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Price Increased I have short 50 questions (test format wit

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I have short 50 questions (test format with 4 answer) probably from Financial Accounting tool for business decision making 5th edition : Kimmel Keygandt Kieso. due ate december 2 /09 do you think you could help me with this?
Submitted: 4 years ago.
Category: Homework
Expert:  Neo replied 4 years ago.
Good day!

Thank you for requesting me.

Plase post them and let see if there is something that I can do.

Thank you so much! :)
Customer: replied 4 years ago.
Question 1

One of the accounting concepts upon which adjustments for prepayments and accruals are based is:
• • monetary unit.
• • cost.
• • matching.
• • economic entity.
Question 2

Adjustments would not be necessary if financial statements were prepared to reflect net income from:
• • monthly operations.
• • interim operations.
• • lifetime operations.
• • fiscal year operations.
Question 3

The following is selected information from L Corporation for the fiscal year ending October 31, 2010.
Cash received from customers $300,000
Revenue earned 370,000
Cash paid for expenses 170,000
Cash paid for computers on November 1, 2009 that will be used for 3 years 48,000
Expenses incurred, not including any depreciation 200,000
Proceeds from a bank loan, part of which was used to pay for the computers 100,000
Based on the accrual basis of accounting, what is L Corporation's net income for the year ending October 31, 2010?
• • $154,000
• • $170,000
• • $184,000
• • $152,000
Question 4

The following is selected information from C Corporation for the fiscal year ending October 31, 2010.
Cash received from customers $150,000
Revenue earned 195,000
Cash paid for expenses 85,000
Cash paid for computers on November 1, 2009 that will be used for 3 years 24,000
Expenses incurred, not including any depreciation 100,000
Proceeds from a bank loan, part of which was used to pay for the computers 50,000
Based on the accrual basis of accounting, what is C Corporation's net income for the year ending October 31, 2010?
• • $86,000
• • $95,000
• • $102,000
• • $87,000
Question 5

An adjusting entry would not include which of the following accounts?
• • Unearned Revenue
• • Cash
• • Property Tax Payable
• • Interest Receivable
Question 6

An adjusting entry can include a:
• • debit to an asset and a credit to a liability.
• • debit to a liability and a credit to a revenue.
• • debit to an expense and a credit to a revenue.
• • debit to a revenue and a credit to an asset.
Question 7

The balance in the prepaid rent account before adjustment at the end of the year is $12,000 and represents three months rent paid on December 1. The adjusting entry required on December 31 is:
• • debit Prepaid Rent, $8,000; credit Rent Expense, $8,000.
• • debit Prepaid Rent, $4,000; credit Rent Expense $4,000.
• • debit Rent Expense, $12,000; credit Prepaid Rent, $12,000.
• • debit Rent Expense, $4,000; credit Prepaid Rent, $4,000.
Question 8

Adjustments for unearned revenue:
• decrease liabilities and increase revenues.
• • increase assets and increase revenues.
• • increase liabilities and increase revenues.
• • decrease revenues and decrease assets
Question 9

A company using a perpetual inventory system that returns goods previously purchased on credit would
• • debit Accounts Payable and credit Purchases.
• • debit Sales and credit Accounts Payable.
• • debit Cash and credit Accounts Payable.
• • debit Accounts Payable and credit Merchandise Inventory
Question 10

Freight costs incurred by a seller on merchandise sold to customers will cause an increase
• • to a contra-revenue account of the seller.
• • in the selling expenses of the buyer.
• • in operating expenses for the seller.
• • to the cost of goods sold of the seller
Question 11

Indicate which one of the following would not appear on both a single-step income statement and a multiple-step income statement.
• • Cost of goods sold
• • Gross profit
• • Operating expenses
• • Sales revenues
Question 12

The operating expenses section of an income statement for a merchandising company would not include
• • Cost of goods sold.
• • Freight-out.
• • Insurance expense.
• • Utilities expense.
Question 13

Financial information is presented below:
Operating Expenses $45,000
Sales 150,000
Cost of Goods Sold 77,000
Gross Profit would be
• $73,000.
• • $28,000.
• • $105,000.
• • $150,000.
Question 14

During the year, Sarah's Pet Shop's merchandise inventory decreased by $25,000. If the company's cost of goods sold for the year was $375,000, purchases would have been
• • $325,000.
• • Unable to determine.
• • $400,000.
• • $350,000.
Question 15

Which of the following is not considered in computing net cost of purchases?
• • Purchases returns and allowances
• • Purchases
• • Freight paid on purchased goods
• • Freight paid on goods shipped to customers
Question 16

Gross profit rate is computed by dividing cost of goods sold by net sales.
• • False
• • True
Question 17

Financial information is presented below:
Operating Expenses $45,000
Sales Returns and Allowances 13,000
Sales Discount 6,000
Sales 150,000
Cost of Goods Sold 67,000
The gross profit rate would be
• • .511.
• • .489.
• • .553.
• • .535.
Question 18

Financial information is presented below:
Operating Expenses $35,000
Sales Returns and Allowances 12,000
Sales Discount 3,000
Sales 140,000
Cost of Goods Sold 67,000
The gross profit rate would be
• • .546.
• .454.
• • .464.
• • .477.
Question 19

Haverty Industries increased its gross profit rate from 18.4% in 2009 to 23.7% in 2010. Which of the following would be a possible explanation for this change?
• • Haverty increased its product markdowns in 2010.
• • Haverty's new profit lines with lower margins in 2010 became a larger component of their sales.
• • Haverty's global sourcing efforts at the beginning of 2010 resulted in a lower cost of merchandise sold.
• • Haverty's average margin between the selling price and the inventory cost decreased over this two-year period.
Question 20

A decline in a company's gross profit could be caused by all of the following except
• • selling products with a lower markup.
• • clearance of discontinued inventory.
• • paying lower prices to its suppliers.
• • increasing competition resulting in a lower selling price
Question 21

Erin Corporation purchases $400 of merchandise on credit. using the periodic inventory approach, Erin would record this transaction as:

Merchandise Inventory 400
Accounts Payable 400


Accounts Payable 400
Merchandise Inventory 400


Accounts Payable 400
Purchases 400


Purchases 400
Accounts Payable

Question 22

Crowder Corporation recorded the return of $150 of goods originally sold on credit to Discount Industries. Using the periodic inventory approach, Crowder would record this transaction as:

Accounts Receivable 150
Sales Returns and Allowances 150


Merchandise Inventory 150
Accounts Receivable 150


Sales Returns and Allowances 150
Accounts Receivable 150


Accounts Payable 150
Sales Returns and Allowances 150

Question 23

Ramos Company receives a payment on account from Martinez Industries. Based on the original sale of $4,000 using the periodic inventory approach, Ramos honors the 3% cash discount and records the payment. Which of the following is the correct entry for Ramos to record?

Cash 3,880
Sales Discounts 120
Accounts Receivable 4,000


Cash 110
Purchase Discounts 120
Accounts Payable 4,000


Cash 3,880
Sales Discounts 120
Merchandise Inventory 4,000


Accounts Receivable 4,000
Cash 3,880
Purchase Discounts 120

Question 24

The factor which determines whether or not goods should be included in a physical count of inventory is

physical possession.

legal title.

management's judgment.

whether or not the purchase price has been paid.
Question 25

Independent internal verification of the physical inventory process occurs when

the items counted are compared to the inventory account balance.

a second employee counts the inventory and compares the result to the count made by the first employee.

all prenumbered inventory tags are accounted for.

the employee is required to count all items twice for sake of verification
Question 26

Which of the following should not be included in the physical inventory of a company?

Goods held on consignment from another company.

Goods in transit from another company shipped FOB shipping point.

Goods shipped on consignment to another company.

All of the above should be included.
Question 27

Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

Goods in transit to Reeves, FOB destination

Goods that Reeves is holding on consignment for Parker Company

Goods that Reeves is holding in inventory on March 31 for which the related Accounts Payable is 15 days past due

Goods in transit that Reeves has sold to Smith Company, FOB shipping point
Question 28

For companies that use a perpetual inventory system, all of the following are purposes for taking a physical inventory except to:

check the accuracy of the records.

determine the amount of wasted raw materials.

determine ownership of the goods.

determine losses due to employee theft.
Question 29

Hogan Industries had the following inventory transactions occur during 2010:
Units Cost/unit
Feb. 1, 2010 Purchase 18 $45
Mar. 14, 2010 Purchase 31 $47
May 1, 2010 Purchase 22 $49

The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s after-tax income using LIFO? (rounded to whole dollars)

$594

$540

$772

$848
Question 30

Hogan Industries had the following inventory transactions occur during 2010:
Units Cost/unit
Feb. 1, 2010 Purchase 18 $45
Mar. 14, 2010 Purchase 31 $47
May 1, 2010 Purchase 22 $49

The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s after-tax income using FIFO? (rounded to whole dollars)

$594

$772

$848

$540
Question 31

Dole Industries had the following inventory transactions occur during 2010:
Units Cost/unit
Feb. 1, 2010 Purchase 54 $45
Mar. 14, 2010 Purchase 93 $47
May 1, 2010 Purchase 66 $49

The company sold 153 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s gross profit using FIFO? (rounded to whole dollars)

$2,316

$2,544

$7,323

$7,095
Question 32

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2010 are as follows:
Units Per unit price Total
Balance, 1/1/2010 200 $5.00 $1,000
Purchase, 1/15/2010 100 5.30 530
Purchase, 1/28/2010 100 5.50 550

An end of the month (1/31/2010) inventory showed that 120 units were on hand. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month?

$2,800

$3,000

$1,376

$1,424
Question 33

The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $11,200 for FIFO and $9,800 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

$1,400

$400

$500

$280
Question 34

Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants the most realistic cost of goods sold. Which inventory costing method should Ace consider using?

LIFO because cost of goods sold represents the latest costs.

FIFO because cost of goods sold represents the earliest costs.

Average because all inventory costs will then represent an average amount.

Specific identification is the most realistic method because it involves the actual costs.
Question 35

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Red Company's "cost of goods sold" for 2010 (to the closest dollar)?"
Year Inventory
Turnover Ratio Ending Inventory
Black Company 2008 $26,340
2009 10.7 $29,890
2010 10.2 $30,100

Red Company 2008 $25,860
2009 8.8 $24,750
2010 9.5 $22,530

$224,580

$222,684

$235,125

$214,035
Question 36

Which of these would cause the inventory turnover ratio to increase the most?

Decreasing the amount of inventory on hand and increasing sales.

Keeping the amount of inventory on hand constant but increasing sales.

Increasing the amount of inventory on hand.

Keeping the amount of inventory on hand constant but decreasing sales
Question 37

Classic Floors has the following inventory data:
July 1 Beginning inventory 15 units at $4.00
5 Purchases 60 units at $4.40
14 Sale 40 units
21 Purchases 30 units at $4.80
30 Sale 28 units

Assuming that a perpetual inventory system is used, what is the value of ending inventory on a LIFO basis for July?

$157.60

$310.40

$468.00

$236.00
Question 38

Which of the following is not one of the main factors that contribute to fraudulent activity?

Rationalization.

Opportunity.

Incompatible duties.

Financial pressure.
Question 39

All of the following requirements about internal controls were enacted under the Sarbanes Oxley Act of 2002 except:

independent outside auditors must attest to the level of internal control.

independent outside auditors must eliminate redundant internal control.

companies must develop sound internal controls over financial reporting.

companies must continually assess the functionality of internal controls.
Question 40

Which one of the following is not an objective of a system of internal controls?

Reduce the risks of errors.

Overstate liabilities in order to be conservative.

Safeguard company assets.

Enhance the accuracy and reliability of accounting records.
Question 41

At Emerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash receipts?

Mechanical controls.

Physical controls.

Segregation of duties.

Documentation procedures.
Question 42

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

All cash receipts should be recorded promptly.

The number of persons who have access to cash should be limited.

The functions of record keeping and maintaining custody of cash should be combined.

Surprise audits of cash on hand should be made occasionally
Question 43

Allowing only the treasurer to sign checks is an example of

separation of duties.

establishment of responsibility.

documentation procedures.

other controls.
Question 44

Which one of the following would not cause a bank to debit a depositor's account?

Collection of a note receivable.

Bank service charge.

Wiring of funds to other locations.

Checks marked NSF.
Question 45

Whicch of the following would not be subtracted from the balance per books on a bank reconciliation?

Check printing charge.

Service charges.

Outstanding checks.

NSF checks.
Question 46

A debit memorandum would not be issued by the bank for

the issuance of traveler's checks.

the collection of a notes receivable.

the wiring of funds.

a bank service charge.
Question 47

In preparing a bank reconciliation, outstanding checks are

deducted from the balance per bank.

deducted from the balance per books.

added to the balance per bank.

added to the balance per books
Question 48

If a check correctly written and paid by the bank for $626 is incorrectly recorded on the company's books for $662, the appropriate treatment on the bank reconciliation would be to

subtract $36 from the book's balance.

deduct $626 from the book's balance.

deduct $36 from the bank's balance.

add $36 to the book's balance.
Question 49

The following information was taken from Hurlbert Company cash budget for the month June
Beginning cash balance $23,000
Cash receipts 31,000
Cash disbursements 39,000

If the company has a policy of maintaining end of the month cash balance of $20,000, the amount the company would have to borrow is

$15,000.

$0.

$12,000.

$5,000.
Question 50

The following credit sales are budgeted by Garcia Company:
January $102,000
February 150,000
March 210,000
April 180,000

The company’s past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of March is

$180,000.

$176,400.

$168,000.

$185,160.
Customer: replied 4 years ago.
I increase price to 50 $
Expert:  Neo replied 4 years ago.
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Category: Homework
Satisfied Customers: 12044
Experience: BS Accounting
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