281Practice Questions-Exam 2

281Practice Questions-Exam 2 - Practice Questions for Exam...

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Practice Questions for Exam 2 1. Which of the following differences  exists between a perpetual and a  periodic inventory system? a. Inventory must be physically counted at least annually. b. Inventory is kept in an asset account. c. Update inventory records every time inventory is purchased or  sold. d. A company should have an internal control system for inventory.   2. How should a company record transportation cost on goods purchased? a. Add to inventory purchases. b. Subtract from cost of goods sold. c. Add to cash. d. Add to accounts receivable. 3. What kind of account is sales returns and allowances?   a. Revenue  c. Contra-Asset b. Contra-Revenue d. Asset 4. Sample’s inventory at the beginning of the year cost $7,000.  During the  year, the company purchased inventory costing $53,000.  Inventory  costing $50,000 was sold on account for $55,000.  How much inventory  should be on hand at the end of the year? a. $3,000  c. $10,000 b. $5,000 d. $12,000 5. The difference between present value and future value will be greater if: a. compounding occurs more often b. the interest rate is higher c. both of the above d. neither of the above   6. Bad debt expense is a(n): a. Contra expense     c. Selling expense b. Part of Cost of Goods Sold   d. Contra asset
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7. Mad Dog Co. reported days sales uncollected of 40.6.  What can you  determine from this information? a. Mad Dog is doing an excellent job of collecting Accounts  Receivable. b. Mad Dog is doing a poor job of collecting Accounts Receivable. c. Mad Dog’s sales are too low. d. None of the above 8. Samsonic wrote off a $45,000 bad debt.  Which of the following three  statements is NOT  true? a. Net accounts receivable remained the same. b. Total assets remained the same. c. The write-off did not affect net income d. All of the above statements are true. 9. Which of the following equations computes cost of goods sold?  a. Purchases + beginning inventory + ending inventory = cost of  goods sold. b. Purchases + beginning inventory = cost of goods sold. c. Purchases – ending inventory = cost of goods sold. d. Purchases + beginning inventory – ending inventory = cost of  goods  sold. 10.
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This note was uploaded on 04/21/2008 for the course ACCT 281 taught by Professor Gingerclark during the Winter '08 term at University of Cincinnati.

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281Practice Questions-Exam 2 - Practice Questions for Exam...

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