comp_exam_b - COMPREHENSIVE EXAMINATION B (Chapters 6 - 8)...

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COMPREHENSIVE EXAMINATION B (Chapters 6 - 8) Approximate Problem Topic Points Minutes B - I Multiple Choice . ........................................... 20 15 B - II Ratios . ........................................................ 15 10 B - III Bank Reconciliation . ................................... 15 15 B - IV Periodic Inventories . .................................... 12 10 B - V Journal Entries. ............................................ 10 10 B - VI Cash Budget. ............................................... 15 10 B - VII Notes Receivable. ........................................ 13 15 100 85 Checking Work . .......................................... 5 90
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Test Bank for Financial Accounting: Tools for Business Decision Making, Fourth Edition B-2 Problem B - I — Multiple Choice (20 points) Circle the one best answer. 1. All of the following are sections of a cash budget except a. cash disbursements. b. cash receipts. c. financing. d. operating. 2. Which of the following terms best describes the assumption made in applying the four inventory methods. a. Goods flow b. Physical flow c. Cost flow d. Asset flow 3. A check correctly written and paid by the bank for $395 is incorrectly recorded on the company's books for $359. The appropriate adjustment on a bank reconciliation would be to a. deduct $359 from the book's balance. b. deduct $36 from the book's balance. c. deduct $36 from the bank's balance. d. add $36 to the bank's balance. 4. Bad Debts Expense should be recorded a. whenever an account is written off as uncollectible. b. each time a credit sale is made. c. whenever an account written off is recovered. d. at the end of each accounting period. 5. The principles of internal control do not include: a. establishment of responsibility. b. documentation procedures. c. management responsibility. d. independent internal verification. 6. The basis of computing uncollectible accounts that provides a reasonable matching of expenses with revenues is the a. percentage of receivables basis. b. percentage of doubtful accounts basis. c. lower of cost or market basis. d. direct write-off method. 7. A company just starting business purchased three merchandise inventory items at the following prices: first purchase $520; second purchase $550; third purchase $580. If two items were sold during the period and the company used the LIFO costing method, the gross profit for the period would be how much greater or less than if the FIFO costing method had been used? a. Gross profit would be $60 greater. b. Gross profit would be $60 less. c. Gross profit would be the same. d. Gross profit would be $30 greater.
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Comprehensive Examination B B-3 8. An error in the physical count of goods on hand at the end of the current period resulted in a $2,500 overstatement of the ending inventory. The effect of this error in the current period is to a. overstate cost of goods sold. b. understate cost of goods available for sale.
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comp_exam_b - COMPREHENSIVE EXAMINATION B (Chapters 6 - 8)...

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