Review Test Submission 2a.docx

Review Test Submission 2a.docx - Course 201620-Prin of...

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Course 201620-Prin of Financial Accounting-22811 Review Test Submission: Test Two Question 1 Calculate the interest on a 90-day, 9% note for $36,000. (Use a 360-day year to compute interest.) Answer: $810 Response Feedback: ($36,000 × 9%) × 90/360 = $810 Question 2 In a large company, the person who is responsible for comparing cash and the bank balance is the ______. Answer: controller Question 3 When a company uses the perpetual inventory method, which of the following would be the entry to adjust inventory to lower-of-cost-or-market? Answer: debit Cost of Goods Sold and credit Merchandise Inventory Question 4 Which of the following is a disadvantage of accepting credit cards or debit cards for a business? Answer: It will have to pay a certain amount as processing fee. Question 5 A deposit receipt is: Answer: retained by the customer as proof of a deposit transaction. Question 6 Thomas Inc. provided the following particulars for year 2015: Cost of Goods Sold (Cost of sales) $1,800,000 Beginning Merchandise Inventory 325,000 Ending Merchandise Inventory 650,000 Calculate the company's inventory turnover ratio for the year. (Round your answer to two decimal places.) Answer: 3.69 times per year Question 7 Which of the following is shown on a multi-step income statement, but not on a single-step income statement? Answer: gross profit Question 8 The bank made an EFT payment of a telephone bill of $5,000. How would this information be included on the bank reconciliation? Answer: a deduction on the book side Question 9 Which of the following statements describes a purchase order? Answer: It is an order to purchase goods from a supplier. Question 10 Which of the following statements describes a receiving report? Answer: It is a report showing that the goods have been received in good condition, as ordered. Question 11 Merchandise Inventory and Cost of Goods Sold appear ________.
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Answer: on the balance sheet and income statement, respectively Question 12 The entity that signs the promissory note and promises to pay the required amount is the ________. Answer: maker of the note Question 13 Misty Inc. had 20,000 units of ending inventory that were recorded at their cost of $5.00 per unit using the first-in, first-out (FIFO) method. The current replacement cost is $4.25 per unit. Which of the following amounts would be reported as Ending Merchandise Inventory on the balance sheet using the lower-of-cost-or-market rule? Answer: $85,000 Response Feedback: Ending Merchandise Inventory = Number of units on hand × Unit cost Ending Merchandise Inventory = 20,000 units × $4.25 per unit = $85,000 Question 14 A company has a petty cash fund amount of $300. When replenished, it has petty cash receipts of $30 for gas expense, $32 for postage expense, $16 for supplies expense, and $10 for miscellaneous expenses. Assume the cash balance is not over or short. In the journal entry, Cash would be credited with ________.
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