accting 301 practice exam 2 min shen

accting 301 practice exam 2 min shen - Practice Exam II...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Practice Exam II ACCT 301 Fall 2010 I. Multiple Choices 1. On December 31, 2009, Troy Inc., had the following accounts and balances before adjustment: Accounts Receivable $80,000 Allowance for Uncollectible Accounts 2,000 Net Sales 500,000 Troy estimates that its bad debt expense is 2% of net sales. The balance of Allowance for Uncollectible Accounts after adjustment should be: A) $10,000. B) $12,000. C) $1,600. D) $3,600. Answer: B 2. An improvement made to a machine increased its fair market value and its productive capacity by 25% without extending the machine’s useful life. The cost of the improvement should be: A) Expensed B) Debited to Accumulated Depreciation C) Debited to Machinery D) Allocated between Machinery and Accumulated Depreciation Answer: C 3. When the allowance method is used, the entry which is appropriate when a particular account is written off as uncollectible should include a A) Debit to accounts receivable. B) Debit to bad debt expense. C) Debit to allowance for doubtful accounts. D) Debit to sales revenue. Answer: C
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 4. A $15,000 overstatement of the 2009 ending inventory of the Fullerton Corporation was discovered after the financial statement for 2009 were prepared. The effect of the inventory error on the 2009 financial statement was A) Current assets were overstated and net income was understated. B) Current assets were understated and net income was understated. C) Current assets were overstated and net income was overstated. D) Current assets were understated and net income was overstated. Answer: C 5. Benjamin Company began the year with a balance in inventory of $110,000 and ended the year with a balance of $102,000. The net sales for the year were $983,000 with a gross profit on sales on $295,000. What was the inventory turnover? A) 2.78 times. B) 9.27 times. C) 6.49 times. D) 2.89 times. Answer: C 6. During a period of steadily falling prices. Which of the following methods of measuring the cost of goods sold is likely to result in the lowest taxable income ? A) Specific identification B) Weighted average cost C) FIFO D) LIFO Answer: C 7. Elmer Company sold merchandise on credit in 2009 at a total gross invoice price of $500,000. It had the following correct account balances at the beginning and end of the year: January 1 December 31 Accounts receivable (gross) $120,000 $140,000 Allowance for uncollectibles 2,500 3,500 During the year it wrote off $5,000 in gross accounts receivable as uncollectible. Elmer Company’s collections from accounts receivable in 2009 amounted to A) $475,000 B) $494,000
Background image of page 2
3 C) $495,000 D) $496,000 Answer: A 8. Matt’s Mattress Company made the following journal entries (1) to write off an account judged to be uncollectible and (2) to record bad debt expense for 2000: (1) Allowance for doubtful accounts $1,000 Accounts receivable $1,000 (2) Bad debt expense
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/16/2011 for the course ACCOUNTING 301 taught by Professor Chen during the Spring '10 term at George Mason.

Page1 / 10

accting 301 practice exam 2 min shen - Practice Exam II...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online