Final Exam 101 -- MyAccountingLab Quizzes 5-8

Question 1

Under the Allowance Method for Uncollectible receivables, the entry to record uncillectible-account expense has what effect on the financial statements?

Answer 1

decrease net income

decrease assets

Question 2

see question #2 chapter 5 quiz

Answer 2

true

Question 3

see question #3 chapter 5 quiz

Answer 3

true

Question 4

see question #4 chapter 5 quiz

Answer 4

true

Question 5

see question #5 chapter 5 quiz

Answer 5

true

Question 6

see question #6 chapter 5 quiz

Answer 6

true

Question 7

see question #7 chapter 5 quiz

Answer 7

true

Question 8

On August 1, 2012, Azores, Inc. sold equipment and accepted a six-month, 11%, $30,000 note receivable. Azores’ year-end is December 31. If Azores fails to make an adjusting entry for the accrued interest,

Answer 8

net income will be understated

assets will be understated

Question 9

see question #9 chapter 5 quiz

Answer 9

true

Question 10

A company sells on credit terms of 2/10, n/30 and has days’ sales in accounts receivable of 30 days. Its days’ sales in receivables is

Answer 10

about right

Question 11

see question #1 chapter 6 quiz

Answer 11

true

Question 12

see question #2 chapter 6 quiz

Answer 12

true

Question 13

see question #3 chapter 6 quiz

Answer 13

true

Question 14

The word “market” as used in “the lower or cost or market” generally means

Answer 14

replacement cost

Question 15

see question #5 chapter 6 quiz

Answer 15

true

Question 16

see question #6 chapter 6 quiz

Answer 16

true

Question 17

When does the cost of inventory become an expense?

Answer 17

when inventory is delivered to a customer

Question 18

The sum of ending inventory and cost of goods sold is

Answer 18

goods available

Question 19

In a period of rising prices

Answer 19

gross profit under FIFO will be higher than under LIFO

Question 20

An error understated REX Corporation’s December 31, 2012, ending inventory by $26,000. What effect will this error have on net income for 2013?

Answer 20

overstate

Question 21

see question #1 chapter 7 quiz

Answer 21

true

Question 22

see question #2 chapter 7 quiz

Answer 22

true

Question 23

Depreciation is a process of allocating the cost of an asset to expense over its useful life.

Answer 23

true

Question 24

Obsolescence as well as physical wear and tear should be considered when determining the period over which an asset should be depreciated

Answer 24

true

Question 25

A major objective of depreciation accounting is to allocate the cost of an using an asset against the revenues it helps to generate

Answer 25

true

Question 26

Janes' Beauty uses the double-declining method for depreciation on its computers. Which item is not needed to compute depreciation for the first year?

Answer 26

estimated residual value

Question 27

see question #5 chapter 7 quiz

Answer 27

true

Question 28

see question #6 chapter 7 quiz

Answer 28

true

Question 29

Which of the following costs are reported on a company's income statement and balance sheet see question #7 chapter 7 quiz

Answer 29

Income Statement Balance Sheet | Cost of Goods Sold Accumulated Depreciation

Question 30

Which of the following items should be accounted for as a capital expenditure?

Answer 30

taxes paid in conjunction with the purchase of office equipment

Question 31

Kline Company failed to record deprecation of equipment. How does this omission affect Kline's financial statements?

Answer 31

net income is overstated | assets are overstated

Question 32

A capital expenditure

Answer 32

adds to an asset

Question 33

What is needed to compute the present value of an investment?

Answer 33

the interest rate the amount of the receipt the length of time between the investment and future receipt (NOT - the rate of inflation - NOT)

Question 34

Majestic holds an investment in Cromwell bonds that pay interest each October 31. Majestic BALANCE SHEET at December 31 should report

Answer 34

interest receivable

Question 35

The starting point in accounting for all investments is

Answer 35

cost

Question 36

see question #4 chapter 8 quiz

Answer 36

true

Question 37

see question #5 chapter 8 quiz

Answer 37

true

Question 38

see question #6 chapter 8 quiz

Answer 38

true

Question 39

see question #7 chapter 8 quiz

Answer 39

true

Question 40

consolidation accounting

Answer 40

combines the accounts of the parent company and those of the subsidiary companies

Question 41

see question #9 chapter 8 quiz

Answer 41

true

Question 42

Mac's investment in less than 2% of Mobil's stock, which Mac expects to hold for three years and then sell, is what type of investment?

Answer 42

Available-for-sale