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chap 7 - 1 Accounting information is useful for several...

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1. Accounting information is useful for several kinds of decisions. For which decision situation would accounting information NOT be useful? c. Production managers evaluating the quality of materials used in manufacturing. ________________________________________ 2. Gross profit is calculated as: a. Sales - Cost of goods sold. ________________________________________ 3. The term "compound entry" means that the journal entry has: a. more than two accounts involved in the entry. _______________________________________ 4. During 2005, the Latrex Corporation had cash and credit sales of $47,000 and $45,500 respectively. The company also collected accounts receivable of $26,700 and incurred expenses of $68,500, 80 percent of which were paid during the year. In addition, Latrex paid $24,000 for a 12-month building rental, beginning on July 1, 2005. Latrex's accrual- basis net income (loss) for 2005 was: a. $12,000. ________________________________________ 5. Companies that sell stock on the stock exchanges are required to obtain an independent audit of their accounting system and records. This audit must be conducted by a: d. Certified Public Accountant.
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_______________________________________ 6.
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