Mid-Term review part 2Mid-Term review part 22014

#1#1

Classify Sales Discountsa. Assets, debitb. Contra Revenue, creditc. Contra Revenue, debitd. Cost of merchandise, debit

#2#2

When using the aging method to estimate bad debts, as the account ages thea. The % estimated to be bad goes downb. The % estimated to be bad goes upc. The % estimated to be bad stays the same

#3#3

When adjusting the merchandise inventory balance at the end of the fiscal year the entry might be

a. Debit merchandise inventory, credit sales

b. Debit merchandise inventory, credit income summary.c.Debit Income summary, credit cost of goods

#4#4

The best time to take a physical inventory would be when inventoryA. Is highestB. Any time, when staff is availableC. Is lowest

#5#5

The change fund would be used for◦A. paying for incidental costs of running the

business, i.e. lunch for a last minute business meeting.

◦B. Making change for cash purchases at the register

◦C. There is no such thing.

#6#6

The entry to establish a petty cash account isA. debit cash, credit petty cashB. Debit petty cash, credit change fundC. Debit petty cash, credit cash

#7#7

You sold merchandise valued at $500 on account with the terms of 2/10, n/15. What is the entry for the transaction?A. Debit acct receivable - $490, debit sales

discount - $10, credit sales $500, B. Debit cash – 490, debit sales discount -$10,

credit sales, $500.C. Debit acct receivable $500, credit sales $500

#8#8

A marketable security would normally be kept forA. 12 months or lessB. Over 12 monthsC. Between 3-5 years

Use the information provided to answer the following 2 questions:

Change fund has $50. cash sales for the day are $800, sales tax for the day is $48. The cash in the drawer at the end of the day is… $888.

#9#9

How much cash did you receive in total from the customers today?A. $848B. $750C.$802

#10#10

Was the drawer short or over today?

a.Overb.Shortc.Neither

#11#11

If the drawer were over, would you debit or credit cash short and over?a. Debitb. Credit

#12#12

When using the allowance method for uncollectible accounts, what is the adjusting entry?

A. Debit allowance for bad debts, credit bad debts expense

B. Debit bad debt expense, credit allowance for bad debts

C. Debit bad debt expense, credit accounts receivable.

#13#13

When estimating the amount of bad debts for a company, which of the following methods will require you to consider the current balance in the allowance account?◦A. % of net sales◦B. Aging of bad debts

#14#14

If one of your customers is unable to pay their account to you in a timely fashion, you might give them the option of this◦A. Note receivable◦B. Note payable◦C. Note receivable discounted

#15#15

What is the due date for a note dated today and due in 45 days?

A. March 31B. April 4C. April 5

#16#16

A note dated January 31 and due in 3 months would be due◦A. February 28◦B. March 30◦C. April 30◦D. April 31

#17#17

Calculate the maturity value of this note…. Principal $550, interest rate is 4%, term is 30 days

A. $551.81B. $1.83C. $1.81D. $551.83

#18#18

The bank has just notified you that a note that you discounted with them has been paid. This is the entry you would make.

A. Debit notes receivable, credit discounted notes receivable

B. Debit notes receivable discounted, credit notes receivable.

C. Debit notes receivable discounted, credit cash

#19#19

The terms are FOB destination – who pays the shipping.◦A. The seller◦B. The buyer◦C. The customer◦D. doesn’t matter

#20#20

Which inventory system is constantly updated?◦A. Perpetual◦B. Periodic

Using the inventory info below, answer the next couple questions.

Beginning inventory

10 $10.00

Purchase 2/10 15 $12.50

Purchase 3/10 20 $7.50

#21#21

If 9 units are left and you use the LIFO method, the ending inventory value would be

A. $90 B. $67.50C. $112.50

#22#22

If the weighted average method is used, what’s the ending inventory value (9 left)?

A.$90B. $67.50C. $87.48D. $9.72

#23#23

When you exchange assets, you recordA. Both gains and lossesB. Only gainsC. Only losses

#24#24

You calculated the book value of an asset by

A. Asset cost – annual depreciationB. Asset cost – accumulated depreciationC. Asset cost + accumulated depreciationD. Asset cost + annual depreciation

#25#25

Asset cost was $25,000, salvage value $100, and the life is 5 years. The asset was purchased on March 10, what is the depreciation for the first year?

A. $4,980B. $4150C.$ 830

#26#26

Using the information from the previous question, but the declining balance method… what is the depreciation for the first year?

A. $10,000B.$9,960C. $8,333

#27#27

Using the information from question #25, calculate the first year depreciation using the sum-of-the years digits.

A.$8,333.33B.$8,300C.$6,917