Reference no: EM132519768

Question 1: The undrawn profit of close corporation comprises of:

Select one:

a. The profit after tax of the current financial year only

b. Profit after tax for the current year less distribution to members

c. Undrawn profit from the previous year plus after tax for the current year, less distributions to members for the current year

d. None of the above

Question 2: A debt balance on a partners current account must indicate that:

Select one:

a. They have withdrawn more than they have earned

b. They are solvent

c. They have a credit balance on their capital account

d. Drawings are higher than the profit share for that year

Question 3: A manufacturing company has a beginning finished goods inventory balance of $14,600 cost of goods manufactured of $32,500 and an ending finished goods inventory balance of $17,800.

What is the total cost transferred from work-in-process inventory to finished goods inventory?

Select one:

a. $27,600

b. $29,300

c. $21,200

d. $32,500

Question 4: The rule in Garner v. Murray deals with:

Select one:

a. How profits are to be divided if no prior partnership agreement exists

b. Writing goodwill off against reserves

c. How the debts of insolvent partners are to be cleared

d. Rules for align the admittance of new partners

Question 5: Total beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory = cost of goods sold

Select one:

• True
• False

Question 6: The equity of a company could comprise the following items:

Select one:

a. Share capital and retained earnings

b. Revaluation surplus , retained earnings and bonds

c. Revaluation surplus and retained earnings

d. Share capital, retained earnings and debentures

Question 7: John and William were in a partnership profit and losses equally . They admit Andrew as a partner and decide to share profits equally between the three partners. Goodwill is valued at $60,000 but is to be immediately written off . the effect of this on Johns capital would be to:

Select one:

a. Decrease it by $20,000

b. Increase it by $10,000

c. Increase it by $30,000

d. Decrease it by $10,000

Question 8: A manufacturing company has a beginning finished goods inventory balance of $14,600, cost of goods manufactured of $32,500 and ending finished goods inventory balance of $17,800.

The cost of goods sold is :

Select one:

a. $27,600

b. $29,300

c. $21,200

d. $32,500

Question 9: The schedule of cost of goods manufactured is the same as the statement of cost of goods sold.

Select one:

• True
• False

Question 10: Cost of goods manufactured represents the total direct materials, direct labour and overhead added to work-in-process inventory.

Select one:

• True
• False

Question 11: PP Company had the following inventory balances for the year:

• January 1st Raw materials of $57,000. Work-in-process of $68,000. Finished goods of $79,000.
• December 31st Raw materials of $60,000. Work-in-process of $50,000. Finished goods of $40,000.
• Raw materials used in manufacturing during the year were $118,000.

What were the Raw material purchases during the year?