exam 2 mc

The interest on a 3 month, 12%, $6,000 note receivable is

$180

binary company has a beginning balance in its inventory account of $2250 and the ending balance is $1,500. cost of goods sold is $9750. according to the cost of goods sold model, what was the amount of inventory purchased during the year

$750

if the company uses LIFO inventory costing method, ending inventory at June 30th is?

1811.75

the company uses the LIFO inventory costing method, cost of goods sold June 5 is?

1820

if the company uses the FIFO inventory costing method, amount of ending inventory reported on the balance sheet is?

1823.75

if the company uses the FIFO inventory costing method, cost of goods sold for the month of June is?

2538

`if the company uses LIFO inventory costing method, cost of goods sold for June 24th is?

730

Which of the following is not included in cash and cash equivalents on a company's balance sheet

A bank certificate of deposit for one year

Which of the following items on a bank reconciliation would require a journal entry on the company's books?

A bank service charge

Under the allowance method, the entry to write-off a $1,425 uncollectable account includes

A debit to allowance for doubtful account for $1,425

Which of the following journal entries is recorded as a result of the bank reconciliation process to record a NSF check for $250

Accounts receivable 250 Cash 250

Which of the following statements is true regarding the 2 allowance procedures used to estimate bad debts

Aging of accounts receivable method takes into account the existing balance in the allowance for doubtful accounts account

The lower of cost or market method of accounting for inventories follows the convention of

Conservatism

The matching rule related to credit losses by stating the bad debt expense should be recorded

In the same time period that the revenue is recorded

Under the perpetual inventory system, in addition to making the entry to record a sale, a company would

Increase cost of goods sold and decrease merchandise inventory

In a period of rising prices, which inventory method is best to use to reduce income taxes by refunding net income

LIFO

A traditional definition of internal control specifically includes all of the following features except

Maintenance of a clean and safe workplace

Which of the following does not represent a sales

Merchandise placed aside for a customer who plans to come in next week and pay with cash

a check returned by a bank because the issue is cash account balance could not cover the check is called_____?

NSF check

When applying the lower of cost or market rule to inventory valuation, market generally means

Replacement cost

Which internal control activity is followed when inventory storage areas are secured with limited access

Safeguarding of assets and records

Jane manages the physical inventory in the warehouse and she also maintains the accounting records of the inventory held there. Which of the following internal control activities have been violated?

Segregation of duties

Which one of the approaches for the allowance procedure emphasizes the net realizable value of accounts receivable on the balance sheet

The aging of accounts receivable method

When the FIFO method is used, ending inventory is assumed to consist of..

The most recently purchased units

which of the following statement best describes the term outstanding checks from a company point of view?

a check written by the company but not yet presented to the bank for payment

under the allowance method, the entry to write off a $1425 uncollectible account includes:

a debit to allowance for doubtful accounts for $1425; credit accounts receivable for 1425

If a company records a check they wrote as $729 when it should have been recorded as being written for $279, which of the following must occur when reconciling its bank statement

add $450 to the company records

if a company recorded a check they wrote as $729 when it is should have been recorded as being written for $279, which of the following must occur when reconciling its bank statement?

add $450 to the company records

On the bank reconciliation, interests earned on a checking account should be

added to the balance per books

paden company purchased merchandise from emitt with freight terms of FOB shipping point. the freight cost will be paid by?

buyer

a physical count of inventory is required even though the company is a perpetual inventory system. This is an example of the following internal control company activities?

checks on recorded accounts

one employee or department should verify the work of another. this is an example of which of the following internal control activities

checks on recorded amounts

the account allowance for doubtful accounts is classified as?

contra account to accounts receivable

The account allowance for uncollectable accounts is classified as a(n)

contra-account to accounts receivable

which of the following best describes "cost of goods available for sale"?

cost of goods available for sale is allocated into the cost of ending inventory and cost of goods sold

The collection of $1,000 account after the 2% discount. Would result in a(n)

decrease to accounts receivable for $1000

the primary purpose of internal controls is managing a business is to:

ensure that employees operating within the scope of their assigned responsibilities and act in the best interest of business

the matching rule relates to credit losses by stating that bad debt expense should be recorded ______?

in the same time period that the revenue is recorded

The collection of a $400 account within the 2% discount period would result in a

increase to sales discounts for $8

which of the following is an example of a credit memo?

notice of interest earned on checking account

Which of the following would be deducted from the balance per bank

outstanding checks

All of the following are inventory costing methods except

periodic

Which of the following is not an internal control activity for cash?

record keeping and physical custody of cash should be performed by the same person

sales returns and sales allowances are both designed to_________, however, with a sales allowance, __________?

satisfy a customer who found the product unsatisfactory; customer keeps product

collusion is an intentional act of two or more employees to accomplish theft of company assets. which control activity is designed to make fraud less likely because it requires collusion among employee?

segregation of duties

Merchandise inventory becomes part of cost of goods sold when a company

sells the inventory

which of the following statements is true regarding the two allowance procedures used to estimate bad debt?

the aging of accounts receivable method takes into account the existing balance in the allowance for doubtful accounts

If a company erroneously records a $500 deposit as $50 in its records, which of the following must occur when reconciling its bank statement

the company must increase the balance per its records by $450

which of the following is false?

the cost of goods sold account is updated after each sale of merchandise under the periodic inventory system

coffski Inc. sold merchandise to a customer on credit. the invoice amount was $1000; the invoice account was $1000; the invoice date is June 10th; credit terms were 1/10, n/30. Which of the following statements is true?

the customer should pay $990 if the invoice is paid on June 15th