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MGT 11A Fall 2007 Ex - MGT 11A Fall 2007 Exam 2A Key 1 When the maker of a note honors a note this indicates that the note is A B C D E Signed Paid

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MGT 11A Fall 2007 Exam 2A Key 1. When the maker of a note honors a note this indicates that the note is: A. Signed. B. Paid in full. C. Guaranteed. D. Notarized. E. Cosigned. Difficulty: Easy Learning Objective: P4 Wild - Chapter 07 #97 2. If a period-end inventory amount is reported in error, it can cause a misstatement in: A. Cost of goods sold. B. Gross profit. C. Net income. D. Current assets. E. All of the above. Difficulty: Easy Learning Objective: A2 Wild - Chapter 05 #84 3. During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is: A. Specific identification method. B. Average cost method. C. Weighted-average method. D. FIFO method. E. LIFO method. Difficulty: Easy Learning Objective: A1 Wild - Chapter 05 #77 4. The amount of bad debt expense can be estimated by: A. The percent of sales method. B. The percent of accounts receivable method. C. The aging of accounts receivable method. D. Only b and c. E. All of the above. Difficulty: Easy Learning Objective: P2 Wild - Chapter 07 #85 1
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5. The credit terms 2/10, n/30 are interpreted as: A. 2% cash discount if the amount is paid within 10 days, with the balance due in 30 days. B. 10% cash discount if the amount is paid within 2 days, with balance due in 30 days. C. 30% discount if paid within 2 days. D. 30% discount if paid within 10 days. E. 2% discount if paid within 30 days. Difficulty: Easy Learning Objective: P1 Wild - Chapter 04 #100 6. In applying the lower of cost or market method to inventory valuation, market is defined as: A. Historical cost. B. Current replacement cost. C. Current sales price. D. FIFO. E. LIFO. Difficulty: Easy Learning Objective: P2 Wild - Chapter 05 #108 7. The understatement of the ending inventory balance causes: A. Cost of goods sold to be overstated and net income to be understated. B. Cost of goods sold to be overstated and net income to be overstated. C. Cost of goods sold to be understated and net income to be understated. D. Cost of goods sold to be understated and net income to be overstated. E. Cost of goods sold to be overstated and net income to be correct. Difficulty: Hard Learning Objective: A2 Wild - Chapter 05 #86 8. A company's cost of goods sold was $4,000. Determine net purchases and ending inventory given goods available for sale were $11,000 and beginning inventory was $5,000. A. Net Purchases: $15,000; Ending Inventory: $7,000. B. Net Purchases: $10,000; Ending Inventory: $15,000. C. Net Purchases: $9,000; Ending Inventory: $6,000. D. Net Purchases: $6,000; Ending Inventory: $7,000. E. Net Purchases: $16,000; Ending Inventory: $20,000 11,000 -5,000 = 6,000 net purchases Difficulty: Hard Learning Objective: C4 Wild - Chapter 04 #89 2
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9. A company had inventory on November 1 of 5 units at a cost of $20 each. On November 2, they purchased 10 units at $22 each. On November 6 they purchased 6 units at $25 each. On November 8, 8 units were sold for $55 each. Using the LIFO perpetual inventory method, what was the value of
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This note was uploaded on 01/22/2011 for the course MGT 11A taught by Professor Armstrong during the Fall '08 term at UC Davis.

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MGT 11A Fall 2007 Ex - MGT 11A Fall 2007 Exam 2A Key 1 When the maker of a note honors a note this indicates that the note is A B C D E Signed Paid

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