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Accounting Basics lesson

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1. Which amount does not change during the period and is added to purchases when computing the cost of goods available for sale?;A. Beginning inventory;B. Ending inventory;C. Periodic inventory;D. Freight-in;2. The Allowance for Doubtful Accounts is adjusted;A. at the end of each accounting period.;B. each time a customer?s debt is satisfied.;C. within one year of granting credit to a customer.;D. each time a customer is granted credit.;3. The goods a company has available to sell to customers are called;A. supplies.;B. sales.;C. cost of goods sold.;D. merchandise inventory.;4. Net realizable value can be defined as the;A. Gross Accounts Receivable.;B. Current Bad Debts Expense.;C. amount of Accounts Receivable you don?t expect to collect.;D. Gross Accounts Receivable minus the Allowance for Doubtful Accounts.;5. At the start of the year, Northern Lights had $8,000 worth of merchandise. What do we know about Northern Lights?;A. It?s a service business.;B. It?s a retail business.;C. The company ended with a net income last year.;D. The company ended with a net loss last year.;6. Under the allowance method, Bad Debt Expense is recorded;A. as an estimate.;B. when an individual account is written off.;C. several times during the year as needed.;D. None of the above;7. Fit City estimates it will collect $2,300 of the $2,425 owed by customers. The difference of $125 represents the;A. Gross Accounts Receivable.;B. Allowance for Doubtful Accounts.;C. Net Realizable Value.;D. Value of the Current Unpaid Receivables.;8. Gross Accounts Receivable is $10,000. Allowance for Doubtful Accounts has a credit balance of $200. Net sales for the year are $150,000. In the past, 2% of sales had proved uncollectible. What would be the adjusted balance of the Allowance account under the income statement approach?;A. $3,200;B. $2,800;C. $1,400;D. $3,000;9. Harry?s Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible. Barber calculates Bad-Debts Expense using the;A. income statement approach.;B. direct write-off method.;C. balance sheet approach.;D. aging the Accounts Receivable approach.;10. The physical count of inventory was incorrect, it overstated the ending inventory. This would cause the;A. cost of goods sold to be overstated.;B. cost of goods sold to be understated.;C. gross profit to be understated.;D. net income to be understated.;11. On December 31, 2012, Brooke?s Horse Stable?s unadjusted Allowance for Doubtful Accounts showed a debit balance of $432. An aging of the Accounts Receivable indicates probable uncollectible accounts of $1,000. The year-end adjusting entry for Bad-Debts Expense includes a;A. debit to the Allowance account for $568.;B. credit to the Allowance account for $42.;C. debit to the Allowance account for $822.;D. credit to the Allowance account for $1,432.;12. Using the aging method, estimated uncollectible accounts are $3,000. If the balance in the Allowance for Doubtful Accounts is a $600 credit before adjustment, what is the Bad-Debts Expense adjustment for the period?;A. $3,000;B. $600;C. $2,400;D. $3,600;13. The beginning Merchandise Inventory account appears in the _______ on the worksheet.;A. adjustment column;B. trial balance and the balance sheet columns;C. trial balance and adjustment columns;D. All of the above;14. Cost of goods sold equals;A. beginning inventory + net purchases + freight-in + ending inventory.;B. beginning inventory ? net purchases ? freight-in + ending inventory.;C. beginning inventory + net purchases + freight-in ? ending inventory.;D. beginning inventory ? net purchases + freight-in + ending inventory.;15. Indy Sport and Hobby?s Allowance for Doubtful Accounts had an unadjusted credit balance of $400. The manager estimates that $900 of the Accounts Receivable is uncollectible. Using the balance sheet approach, the year-end adjusting entry for Bad-Debts Expense includes a;A. credit to the Bad-Debt Expense account for $500.;B. debit to the Bad-Debts Expense account for $900.;C. credit to the Bad-Debts Expense account for $1,300.;D. debit to the Bad-Debts Expense account for $500.;16. Which method uses an aging of Accounts Receivable to calculate the Bad-Debts Expense?;A. Income statement approach;B. Balance sheet approach;C. Aging the Accounts Receivable;D. Direct write-off;17. An account never used in a service business is;A. Consulting Fees-Revenue.;B. Interest Payable.;C. Merchandise Inventory.;D. Accumulated Depreciation?Equipment.;18. Gross Accounts Receivable is $12,000. Allowance for Doubtful Accounts has a credit balance of $600. Net sales for the year are $100,000. In the past, 2% of sales had proved uncollectible, and an aging of the receivables indicates $1,900 as uncollectible. What would be the adjusted balance of the Allowance account under the balance sheet approach?;A. $2,000;B. $1,400;C. $2,500;D. $1,900;19. Gross Accounts Receivable is $10,000. Allowance for Doubtful Accounts has a credit balance of $200. Net sales for the year are $150,000. In the past, 2% of sales had proved uncollectible, and an aging of the receivables indicates $1,200 is doubtful. Under the income statement approach, the Bad-Debts Expense for the year is;A. $1,000.;B. $3,000.;C. $2,800.;D. $1,200.;20. Beginning inventory was $4,000, purchases totaled $22,000, and sales were $20,000. What is the ending inventory?;A. $2,000;B. $4,000;C. $6,000;D. $8,000

 

Paper#81625 | Written in 18-Jul-2015

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