AC 210 test 2

The ending balance in the Allowance for Doubtful Accounts for the period.

For many years, Carefree Company has estimated Bad Debt Expense using the aging of accounts receivable method. Assuming Carefree has no write-offs or recoveries, its estimate of uncollectible receivables resulting from the aging analysis equals

The amount paid to acquire the assets and prepare it for sale

Goods placed in inventory are initially recorded at:

Interest Revenue of $5,000 will be recorded in 2018

If a 5 percent note receivable for $100,000 is created on January 1, 2018, and it has a maturity date of December 31, 2021,

receivable collections slowed down

If the receivables turnover ratio decreased during the year,

all of the above

In 2016, Coca-Cola Bottling had a receivables turnover ratio of 11.5. Which of the following actions could Coca-Cola take to cause the ratio to increase? -Pursue collections more aggressively. -Increase the percentages used to estimate bad debts. -Factor its receivables. -all of the above

5,200

Jim Inc. had been selling products for 40 per unit, but recently lowered the selling price to 30 per unit. The company current assets consist of 200 units purchased at 32 per unit, the market value for this is currently 26 per unit. at what amount should the inventory be reported on the balance sheet?

the ratio will increase

This year your company has purchased less expensive merchandise inventory but has not changed its selling prices. What effect will this change have on the company's gross profit percentage this year, in comparison to last year?

17,838

Urban Bloom INC. books show an ending cash balance of 18,000 before preparing the bank reconciliation. Given the bank reconciliation shows outstanding checks of 5,400, deposits in transit of 3,600, NSF check of 180, and interest earned on the bank account of 18, the company up to date ending cash balance equals?

-Counteract Incentives -Reduce Opportunity -Encourage Good Character

What are the three parts of the Sarbanes-Oxley Act?

receiving report

What document signals that a company should record the purchase of goods on account?

To improve financial reporting and restore investor confidence

What was the main goal of the Sarbanes-Oxley Act?

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:

Specific Identification

Which inventory method is typically used when accounting for expensive and unique inventory items?

LIFO

Which inventory method provides a better matching of current costs with sales revenue on the income statement but also results in older values being reported for inventory on the balance sheet?

cash can be combined with cash equivalent

Which of the following correctly describes how to report cash?

BI + P − EI = CGS

Which of the following correctly expresses the cost of goods sold equation, as used in a periodic system?

document procedure

Which of the following internal control principles underlies the requirement that all customers be given a sales receipts

Goods Available for Sale

Which of the following is not a name for a specific type of inventory?

Cost of Goods Sold is $600.

the beginning inventory is 200and purchase are 800, and ending inventory is 400. What is cost of goods sold?

inventory must be counted at the end of each accounting period.

under the periodic inventory system:

cost of goods sold

what does not affect net sale?

Cost of goods sold

what item would be found on a merchandisers income statement but not a service?

Total assets decrease and stockholders' equity decreases.

when using the allowance method, as bad debt expense is recorded

Sustainability

which element is not part of the fraud triangle? Sustainability incentive rationalization oppurtunity

Opportunity

which element of the fraud triangle is present when one employee both receives and deposits customer checks?

restricted access

which internal control is it where a company stores its unused checks in a vault?

Inventory; accounts payable

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

Higher; Lower

1. When costs to purchase inventory are rising, using LIFO leads to reporting ______ cost of goods sold and ______ net income than FIFO.

FIFO

1. Which inventory costing method uses the oldest cost for cost of goods sold on the income statement and the newest cost for inventory on the balance sheet?

8,900

200 units @15 300 units @16 200 units @17 400 units @18 There are 500 units in ending inventory. What is the amount of the ending inventory using the FIFO?

882

A $1,000 sale is made on May 1 with terms 2/30, n/60. Items with a $100 selling price are returned on May 3. What amount, if received on May 9, will be considered payment in full?

Specific Identification

A New York bridal dress designer that makes high-end custom wedding dresses and needs to know the exact cost of each dress most likely uses which inventory costing method?

32

A company bundles a product and service that separately sell for $40 and $60, respectively. If the bundled price is $80, how much revenue is recognized for delivering the product?

receiving report

A company indicates the condition of goods obtained on which of the following documents?

5,733

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

decrease by 300

All else equal, if VFC incurs a 3 percent fee to factor $10,000 of its Accounts Receivable, its Net Income will

not affect expense in 2019

Cambridge Co. uses the allowance method. during January 2019. Cambridge writes of 640 customer account balance when it becomes clear the customer will never pay. the entry to record the write off will:

2,310

Lux Company uses a periodic inventory system. The company started the month with 20 lamps in its beginning inventory that cost $30 each. During the month, Lux purchased 80 additional lamps for $31 each. At the end of the month, Lux counted its inventory and found that 25 lamps remained unsold. If Lux uses the weighted average cost method, its cost of goods sold for the month is

debt accounts receivable, and credit sales revenue for 1,198; debit cost of good sold and credit inventory for 790

Mitchell uses a perpetual inventory system. Mitchell sells a computer from inventory for 1,198 on credit. Mitchell originally bought the computer from IBM for 790. What journal entry will Mitchel prepare to record the sale?

3,780

Mountain Made uses a periodic inventory system. The company started the month with 3 quilts in its beginning inventory that cost $200 each. During the month, Mountain Made purchased 20 additional quilts for $210 each. At the end of the month, Mountain Made counted its inventory and found that 5 quilts remained unsold. If Mountain Made uses LIFO periodic, its cost of goods sold for the month is

Retail Merchandisng

Mountain gear Inc. buys bikes, tents and hiking supplies from rugged rock corp. fro sale to customers. what kind of company is Mountain Gear Inc.?

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

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?

16,100

Orbit Inc. has sales of 28,000, beginning inventory of 3,500, purchases of 17,500 and ending inventory of 4,900. the cost of goods sold is?

shrinkage

Perpetual inventory systems can help managers detect

6,000

Queen's Shoe 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?

2 percent discount for payment received within 10 days or the full amount (less returns) is due within 30 days

Sales discounts with terms 2/10, n/30 mean

890

The Shook 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?

segregation of duties

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

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

Which of the following rules established by The Sarbanes-Oxley Act addresses the incentive component of the fraud triangle? a. Companies must adopt a code of ethics covering the top executives. b. Management can be sentenced to jail terms up to 20 years for violations. c. Companies must adopt of a whistleblower protection system. d. Companies must establish an audit committee of independent directors. All of the above.

Outstanding checks

Which of the following situations would cause the balance per bank to be more than the balance per books? -deposites in transit -service charges -outstanding checks -checks from customers returned as NSF

2,500

Windsor Inc, uses a perpetual inventory system, and reported 250,000 of inventory at the beginning of the month based on a physical count of inventory. during the month, the company bought 22,500 of inventory and sold inventory that had a cost of 15,000. at the end of the month, the physical count of inventory shows 255,000 on hand. how much is the shrinkage?

100

a company that purchase 10,000 worth of inventory on terms 2/130, N/60 but returns half of the inventory but pays in the discount period. how much discount would they receive?

Controls; opportunity

a weak system of internal _____ provides the ____ to commit fraud.

Indicates a shorter time span between the purchase and sale of inventory.

an increasing inventory ratio

shrinkage

another term for inventory loss due to theft, error, or fraud

Independent verification

at Ajax company, goods billed by suppliers are compared to purchase orders and receiving reports before being paid. which internal control does this reflect?

shrinkage

detected by comparing the balance in the inventory ledger account and the results of the physical inventory count.

Assets and expenses

each period, the cost of goods available for sale is allocated between?

15,000

f the Allowance for Doubtful Accounts opened with a $10,000 credit balance, had write-offs of $5,000 (with no recoveries) during the period, and had a desired ending balance of $20,000 based on an aging analysis, what was the amount of Bad Debt Expense?