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Acc201 module 6 exam




Question;Piere;Imports uses the perpetual system in accounting for merchandise inventory and;had the following transactions during the month of October.;Oct.;2;Purchased;merchandise at a $5,600 price, invoice dated October 2, terms 3/10, n/30.;10;Received;a $800 credit memorandum (at full invoice price) for the return of;merchandise that it purchased on October 2.;17;Purchased;merchandise at a $6,000 price, invoice dated October 16, terms 2/10, n/30.;26;Paid;for the merchandise purchased on October 17, less the discount.;31;Paid;for the merchandise purchased on October 2. Payment was delayed because the;invoice was mistakenly filed for payment today. This error caused the;discount to be lost.;1.;value:10.00 points;(a);Prepare;entries to record the above transactions assuming that Piere Imports;records invoices at gross amounts.;2.;value:10.00 points;(b);Prepare;entries to record the above transactions assuming that Piere Imports;records invoices at net amounts.;3.;value:2.00 points;The impact of technology on internal controls includes which of the;following?;Reduced processing errors.;Elimination of the need for regular audits.;Elimination of the need to bond employees.;More efficient separation of duties.;Elimination of fraud.;4.;value:2.00 points;Which of;the following are risks of e-commerce?;Firewalls, fraud, and computer viruses.;Encryption, stolen credit card numbers, and fraud.;Stolen credit card numbers, computer viruses, and impersonation.;Computer viruses, encryption, and stolen credit card numbers.;Impersonation, encryption, and firewalls.;5.;value:2.00 points;A good;system of internal control;Urges adherence to prescribed managerial policies.;Insures profitable operations.;Eliminates the need for an audit.;Requires the use of noncomputerized systems.;Is not necessary if the company uses a computerized system.;6.;value:2.00 points;Why is it;a matter of good internal control to deposit all cash receipts daily and make;all payments for goods and services by check?;When no paper documents are required, there is increased convenience;and lower cost.;These actions control the access to cash and create an independent;record of all cash activities.;These procedures result in a more extensive testing of a company's;records.;The Sarbanes-Oxley Act requires these steps be taken by each publicly;traded company.;These procedures allow management to determine if projected cash;receipts and disbursements came in over or under budgeted amounts.;7.;value:2.00 points;Obligations;not expected to be paid within one year (or the company's operating cycle if;longer than one year) are reported as;Current assets.;Current liabilities.;Long-term liabilities.;Operating cycle liabilities.;Bills.;8.;value:2.00 points;Liabilities;Must be certain.;Must sometimes be estimated.;Must be for a specific amount.;Must always have a definite date for payment.;Must involve an outflow of cash.;9.;value:20.00 points;Wright;Company deposits all cash receipts on the day when they are received and it;makes all cash payments by check. At the close of business on May 31, 2013;its Cash account shows a $28,100 debit balance. The company?s May 31 bank;statement shows $26,400 on deposit in the bank.;a.;The May;31 bank statement included a $130 debit memorandum for bank services, the;company has not yet recorded the cost of these services.;b.;Outstanding;checks as of May 31 total $5,900.;c.;May 31;cash receipts of $6,500 were placed in the bank?s night depository after;banking hours and were not recorded on the May 31 bank statement.;d.;In;reviewing the bank statement, a $430 check written by Smith Company was;mistakenly drawn against Wright?s account.;e.;A debit;memorandum for $540 refers to a $540 NSF check from a customer, the company;has not yet recorded this NSF check.;Prepare;a bank reconciliation for the company using the above information.;10.;value:2.00 points;Obligations;due to be paid within one year or within the company's operating cycle;whichever is longer, are;Current assets.;Current liabilities.;Earned revenues.;Operating cycle liabilities.;Bills.;11.;value:2.00 points;The entry;to record reimbursement of the petty cash fund for postage expense should;include;A debit to Postage Expense.;A debit to Petty Cash.;A debit to Cash.;A debit to Cash Short and Over.;A debit to Supplies.;Hitzu;Co. sold a copier costing $6,500 with a two-year parts warranty to a customer;on August 16, 2013, for $13,000 cash. Hitzu uses the perpetual inventory;system. On November 22, 2014, the copier requires on-site repairs that are;completed the same day. The repairs cost $146 for materials taken from the;Repair Parts Inventory. These are the only repairs required in 2014 for this;copier. Based on experience, Hitzu expects to incur warranty costs equal to;3% of dollar sales. It records warranty expense with an adjusting entry at;the end of each year.;12.;value:4.00 points;1.;How;much warranty expense does the company report in 2013 for this copier?;13.;value:4.00 points;2.;How;much is the estimated warranty liability for this copier as of December 31;2013?;14.;value:4.00 points;3.;How;much warranty expense does the company report in 2014 for this copier?;15.;value:4.00 points;4.;How;much is the estimated warranty liability for this copier as of December 31;2014?;16.;value:4.00 points;5(a);Prepare;journal entries to record the copier?s sale.


Paper#49052 | Written in 18-Jul-2015

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