Accounting Test 2

Windsor, Inc. purchased merchandise inventory with an invoice price of $16200 and credit terms of 2/13, n/30. What is the net cost of the goods if Windsor, Inc. pays within the discount period?

$15876

two companies report the same cost of goods available for sale but each employs a different inventory costing method. if the price of goods has increased during the period, then the company using

FIFO will have the highest ending inventory

A truck costing $66000 and on which $61000 of accumulated depreciation has been recorded was discarded as having no value. The entry to record this event would include a credit to Accumulated Depreciation for $66000. loss of $5000. gain of $5000. credit to Accumulated Depreciation for $61000.

loss of $5000

a characteristic of a plant asset is that it is

used in the operations of a business

Skysong, Inc. has the following inventory data: July 1 Beginning inventory30 units at $19 $570 7 Purchases 105 units at $20 2100 22 Purchases 15 units at $22 330 $3000 A physical count of merchandise inventory on July 30 reveals that there are 50 units on hand. Using the average cost method, the value of ending inventory is

$1000

Skysong, Inc. purchased merchandise inventory with an invoice price of $13100 and credit terms of 2/10, n/30. What is the net cost of the goods if Skysong, Inc. pays within the discount period?

$12838

Equipment with a cost of $883000 has an estimated salvage value of $55000 and an estimated life of 4 years or 18400 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used for 4600 hours?

$207000

Sheridan Company acquires land for $260000 cash. Additional costs are as follow. Removal of shed $2600 Filling and grading 7000 Salvage value of lumber of shed 1260 Broker commission 4570 Paving of parking lot 41000 Closing costs 5200 Sheridan will record the acquisition cost of the land as

$278110

Equipment was purchased for $150500. Freight charges amounted to $3500 and there was a cost of $22000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $34000 salvage value at the end of its 5-year useful life. Depreciation Expense each year using the straight-line method will be $35200. $25000. $28400. $23300.

$284000

An analysis and aging of the accounts receivable of Cheyenne Corp. at December 31 reveal these data: Accounts receivable $3170000 Allowance for doubtful accounts per books before adjustment (credit) 270000 Amounts expected to become uncollectible 327000 What is the cash realizable value of the accounts receivable at December 31 after adjustment?

$2843000

At December 31, 2022, Whispering Winds Corp. inventory records indicated a balance of $620000. Upon further investigation it was determined that this amount included the following: ▪ $127000 in inventory purchases made by Whispering shipped from the seller 12/27/22 terms FOB destination, but not due to be received until January 2nd ▪ $70000 in goods sold by Whispering with terms FOB destination on December 27. The goods are not expected to reach their destination until January 6 .▪ $7000 of goods received on consignment from Sandra Company What is Whispering's correct ending inventory balance at December 31, 2022?

$486000

A company sells a plant asset that originally cost $250000 for $100000 on December 31, 2022. The accumulated depreciation account had a balance of $100000 after the current year's depreciation of $25000 had been recorded. The company should recognize a $150000 loss on disposal. $25000 loss on disposal. $50000 gain on disposal. $50000 loss on disposal.

$50000 loss on disposal

Ivanhoe Company purchases a new delivery truck for $50000. The sales taxes are $3800. The logo of the company is painted on the side of the truck for $1200. The truck's annual license is $140. The truck undergoes safety testing for $280. What does Ivanhoe record as the cost of the new truck?

$55280

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $51000. If the balance of the Allowance for Doubtful Accounts is an $10200 debit before adjustment, what is the amount of bad debt expense for that period?

$61200

On January 15, Skysong, Inc. sells merchandise on account to Concord Associates for $7800 with terms 3/10, n/30. On January 20, Concord returns merchandise worth $800 to Skysong. On January 24, payment is received from Concord for the balance due. What is the amount of cash received?

$6790

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold 2 units for a total of $260 and used FIFO costing, the gross profit for the period would be

$85

Skysong, Inc. had the following records: 2022: Ending inventory $40650; COGS $317300 2021: Ending inventory $22490; Cost of goods sold $307000 What is Skysong's inventory turnover for 2022? (rounded)

10.1 times

The financial statements of the Concord Corporation report net sales of $122000 and accounts receivable of $40000 and $21000 at the beginning of the year and the end of the year, respectively. What is the accounts receivable turnover for Concord?

4.0 times

The following information was available for Bramble Corp. at December 31, 2022: beginning inventory $104000; ending inventory $102000; cost of goods sold $747780; and sales $1080000. Bramble days inventory turnover ratio in 2022 was (Use 365 days for calculation. Round intermediate calculation to 2 decimal places, e.g. 12.25.)

50.3 days

which of the following is not properly classified as property, plant, and equipment? a. a building used as a factory b. land used in ordinary business operations c. land improvements, such as parking lots and fences d. a truck held for resale by an automobile dealership

a truck held for resale by an automobile dealership

which of the following would probably be the most significant type of claim held by a company? a. non-trade receivables b. notes receivable c. interest receivable d. accounts receivable

accounts receivable

the term "receivables" refers to

amounts due from individuals or companies

goods held on consignment

are never owned by the consignee

when is a physical inventory usually taken?

at the end of the company's fiscal year

an assumption about cost flow is used

because prices usually change, and tracking which units have been sold is difficult

Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets? Cash needed to replace the plant asset. Salvage value. Cost. Estimated useful life.

cash needed to replace the plant asset

the account Allowance for Doubtful Accounts is classified as a(n)

contra account to Accounts Receivable

Depreciation is a process of asset valuation. cost accumulation. cost allocation. asset devaluation.

cost allocation

the figure for which of the following items is determined at a different time under the perpetual inventory method than under the periodic method?

cost of goods sold

The entry to record the receipt of payment within the discount period on a sale of $1600 with terms of 2/13, n/30 will include a

credit to accounts receivable for $1600

the entry to record the return of goods from a customer would include a

debit to sales returns and allowances

which of these would cause the inventory turnover ratio to increase the most? a. keeping the amount of inventory on hand constant but increasing sales b. keeping the amount of inventory on hand constant but decreasing sales c. decreasing the amount of inventory on hand and increasing sales d. increasing the amount of inventory on hand

decreasing the amount of inventory on hand and increasing sales

which of the following would not be charged to the equipment account? a. electricity used by the machine b. installation costs c. cost of trial runs d. freight costs

electricity used by the machine

under the allowance method, bad debt expense is recorded

for an amount that the company estimates it will not collect

which of the following should not be included in the physical inventory of a company? a. goods held on consignment from another company b. goods in transit from another company shipped FOB shipping point c. goods shipped on consignment to another company d. all of these answers should be included

goods held on consignment from another company

freight costs incurred by a seller on merchandise sold to customers will cause an increase

in operating expenses for the seller

Bonita's Market recorded the following events involving a recent purchase of inventory: Received goods for $77800, terms 2/9, n/30. Returned $1700 of the shipment for credit. Paid $300 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory: a. increased by $74878 b. increased by $74578 c. increased by $74872 d. increased by $76400

increased by $74878

if a purchaser using a perpetual inventory system pays thee transportation costs for goods purchased, then the

inventory account is increased

which of the following would not be classified as an "other receivable"? a. refundable income tax b. notes receivable c. advance to an employee d. interest receivable

notes receivable

Which of the following is not a component of the operating cycle? a. Purchase of merchandise b. payment of employees' salaries c. collection of cash from merchandise sales d. sale of merchandise

payment of employees' salaries

which is true about inventory systems? a. a periodic system requires cost of goods sold to be determined after each sale b. perpetual inventory systems require more detailed inventory records c. a perpetual system determines the cost of goods sold only at the end of each accounting period d. periodic inventory systems require more detailed inventory records

perpetual inventory systems require more detailed inventory records

generally, the revenue account for a merchandising enterprise is called

sales revenues or sales

the LIFO inventory method assumes that cost of the latest units purchased is

the first to be allocated to cost of goods sold

which statement is true for the seller? a. the sales return and allowances account is debited for defective merchandise by a customer b. the sales discount account is credited for defective merchandise returned by a customer c. the sales discount account is debited for defective merchandise by a customer d. the sales returns and allowances account is credited for defective merchandise returned by a customer

the sales return and allowances account is debited for defective merchandise returned by a customer