Acct Practice For Chapters 6 and 7 Fall 2006

Acct Practice For - Accounting 315 Practice Questions and Problems Chapters 6 and 7 Multiple Choice Questions 1 When goods or services are

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Accounting 315 Practice Questions and Problems Chapters 6 and 7 Multiple Choice Questions : 1. When goods or services are exchanged for cash or claims to cash (receivables), revenues are a. earned. b. realized. c. recognized. d. all of these. 2. When the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues, revenues are a. earned. b. realized. c. recognized. d. all of these. 3. The profession requires that the percentage-of-completion method be used when certain conditions exist. Which of the following is not one of those necessary conditions? a. Estimates of progress toward completion, revenues, and costs are reasonably dependable. b. The contractor can be expected to perform the contractual obligation. c. The buyer can be expected to satisfy some of the obligations under the contract. d. The contract clearly specifies the enforceable rights of the parties, the consideration to be exchanged, and the manner and terms of settlement. 4. In accounting for a long-term construction-type contract using the percentage-of-completion method, the gross profit recognized during the first year would be the estimated total gross profit from the contract, multiplied by the percentage of the costs incurred during the year to the a. total costs incurred to date. b. total estimated cost. c. unbilled portion of the contract price. d. total contract price. 5. Under the cost recovery method of revenue recognition,
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a. profit is recognized on a proportionate basis as the cash is received on the sale of the product. b. profit is recognized when the cash received from the sale of the product is greater than the cost of the product. c. profit is recognized immediately. d. none of these. 6. Preparing the statement of cash flows involves all of the following except determining the a. cash provided by operations. b. cash provided by or used in investing and financing activities. c. change in cash during the period. d. cash collections from customers during the period. 7. Which of the following is a generally accepted method of determining the amount of the adjustment to bad debts expense? a. A percentage of sales adjusted for the balance in the allowance b. A percentage of sales not adjusted for the balance in the allowance c. A percentage of accounts receivable not adjusted for the balance in the allowance d. An amount derived from aging accounts receivable and not adjusted for the balance in the allowance 8. Carson Construction Co. uses the percentage-of-completion method. In 2003, Carson began work on a contract for $1,650,000 and it was completed in 2004. Data on the costs are:
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This note was uploaded on 03/26/2008 for the course ACCT 229 taught by Professor Strawser during the Fall '06 term at Texas A&M.

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Acct Practice For - Accounting 315 Practice Questions and Problems Chapters 6 and 7 Multiple Choice Questions 1 When goods or services are

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