ac 210

Brownie Company had no beginning inventory. The company purchases 900 units of inventory in January at $5 each, 1,500 units at $4 each in August, and 600 units at $6 each in November. The company sells 450 units during the year. Brownie uses a periodic inventory system and the LIFO inventory costing method. What is the cost of goods sold?

$2,700

Harney Inc. uses the percentage of credit sales method of estimating doubtful accounts. The Allowance for Doubtful Accounts has an unadjusted credit balance of $5,700 and the company had $290,000 of net credit sales during the period. Harney has experienced bad debt losses of 6% of credit sales in prior periods. After making the adjusting entry for estimated bad debts, what is the ending balance in the Allowance for Doubtful Accounts account?

$23,100.

Meadow View Inc. has sales revenue of $68,000, beginning inventory of $12,000, purchases of $43,000, and ending inventory of $10,000. The cost of goods sold is:

$45,000

Molly Company purchased $6,000 of merchandise. Transportation costs were an additional $100 and were paid immediately. The company later returned $250 of the merchandise and paid the invoice after the 2% discount period. What is the total amount of cash paid by Molly Company on the day the invoice is paid?

$5,750

Cedar Co. updates its inventory periodically. The company's beginning inventory was $4,860 and purchases were $10,080 during the year. The company's ending inventory count was $9,000. What was the amount of its cost of goods sold?

$5,940

Accounts receivable $104,000 Unadjusted credit balance in Allowance for Doubtful Accounts $1,600 The company uses the aging of accounts receivable method. Its estimate of uncollectible receivables resulting from the aging analysis equals $8,300. What is the amount of Bad Debt Expense to be recorded for the year?

$6,700

Wrangler Inc. uses the percentage of credit sales method to estimate Bad Debt Expense. At the end of the year, the company's unadjusted trial balance includes the following: Accounts receivable $366,000 Allowance for Doubtful Accounts (credit balance) $1,900 Net Credit Sales $917,000 Wrangler has experienced bad debt losses of 0.8% of credit sales in prior periods. What is the Bad Debt Expense to be recorded for the year?

$7,336

XYZ Co. uses a periodic inventory system and has the following information in regard to its inventory: Beginning inventory 200 units @ $15 $3,000 Purchase on January 25 300 units @ $16 4,800 Purchase on March 15 200 units @ $17 3,400 Purchase on October 2 400 units @ $18 7,200 Goods available for sale $18,400 There are 500 units in ending inventory. What is the amount of the ending inventory using the FIFO method?

$8,900

Wechsler Company uses the aging of accounts receivable method. The company performed an aging of accounts receivable on December 31 and gathered the following information: Accounts receivable $605,000 Unadjusted Credit balance in Allowance for Doubtful Accounts 84,000 Estimated Uncollectible Accounts Receivable 93,000 What is the amount of Accounts Receivable, Net that will be reported on the balance sheet at December 31?

512,000

King's Boot Company uses a perpetual inventory system. The beginning balance in its inventory account is $1,500 and the ending balance is $1,000. Cost of goods sold is $6,500. What was the amount of inventory purchased during the year?

6000

The Shake Shop began the current month with inventory costing $17,500, then purchased inventory at a cost of $44,000. The perpetual inventory system indicates that inventory costing $46,710 was sold during the month for $48,000. If an inventory count shows that inventory costing $13,900 is actually on hand at month-end, what amount of shrinkage occurred during the month?

890

The Allowance for Doubtful Accounts account is a contra-account that offsets:

Accounts Receivable

The account Cash Shortage is which type of account?

An expense account

On November 2, 2018, Salt Company purchased $20,000 of goods from Pepper Company on account. How will this purchase affect Salt Company's financial statements on November 2?

Assets will increase, liabilities will increase, equity will remain unchanged

The adjusting entry to record the estimated bad debts in the period credit sales occur would normally include a debit to:

Bad Debt Expense and a credit to Allowance for Doubtful Accounts.

Which of the following kinds of inventory would be the best suited for the specific identification method?

Business jets

Which of the following statements about an auto manufacturer's inventory is not correct?

Cars that have been sold to dealers would be included in finished goods inventory.

Which line item would be found on a merchandiser's income statement and not on a service firm's?

Cost of Goods Sold

When a company sells goods, it removes their cost from the balance sheet and reports the cost on the income statement as:

Cost of Goods Sold.

Which of the following would be in the finished goods inventory of a company making ice cream?

Frozen ice cream that is waiting to be shipped to retailers.

At Ajax Company, goods billed by suppliers are compared to purchase orders and receiving reports before being paid. Which internal control procedure does this reflect?

Independent verification

The purchase of merchandise on account in a perpetual system is recorded with a debit to ________ and a credit to ________.

Inventory; Accounts Payable

Which of the following statements about internal control is not correct?

It guarantees that management will behave ethically

Which of the following statements regarding shrinkage is false?

It is easier to detect shrinkage in a periodic inventory system than in a perpetual inventory system.

Which of the following statements about The Sarbanes-Oxley Act is true?

Its primary purpose was to improve financial reporting and restore investor confidence

If inventory costs have been falling during the year, which cost method results in the highest gross profit for the year?

LIFO

Which of the following rules established by The Sarbanes-Oxley Act addresses the incentive component of the fraud triangle?

Management can be sentenced to jail terms up to 20 years for violations.

Which of the following elements of the fraud triangle is present when one employee both receives and deposits customer checks?

Opportunity

A company stores its unused checks in the vault. Which internal control procedure does this reflect?

Restrict access

Which element is not part of the fraud triangle?

Sustainability

The adjusting entry used to record the estimated bad debts in the period credit sales occur decreases:

both net income and net accounts receivable

A weak system of internal ______ provides the ______ to commit fraud.

controls; opportunity

Cost of goods sold is reported as a(n) ______ on the:

expense; income statement

Recording the estimate of bad debt expense:

follows the expense recognition ("matching") principle.

Under the periodic inventory system:

inventory must be counted at the end of each accounting period

FIFO uses the ________ cost for cost of goods sold on the income statement and the ________ cost for inventory on the balance sheet.

oldest; newest

The internal control principle related to assigning responsibilities so that one employee cannot make a mistake or commit a dishonest act without someone else discovering it is referred to as:

segregation of duties

When the allowance method is used, the entry to record the write-off of specific uncollectible accounts (step 2 of the allowance method) would decrease:

the Allowance for Doubtful Accounts account.

Goods placed in inventory are initially recorded at:

the amount paid to acquire the asset and prepare it for sale.

An objective of the expense recognition principle ("matching") is to have bad debt expense debited in:

the same period the related credit sales are recorded