ACC 556 ACC556 Week 5 Midterm part 2

ACC 556 ACC556 Week 5 Midterm part 2

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ACC 556 Week 5 Midterm part 2

1. 

Dobler Company gathered the following reconciling information in preparing its June bank reconciliation:
 
Cash balance per books, 6/30                               $8,400
Deposits in transit                                                       600
Notes receivable and interest collected by bank      1,480
Bank charge for check printing                                     50
Outstanding checks                                                 3,000
NSF check                                                                  280
 
The adjusted cash balance per books on June 30 is

2. 

Fehr Company sells merchandise on account for $5,000 to Kelly Company with credit terms of 2/10, n/30. Kelly Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

3. 

Receivables are

4. 

If Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?

5. 

Smithson Corporation’s unadjusted trial balance includes the following balances (assume normal balances):
•        Accounts Receivable                                      $3,357,000
•        Allowances for Doubtful Accounts                  $     63,900
 
Bad debts are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record?

6. 

Management usually wants ________ financial statements and the IRS requires all businesses to file _________ tax returns.

7. 

If a company is given credit terms of 2/10, n/30, it should

8. 

Regions Inc. pays its rent of $48,000 annually on January 1 and makes monthly adjusting entries. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following are true?

9. 

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

10. 

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using

11. 

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

12. 

Olympus Climbers Company has the following inventory data:
                  July 1            Beginning inventory          20 units at $19       $   380
                      7            Purchases                         70 units at $20         1,400
                    22            Purchases                         10 units at $22            220
                                                                                                             $2,000
 
A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

13. 

The primary difference between accrued revenues and unearned revenues is that accrued revenues have:

14. 

A revenue generally

15. 

Bad Debt Expense is considered

16. 

All of the following are true regarding the management and monitoring of cash except

17. 

Independent internal verification of the physical inventory process occurs when

18. 

All of the following are characteristics of every accounting information system except it is a system

19. 

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?

20. 

Which statement is incorrect?

21. 

A company usually determines the amount of supplies used during a period by:

22. 

What is an advantage of using the multiple-step income statement?

23. 

A merchandiser will earn an operating income of exactly $0 when

24. 

Which of the following is least likely to help a company minimize losses as credit standards are relaxed?

25. 

A trial balance proves


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