing​ method, calculate the cost of ending inventory on December 31.​ (Assume that the company uses a perpetual inventory​ system.)

$5000

On July​ 7, University Bank lent $ 520 comma 000 to Jazz Music Shop on a 60​ day, 9​% note. What is the maturity value of the​ note? (Use a 360day year and round answers to the nearest​ dollar.)

$527,800

On July​ 7, University Bank lent​ $560,000 to Jazz Music Shop on a 60​ day, 7% note. What is the maturity value of the​ note? (Use a​ 360-day year and round answers to the nearest​ dollar.)

$566,533

Anderson​ Farms, Inc. provided the following for​ 2018: Cost of Goods Sold​ (Cost of​ sales) ​$1,300,000 Beginning Merchandise Inventory ​340,000 Ending Merchandise Inventory ​630,000 Calculate the​ company's inventory turnover ratio for the year.​ (Round your answer to two decimal​ places.

2.68 times per year

The accounts receivable turnover ratio for a merchandiser is 9.6 times. Calculate the​ days' sales in receivables for the merchandiser.​ (Round your answer to the nearest​ day.)

38 days

A company made net sales revenue of $ 540,000​, and cost of goods sold totaled $ 324,000. Calculate its gross profit percentage.

40%

A company sold merchandise with a cost of $ 228 for $ 330 on account. The seller uses the perpetual inventory system. The entry to record the cost of merchandise sold would include​ ________.

A debit to Costs of Goods Sold and a credit to Merchandise Inventory for $228

A company that uses the perpetual inventory system purchased inventory for $ 1 comma 200000 on account with terms of 4​/7, ​n/20. Which of the following correctly records the payment made 15 days after the date of​ invoice?

Accounts Payable Cash

Which of the following is a requirement of the Sarbanes-Oxley ​Act?

An outside auditor must evaluate the client's internal controls and report on the internal controls as part of the audit report

Which of the following is the basic internal control procedure with respect to cash​ receipts?

Depositing all cash receipts in the bank shortly after the cash is received.

City Advertising Services hired a new accounting manager. He signed a contract for a new accounting information​ system, but his position did not specify whether he was authorized to do so or not. Which internal control procedure needs​ strengthening?

Assignment of Responsibilities

Consistency principle

Businesses should use the same accounting methods from period to period.

Forever Jewelers uses the gross method and a perpetual inventory system. On April​ 2, Forever sold merchandise with a cost of​ $1,700 for​ $5,600 to a customer on account with terms of​ 2/15, n/30. Which of the following would be included in the journal entry to record the cash receipt on April​ 10?

Debit to Sales Discounts for​ $112

On a multi-step income​ statement, the operating expenses are subtracted from​ ________ to arrive at operating income

Gross Profit

Which of the following statements describes an invoice from a​ supplier?

It is a statement from the supplier showing the goods purchased and the amount due.

Which of the following is an objective of internal​ control?

To encourage employees to follow company policies

Last-in, Fist-out (LIFO)

Treats the most​ recent/newest purchases as the first units sold.

First-in, first-out (FIFO)

Treats the oldest inventory purchases as the first units sold.

Which of the following describes a​ firewall?

a technique for protecting data