Indicate whether the following statements are true or false

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Description

Quiz




Indicate whether the following
statements are true or false.



Question 1 (4 points)




One advantage to using a
perpetual inventory system is that the company never has to physically count
the inventory.



Question 1 options:




True

False



Question 2 (4 points)




The weighted-average inventory
method will likely result in neither the highest nor the lowest ending
inventory.



Question 2 options:




True

False



Question 3 (4 points)




When calculating accounts
receivable turnover, a company would prefer a higher number rather than a lower
number (within reason).



Question 3 options:




True

False



Question 4 (4 points)




When performing a bank
reconciliation, checks outstanding are added back to the bank balance.



Question 4 options:




True

False



Question 5 (4 points)




Usually the quick ratio will be a
lower number than the current ratio.



Question 5 options:




True

False




Multiple Choice


Select the best answer for each
of the following questions.



Question 6 (4 points)




The bad-debt method that uses the
accounts receivable aging report is _______________.



Question 6 options:






the bad-debt expense method

the percentage-of-sales method

the percentage-of-receivables
method

the direct write-off method



Question 7 (4 points)




When it is determined that too
much money has been set aside for uncollectible accounts, we will
_______________.



Question 7 options:






debit accounts receivable

credit cash

debit reserve for uncollectible
accounts

credit reserve for
uncollectible accounts



Question 8 (4 points)




A customer whose account was
previously written off unexpectedly pays us. If we are using the allowance
method we would _______________.



Question 8 options:






debit bad-debt expense and
credit cash

debit accounts receivable and
credit allowance for uncollectible accounts AND debit cash and credit
accounts receivable

debit cash and credit bad-debt
expense

debit reserve for uncollectible
accounts and credit cash



Question 9 (4 points)




When a retailer accepts a bank
card (VISA or MasterCard), they will make what entry for the day’s receipts?



Question 9 options:






debit accounts receivable;
credit sales, and credit “credit card expense”

debit cash and debit “credit
card expense”; credit sales

debit cash and credit sales

debit accounts receivable and
credit sales



Question 10 (4 points)




The company prepares, but does
not yet pay, its first payroll of the new year. Salaries total $10,000 and
7.65% is withheld from paychecks for FICA tax. Ignore all other payroll
deductions. The journal entries will be _______________.



Question 10 options:






debit wage expense $10,000 and
debit payroll tax expense $765; credit wages payable $9,235 and credit FICA
tax payable $1,530

debit wage expense $10,000;
credit wages payable $8,470 and FICA tax payable $1,530

debit wage expense $10,000 and
credit wages payable 10,000; debit payroll tax expense for $1,530 and credit
FICA tax payable $1,530

debit wage expense $10,000 and
credit wages payable $10,000; debit payroll tax expense for $765 and credit
FICA tax payable $765



Question 11 (4 points)




A company buys a $10,000 bond at
102 as an investment. The correct entry is _______________.



Question 11 options:






credit investment in bonds and
debit cash for $9,800

debit investment in bonds and
credit cash for $9,800

credit investment in bonds and
debit cash for $10,200

debit investment in bonds and
credit cash for $10,200



Question 12 (4 points)




A company issues bonds having a stated
value of $100,000 for $102,500. At maturity, the company will _______________.



Question 12 options:






credit bonds payable for
$100,000

debit bonds payable for
$102,500

credit bonds payable for
$102,500

debit bonds payable for
$100,000



Question 13 (4 points)




A company uses the
percentage-of-receivables method for establishing the bad-debt reserve. They
want the reserve balance to equal 0.5% of debts 30 days old or less, 2% of
debts aged 31 to 60 days, and 4% of debts aged over 60 days. An aging report
shows $780,000 relating to the past month, $232,600 relating to the prior
month, and $89,200 relating to more than two months ago. The balance in the
reserve account before adjustment is $10,175. What is the adjusting journal
entry?



Question 13 options:






debit bad-debt expense, credit
allowance for bad debts $12,120

debit allowance for bad debts,
credit bad-debt expense $1,945

debit bad-debt expense, credit
accounts receivable $1,945

debit bad-debt expense, credit
allowance for bad debts $1,945



Question 14 (4 points)




A company is closing out the
accounting period. The inventory balance at the beginning of the period was
$222,750, and at the end of the period it was $215,600. Purchases of goods for
resale during the period equaled $682,500. What was the cost of goods sold
total?



Question 14 options:






$682,500

$675,350

$689,650

$905,250



Question 15 (4 points)




The following transactions during
the month of January: 1/5 bought 10 units at $11.00 each; 1/8 bought 15 units
at $11.25 each; 1/15 sold 8 units for $16 each; 1/22 bought 10 units at $11.50
each and sold 12 units for $16.50 each. The ending inventory is $693.75. What
inventory costing method is the company using?



Question 15 options:






LIFO – periodic

weighted average

LIFO – perpetual

FIFO



Short Answer


Prepare the following journal
entries. Dates and descriptions are not required.



Question 16 (4 points)




What is the difference between
the periodic-inventory and perpetual-inventory methods?



Question 17 (4 points)



Name two
costs, in addition to the purchase price, that are added to merchandise
inventory cost.



Question 18 (4 points)



What will be the result to
inventory values, cost of goods sold, and net income if the LIFO method is used
during times of inflation?



Question 19 (4 points)



When comparing financial ratios,
it is important to make comparisons only within an industry or between like
companies. Why might a retail store have a much higher accounts receivable
turnover than a manufacturing company?



Question 20 (4 points)



How is gross margin or gross
profit calculated on a merchandizing company income statement?



Question 21 (4 points)



If a retail store has a sale with
everything listed at 30% off, and a rack of clothing is also marked as “an
additional 20% off,” what is the total discount offered?



Question 22 (4 points)



What does 1/10, n/30 mean?



Question 23 (4 points)



What cash control is compromised
when the purchasing manager is one of the authorized check signers?



Question 24 (4 points)



Name at least three out of the
four documents that the accounting department should have access to in order to
pay an invoice.



Question 25 (4 points)



What item from the company’s
records must be added to the bank balance when reconciling the bank statement?


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Indicate whether the following statements are true or false

$19.00

Description

Quiz




Indicate whether the following
statements are true or false.



Question 1 (4 points)




One advantage to using a
perpetual inventory system is that the company never has to physically count
the inventory.



Question 1 options:




True

False



Question 2 (4 points)




The weighted-average inventory
method will likely result in neither the highest nor the lowest ending
inventory.



Question 2 options:




True

False



Question 3 (4 points)




When calculating accounts
receivable turnover, a company would prefer a higher number rather than a lower
number (within reason).



Question 3 options:




True

False



Question 4 (4 points)




When performing a bank
reconciliation, checks outstanding are added back to the bank balance.



Question 4 options:




True

False



Question 5 (4 points)




Usually the quick ratio will be a
lower number than the current ratio.



Question 5 options:




True

False




Multiple Choice


Select the best answer for each
of the following questions.



Question 6 (4 points)




The bad-debt method that uses the
accounts receivable aging report is _______________.



Question 6 options:






the bad-debt expense method

the percentage-of-sales method

the percentage-of-receivables
method

the direct write-off method



Question 7 (4 points)




When it is determined that too
much money has been set aside for uncollectible accounts, we will
_______________.



Question 7 options:






debit accounts receivable

credit cash

debit reserve for uncollectible
accounts

credit reserve for
uncollectible accounts



Question 8 (4 points)




A customer whose account was
previously written off unexpectedly pays us. If we are using the allowance
method we would _______________.



Question 8 options:






debit bad-debt expense and
credit cash

debit accounts receivable and
credit allowance for uncollectible accounts AND debit cash and credit
accounts receivable

debit cash and credit bad-debt
expense

debit reserve for uncollectible
accounts and credit cash



Question 9 (4 points)




When a retailer accepts a bank
card (VISA or MasterCard), they will make what entry for the day’s receipts?



Question 9 options:






debit accounts receivable;
credit sales, and credit “credit card expense”

debit cash and debit “credit
card expense”; credit sales

debit cash and credit sales

debit accounts receivable and
credit sales



Question 10 (4 points)




The company prepares, but does
not yet pay, its first payroll of the new year. Salaries total $10,000 and
7.65% is withheld from paychecks for FICA tax. Ignore all other payroll
deductions. The journal entries will be _______________.



Question 10 options:






debit wage expense $10,000 and
debit payroll tax expense $765; credit wages payable $9,235 and credit FICA
tax payable $1,530

debit wage expense $10,000;
credit wages payable $8,470 and FICA tax payable $1,530

debit wage expense $10,000 and
credit wages payable 10,000; debit payroll tax expense for $1,530 and credit
FICA tax payable $1,530

debit wage expense $10,000 and
credit wages payable $10,000; debit payroll tax expense for $765 and credit
FICA tax payable $765



Question 11 (4 points)




A company buys a $10,000 bond at
102 as an investment. The correct entry is _______________.



Question 11 options:






credit investment in bonds and
debit cash for $9,800

debit investment in bonds and
credit cash for $9,800

credit investment in bonds and
debit cash for $10,200

debit investment in bonds and
credit cash for $10,200



Question 12 (4 points)




A company issues bonds having a stated
value of $100,000 for $102,500. At maturity, the company will _______________.



Question 12 options:






credit bonds payable for
$100,000

debit bonds payable for
$102,500

credit bonds payable for
$102,500

debit bonds payable for
$100,000



Question 13 (4 points)




A company uses the
percentage-of-receivables method for establishing the bad-debt reserve. They
want the reserve balance to equal 0.5% of debts 30 days old or less, 2% of
debts aged 31 to 60 days, and 4% of debts aged over 60 days. An aging report
shows $780,000 relating to the past month, $232,600 relating to the prior
month, and $89,200 relating to more than two months ago. The balance in the
reserve account before adjustment is $10,175. What is the adjusting journal
entry?



Question 13 options:






debit bad-debt expense, credit
allowance for bad debts $12,120

debit allowance for bad debts,
credit bad-debt expense $1,945

debit bad-debt expense, credit
accounts receivable $1,945

debit bad-debt expense, credit
allowance for bad debts $1,945



Question 14 (4 points)




A company is closing out the
accounting period. The inventory balance at the beginning of the period was
$222,750, and at the end of the period it was $215,600. Purchases of goods for
resale during the period equaled $682,500. What was the cost of goods sold
total?



Question 14 options:






$682,500

$675,350

$689,650

$905,250



Question 15 (4 points)




The following transactions during
the month of January: 1/5 bought 10 units at $11.00 each; 1/8 bought 15 units
at $11.25 each; 1/15 sold 8 units for $16 each; 1/22 bought 10 units at $11.50
each and sold 12 units for $16.50 each. The ending inventory is $693.75. What
inventory costing method is the company using?



Question 15 options:






LIFO – periodic

weighted average

LIFO – perpetual

FIFO



Short Answer


Prepare the following journal
entries. Dates and descriptions are not required.



Question 16 (4 points)




What is the difference between
the periodic-inventory and perpetual-inventory methods?



Question 17 (4 points)



Name two
costs, in addition to the purchase price, that are added to merchandise
inventory cost.



Question 18 (4 points)



What will be the result to
inventory values, cost of goods sold, and net income if the LIFO method is used
during times of inflation?



Question 19 (4 points)



When comparing financial ratios,
it is important to make comparisons only within an industry or between like
companies. Why might a retail store have a much higher accounts receivable
turnover than a manufacturing company?



Question 20 (4 points)



How is gross margin or gross
profit calculated on a merchandizing company income statement?



Question 21 (4 points)



If a retail store has a sale with
everything listed at 30% off, and a rack of clothing is also marked as “an
additional 20% off,” what is the total discount offered?



Question 22 (4 points)



What does 1/10, n/30 mean?



Question 23 (4 points)



What cash control is compromised
when the purchasing manager is one of the authorized check signers?



Question 24 (4 points)



Name at least three out of the
four documents that the accounting department should have access to in order to
pay an invoice.



Question 25 (4 points)



What item from the company’s
records must be added to the bank balance when reconciling the bank statement?


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Be the first to review “Indicate whether the following statements are true or false”

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