Question 1

The due date of a 90-day note dated July 5 is

Accepted Answer

A)  September 30.
B)  October 2.
C)  October 3.
D)  October 1.E) C) and D)
F) B) and D)

Question 2

When an account is written off under the allowance method,

Accepted Answer

A)  the write-off is taken against the allowance account.
B)  bad debt expense is increased.
C)  accounts receivable remains unchanged.
D)  accounts receivable increases.E) A) and B)
F) A) and C)

Question 3

The inventory method that considers the inventory to be composed of the units of merchandise acquired earliest is called

Accepted Answer

A)  first-in,first-out.
B)  retail method.
C)  average cost.
D)  last-in,first-out.E) All of the above
F) None of the above

Question 4

The direct write-off method records uncollectible accounts expense in the year the specific account receivable is determined to be uncollectible.

Accepted Answer

A) True 
 B)False

Question 5

Use the following data to calculate the cost of ending inventory under the FIFO method.

Accepted Answer

A)  $825
B)  $750
C)  $675
D)  $840E) All of the above
F) A) and B)

Question 6

All receivables that are expected to be realized in cash within a year are presented in the current assets section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

Use the following data to calculate the cost of ending inventory using the LIFO method.

Accepted Answer

A)  $825
B)  $750
C)  $675
D)  $600E) All of the above
F) None of the above

Question 8

Cost is a method of inventory valuation.

Accepted Answer

A) True 
 B)False

Question 9

The FIFO method of costing inventory is based on the assumption that costs should be charged against revenues in the reverse order in which they were incurred.

Accepted Answer

A) True 
 B)False

Question 10

The presentation of net accounts receivable on the balance sheet will be most accurate
Under the

Accepted Answer

A)  direct write-off method.
B)  estimate based on the percentage of sales method.
C)  estimate based on analysis of receivables.
D)  none of these.E) All of the above
F) A) and C)

Question 11

Using the lower of cost or market,what should the total inventory value be for the following items:

Accepted Answer

The answer of Using the lower of cost or market,what...

Question 12

Under which method of inventory cost flows is the cost flow assumed to be in the reverse order in which the expenditures were made?

Accepted Answer

A)  Average cost
B)  Last-in,first-out
C)  First-in,first-out
D)  Last-in,last-outE) A) and B)
F) C) and D)

Question 13

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases:

Accepted Answer

The answer of Determine the amount to be added to...

Question 14

The lower of cost or market is a method of inventory valuation.

Accepted Answer

A) True 
 B)False

Question 15

Receivables not expected to be collected within one year are reported in the fixed assets section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

A note receivable due in 90 days is listed on the balance sheet under

Accepted Answer

A)  long-term liabilities.
B)  fixed assets.
C)  current liabilities.
D)  current assets.E) B) and C)
F) All of the above

Question 17

The amount of the promissory note plus the interest earned on the due date is called the

Accepted Answer

A)  realizable value.
B)  maturity value.
C)  face value.
D)  net realizable value.E) A) and C)
F) B) and D)

Question 18

During inflationary periods,the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Accepted Answer

A) True 
 B)False

Question 19

Use the following data to calculate cost of merchandise sold under FIFO method.

Accepted Answer

A)  $825
B)  $750
C)  $675
D)  $600E) A) and B)
F) A) and C)

Question 20

If the cost of an item of inventory is $70,the current replacement cost is $65,and the sales price is $85,the amount included in inventory according to the lower of cost or market is

Accepted Answer

A)  $65.
B)  $70.
C)  $85.
D)  $160.E) B) and C)
F) A) and B)

Exam 6: Receivables and Inventories

A note receivable due in 90 days is listed on the balance sheet under

Correct AnswerverifiedShow Answer

All receivables that are expected to be realized in cash within a year are presented in the current assets section of the balance sheet.

Correct AnswerverifiedShow Answer

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases:

Correct AnswerverifiedShow Answer

The lower of cost or market is a method of inventory valuation.

Correct AnswerverifiedShow Answer

Use the following data to calculate the cost of ending inventory using the LIFO method.

Correct AnswerverifiedShow Answer

When an account is written off under the allowance method,

Correct AnswerverifiedShow Answer

Using the lower of cost or market,what should the total inventory value be for the following items:

Correct AnswerverifiedShow Answer

The direct write-off method records uncollectible accounts expense in the year the specific account receivable is determined to be uncollectible.

Correct AnswerverifiedShow Answer

Cost is a method of inventory valuation.

Correct AnswerverifiedShow Answer

The FIFO method of costing inventory is based on the assumption that costs should be charged against revenues in the reverse order in which they were incurred.

Correct AnswerverifiedShow Answer

During inflationary periods,the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Correct AnswerverifiedShow Answer

Use the following data to calculate cost of merchandise sold under FIFO method.

Correct AnswerverifiedShow Answer

Use the following data to calculate the cost of ending inventory under the FIFO method.

Correct AnswerverifiedShow Answer

The presentation of net accounts receivable on the balance sheet will be most accurate Under the

Correct AnswerverifiedShow Answer

The inventory method that considers the inventory to be composed of the units of merchandise acquired earliest is called

Correct AnswerverifiedShow Answer

The due date of a 90-day note dated July 5 is

Correct AnswerverifiedShow Answer

Receivables not expected to be collected within one year are reported in the fixed assets section of the balance sheet.

Correct AnswerverifiedShow Answer

If the cost of an item of inventory is $70,the current replacement cost is $65,and the sales price is $85,the amount included in inventory according to the lower of cost or market is

Correct AnswerverifiedShow Answer

Under which method of inventory cost flows is the cost flow assumed to be in the reverse order in which the expenditures were made?

Correct AnswerverifiedShow Answer

The amount of the promissory note plus the interest earned on the due date is called the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified