Reference no: EM132450994
Questions -
Q1. Financial information is presented below:
Operating expenses $36,000
Sales revenue 150,000
Cost of goods sold 105,000
Gross profit would be...
A) $45,000
B) 24,000
C) $114,000
D) $36,000
Q2. At December 31, 2014 Mohling Company's inventory records indicated a balance of $602,000. Upon further investigation it was determined that this amount included the following:
a. $112,000 in inventory purchases made by Mohling shipped from the seller 12/27/14 terms FOB destination, but not due to be received until January 2nd
b. $74,000 in goods sold by Mohling with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th
c. $6,000 of goods received on consignment from Dollywood Company
What is Mohling's correct ending inventory balance at December 31, 2014?
A) $484,000
B) $490,000
C) $410,000
D) $596,000
Q3. Olympus Climbers Company has the following inventory data:
|
July 1
|
Beginning inventory
|
20 units at $19
|
$380
|
|
July 7
|
Purchases
|
70 units at $20
|
1,400
|
|
July 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
A) $1380
B) $1340
C) $620
D) $660
Q4. Jenks Company developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories:
|
Product
|
Cost
|
Market
|
|
A
|
$57,000
|
$60,000
|
|
B
|
40,000
|
38,000
|
|
C
|
80,000
|
81,000
|
If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be..
A) $177,000
B) $181,000
C) $179,000
D) $175,000
Q5. Nilson Company gathered the following reconciling information in preparing its August bank reconciliation:
|
Cash balance per books, 8/31
|
$21,000
|
|
Deposits in transit
|
900
|
|
Notes receivable and interest collected by bank
|
5,100
|
|
Bank charge for check printing
|
120
|
|
Outstanding checks
|
12,000
|
|
NSF check
|
1,020
|
The adjusted cash balance per books on August 31 is
A) $14,760
B) $24,960
C) $24,060
D) $13,800
Q6. Which of the following is not a basic principle of cash management?
A) Increase collection of receivables.
B) Keep inventory levels low.
C) Pay all liabilities early.
D) Invest idle cash.
Q7. Accounting information is relevant to business decisions because it
A) confirms prior expectations.
B) has been verified by external audit.
C) is prepared on an annual basis.
D) is neutral in its representations.
Q8. Howard Company had a transaction that caused a $5,000 increase in both assets and total liabilities. This transaction could have been a(n)
A) investment of $5,000 cash in the business by the stockholders.
B) repayment of a $5,000 bank loan.
C) purchase of office equipment for $5,000 cash.
D) purchase of office equipment for $12,000, paying $7,000 cash and issuing a note payable for the balance.
Q9. Can financial statements be prepared directly from the adjusted trial balance?
A) No, the adjusted trial balance merely proves the equality of the total debit and total credit balances in the ledger after adjustments are posted. It has no other purpose.
B) Yes, adjusting entries have been recorded in the general journal and posted to the ledger accounts.
C) They cannot. The general ledger must be used.
D) They can because that is the only reason that an adjusted trial balance is prepared.