136A_W08_MT2

136A_W08_MT2 - Feb 27, 2008 Anderson ECON 136A MIDTERM 2...

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Feb 27, 2008 Anderson ECON 136A MIDTERM 2 VERSION 1 Name _________________________ QUESTION NUMBER 26 HAS A FILL IN THE BLANK PORTION- BE SURE TO FILL THOSE IN AND TURN THIS EXAM IN WITH YOUR SCANTRON AND BLUE BOOK!!! WRITE YOUR VERSION # ON YOUR SCANTRON PLEASE. Complete Questions 1-25 on your scantron, and the rest in your blue books (except for the fill in portion of 26 as noted above) 1. In a period of rising prices, the inventory method which tends to give the highest reported inventory is a. moving average. b. FIFO. c. weighted-average. d. LIFO. 2. XYZ, Inc. ships goods FOB shipping point which are in transit at the end of the year. As of the end of the year, XYZ should do what with respect to this inventory? a. Include in inventory. b. Exclude from inventory. c. Include in inventory until the customer pays the invoice. d. Include in inventory until the bill from the trucking company is received. 3. A company employs the percentage of sales method for estimating the allowance for doubtful accounts. Using this method, they estimated during the year that the bad debt expense is $100,000. Also during the year, Management updated their estimate derived from the percentage of sales method and determined it appropriate to increase the allowance for doubtful accounts by $10,000 and subsequently wrote-off $5,000 of uncollectible balances. The proper amount for them to include as bad debt expense during the year is: a. $105,000 b. $115,000 c. $110,000 d. $65,000 4. To produce an inventory valuation which approximates the lower of cost or market using the conventional retail inventory method, the computation of the ratio of cost to retail should a. include markups and markdowns. b. include markups but not markdowns. c. include markdowns but not markups. d. ignore both markups and markdowns.
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MIDTERM 2 v. 1--Page 2 ------------------------------ James Co. has the following data related to an item of inventory: Inventory, March 1 200 units @ $4.20 Purchase, March 7 700 units @ $4.40 Purchase, March 16 140 units @ $4.50 Inventory, March 31 300 units 5. The value assigned to ending inventory if James uses LIFO is a. $1,280. b. $1,334. c. $1,350. d. $1,260. 6. An inventory method which is designed to approximate inventory valuation at the lower of cost or market is a. first-in, first-out. b. last-in, first-out. c. specific identification. d. conventional retail method. 7. When reconciling cash from the bank balance to the general ledger balance, which of the following items will appear as an addition to the bank balance: a. Deposits in transit. b. Bank charges not recorded by the company. c. Both bank charges not recorded by the company AND deposits in transit. d. Outstanding checks. 8. ABC, Inc. sells goods on account with terms 2/10 n 30.
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136A_W08_MT2 - Feb 27, 2008 Anderson ECON 136A MIDTERM 2...

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