Accounting Final

Prinkle Corporation purchased equipment for $56,000 on January 1, 2016. On December 31, 2018, the equipment was sold for $23,000. Accumulated Depreciation as of December 31, 2018 was $32,000. Calculate gain or loss on the sale.

$1,000 loss

Which of the following amounts would be reported as Merchandise Inventory on the balance sheet of a company if the cost of an item is $120 and the current replacement cost is $100?

$100

An asset was purchased for $36,000 on January 1, 2016. The asset's estimated useful life was five years, and its residual value was $4,000. The straight-line method of depreciation was used. Calculate the gain or loss if the asset is sold for $18,000 on December 31, 2016, the last day of the accounting period.

$11,600 loss

On January 1, Davidson Services has the following balances: Accounts Receivable $21,000 Bad Debts Expense $0 Davidson has the following transactions during January: Credit sales of $150,000, collections of credit sales of $83,000, and write-offs of $20,000. Davidson uses the direct write-off method. The amount of Bad Debts Expense for January is ________. Do not round until the final answer. Then round to the nearest whole dollar.

$20,000

Danube Corp. purchased a used machine for $21,000. The machine required installation costs of $6,000 and insurance while in transit of $700. At which of the following amounts would the machine be recorded?

$27,700

An invoice of $800 for merchandise purchased is showing 2/15, n/30 as terms of credit. If the invoice is paid on or before the fifteenth day, the amount to be paid is ________.

$784

A truck costs $320,000 and is expected to be driven 116,000 miles during its five-year life. Residual value is expected to be zero. If the truck is driven 29,000 miles during the first year, how much depreciation should the business record under the units-of-production method? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

$80,040

A company received a bank statement showing a balance of $78,000. Reconciling items included outstanding checks of $2,400 and a deposit in transit of $9,400. What is the company's adjusted bank balance?

$85,000

A company purchased 400 units for $20 each on January 31. It purchased 520 units for $26 each on February 28. It sold a total of 560 units for $40 each from March 1 through December 31. What is the amount of ending inventory on December 31 if the company uses the first-in, first-out (FIFO) inventory costing method? (Assume that the company uses a perpetual inventory system.)

$9,360

What does "2/10" mean, with respect to "credit terms of 2/10, n/30"?

A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date.

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

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 statements is true of the direct write-off method? It is only suitable for small companies that have very few uncollectible receivables. It results in more accurate net income than any other method. It provides better matching of revenues with expenses. GAAP requires public companies to follow the direct write-off method.

It is only suitable for small companies that have very few uncollectible receivables.

Which of the following is a characteristic of a plant asset, such as a building? It is available for sale to customers in the ordinary course of business. It has a short useful life. It will have a negligible value at the end of its useful life. It is used in the operations of a business.

It is used in the operations of a busines

Which of the following assets must be reported at the lower-of-cost-or-market value?

Merchandise Inventory

Which of the following statements is true? Notes receivable usually have longer collection terms than accounts receivable. Accounts receivable are liabilities. Notes receivable are always classified as current assets. Accounts receivable are more liquid than cash.

Notes receivable usually have longer collection terms than accounts receivable.

Under the direct write-off method, which of the following is included in the entry to write off an uncollectible account? a credit to the customer's Account Receivable No entry is made to write off uncollectible accounts. a debit to Allowance for Uncollectible Accounts a credit to the Allowance for Bad Debts

a credit to the customer's Account Receivable

Under the direct write-off method, the entry to write off an uncollectible account will include ________.

a debit to Bad Debts Expense account

Which of the following entries would be made to record the purchase of inventory on account, if a company uses the perpetual inventory system?

a debit to Merchandise Inventory and a credit to Accounts Payable

A photocopier cost $95,000 when new and has accumulated depreciation of $90,000. If the business discards this plant asset, the result is ________.

a loss of $5,000

If goods are sold on terms FOB shipping point, the ________.

buyer normally pays the transportation costs

Which is the most liquid form of asset?

cash

Gross profit is calculated as the difference between net sales revenue and ________.

cost of goods sold

When a company is using the direct write-off method, and an account is written off, the journal entry consists of a ________.

credit to Accounts Receivable and a debit to Bad Debts Expense

Which one of the following items requires an adjustment on the bank side of the bank reconciliation?

deposits in transit

Under the weighted-average method for inventory costing, the cost per unit is determined by ________

dividing the cost of goods available for sale by the number of units available

Which of the following depreciation methods allocates a higher amount of depreciation in earlier years than in later years?

double-declining balance method

Under which of the following inventory costing methods is the ending inventory based on the costs of the most recent purchases?

first-in, first-out

Corel Sales sold its old office furniture for $6,000. The original cost was $12,000, and at the time of sale, accumulated depreciation was $8,000. What is the effect of this transaction?

gain of $2,000

The term "inventory," for a merchandiser, refers to ________.

goods held for sale to customers

Which of the following inventory costing methods results in the lowest value of ending inventory during a period of rising inventory costs?

last-in, first-out

When a check is issued, the party being paid the cash is referred to as the ________.

payee

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

physical count

The expected cash value of an asset at the end of its useful life is known as ________.

residual value

Which of the following depreciation methods allocates a varying amount of depreciation each year based on an asset's usage?

units-of-production method

Which of the following inventory costing methods requires the calculation of a new average cost after each purchase?

weighted-average