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In a perpetual inventory system:

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Answers for 25 questions.;1. Answers for 25 questions.;1. In a perpetual inventory system;a. Merchandise Inventory is debited every time inventory is purchased;b. cost of Goods Sold is debited every time inventory is sold;c. a physical inventory is taken at least annually;d. All of the above.;2. Under the perpetual inventory system, the purchase of merchandise is recorded by a debit to;a. Merchandise Inventory, credit to Accounts Payable or Cash;b. Cost of Goods Sold, credit to Accounts Payable;c. Purchases, credit to Accounts Payable;d. Accounts Payable, credit to Purchases;3. Individual inventory items are tracked in the;a. accounts receivable ledger;b. inventory ledger;c. accounts payable ledger;d. purchases journal;4. Which of the following goods should Pin Department Store include in its December 31 count?;a. goods held on consignment from ABC Wholesale;b. goods sold and shipped to Gray Brothers, in-transit F.O.B shipping point;c. goods that have been consigned to Dalton Brothers;d. goods in transit purchased F.O.B. destination point;5. St. Paul Corporation has a normal gross profit of 45%. The current year?s beginning inventory;was $2,500, purchases were $9,000, and retail sales were $15,000. The estimated ending;inventory under the gross profit method is;a. $4,750;b. $3,250;c. $8,220;d. $4,050;6. An overstatement of ending inventory in one period results in;a. an overstatement of net income for the next period;b. no effect on net income for the next period;c. an overstatement of the ending inventory for the next period;d. an understatement of net income for the next period;7. The full disclosure principle says that if a change is made;a. the company should disclose the change;b. the effects of the change on profit and inventory valuation should be disclosed;c. the company should show justification for the change in a footnote on the financial;reports;d. All of the above.;8. Costs and assessments that should be charged to the land account include;a. streets;b. parks;c. flood prevention;d. All of the above.;9. Which of the following assets would not be classified as property, plant, and equipment?;a. delivery truck;b. copyright;c. land;d. furniture;10. The amount to include in the entry to record the cost of a property, plant, and equipment asset;would include;a. acquisition cost;b. freight;c. installation;d. All of the above.;11. The depreciation method that does not base the expense on the passage of time but on the;level of use is;a. units-of-production;b. straight-line;c. modified accelerated cost recovery;d. double-declining-balance;12. Which depreciation method does not deduct residual value when computing depreciation;expense?;a. units-of-production;b. straight-line;c. double-declining-balance;d. a and b only;13. What would be the depreciation expense in year 1, using units-of-production, for a molding;machine that cost $18,000, had a useful life of 3 years, and an estimated total machine hours;of 36,000? The salvage value is $3,000 and production in year 1 was 10,000 hours.;a. $5,000;b. $4,167;c. $6,000;d. $2,167;14. The articles of incorporation are submitted by the incorporators to the;a. IRS for approval;b. Office of the Secretary of State for approval;c. Securities and Exchange Commission for approval;d. Governor of the State for approval;15. Characteristics of a corporation include;a. stockholders having unlimited liability;b. direct management by the stockholders;c. stockholders having limited liability;d. choosing a board of directors;16. The entry to record selling 150 shares of no-par common stock with a stated value of $30 for;$40 would be to;a. debit Common Stock for $6,000, credit Cash for $6,000;b. debit Cash for $6,000, credit Common Stock for $6,000;c. debit Cash for $6,000, credit Common Stock for $4,500, credit Paid-In Capital in;Excess of Stated Value-Common for $1,500;d. debit Cash for $6,000, credit Common Stock for $4,500, credit Paid-In Capital in;Excess of Par Value-Common for $1,500;17. No entry was recorded for the exchange of stock for land. This error would cause;a. the period end stockholders? equity to be understated;b. the period end stockholders? equity to be overstated;c. the period?s net income to be understated;d. a and c only;18. Sunrise Online issued 500 shares of its $10 common stock in exchange for equipment with a;fair market value of $7,500. The entry to record the transaction would include a;a. debit to Equipment for $5,000;b. debit to Common Stock for $5,000;c. credit to Paid-in Capital in Excess of Par Value for $2,500;d. credit to Common Stock Subscribed for $5,000;19. Dolly?s Best issued 200 shares of its $10 common stock in exchange for used packaging;equipment with a fair market value of $2,400. The entry to record the acquisition of the;equipment would include a;a. debit to Equipment for $2,000;b. debit to Paid-in Capital in Excess of Par for $400;c. credit to Common Stock for $2,400;d. debit to Equipment for $2,400;20. A statement comparing data from two or more consecutive periods is called a;a. comparative balance sheet;b. comparative income statement;c. common-size statement;d. a and b only;21. In a comparative balance sheet, the ending Cash for 2012 was $315,000 and is $270,000;for 2013. The net increase or decrease from 2012 to 2013 is;a. 86.0%;b. 14.3%;c. 26.4%;d. 16.7%;22. Liquidity ratios measure;a. how effectively a company is using its equity;b. how effectively a company is using its liabilities;c. a company?s ability to pay shareholders;d. a company?s ability to pay off short-term debts;23. Debt management ratios measure;a. how effectively a company is using its cash;b. how well a company is using debt versus equity position;c. a company?s ability to earn profit;d. a company?s ability to meet payable obligations;24. If the average collection period is 35 days, this means;a. from the date of purchase to the date of payment is 35 days;b. from the date of sale to the date of receipt of payment is 35 days;c. from the date of discount to the date of receipt of payment is 35 days;d. None of the above.;25. The inventory turnover ratio calculates;a. how many times the inventory turns over in one period;b. number of times inventory is purchased in one period;c. the dollar amount of change in inventory in one period;d. None of the above.;Additional Requirements;Min Pages: 1;Level of Detail: Only answer needed;Other Requirements: 1. In a perpetual inventory system

 

Paper#20840 | Written in 18-Jul-2015

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