Exam 2 - Practice 2

Exam 2 - Practice 2 - Name _ ACCT 2103 Exam #2 1. During...

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Name _______________________________ ACCT 2103 Exam #2 1. During 2010 and 2011, CBA Inc. drove their truck 15,000 and 22,000 miles, respectively, to deliver supplies to their customers. If they originally purchased the truck at the beginning of 2010 for $175,000 and the truck has an estimated life of 10 years and 320,000 miles with an estimated residual value of $15,000, what amount of depreciation expense should CBA record in 2011 using the activity method? A. $16,000 B. $11,000 C. $18,500 D. $7,500 2. Credit sales are recorded as: A. Debit cash; credit revenues. B. Debit accounts receivable, credit revenues. C. Debit cash; credit unearned revenues. D. Debit revenues, credit accounts receivable. 3. On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on December 5. How would Flores record the collection of cash on December 5? A. B. C. D.
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4. Which one of the following regarding the book value of an asset is correct? A. It is the historical cost at which the asset was purchased. B. It is the fair value of the asset if the asset is sold to the market. C. The book value at the end of the year is the historical cost of the asset minus the depreciation expense for that asset during the year. D. It reflects the original cost of the asset less accumulated depreciation. 5. Anthony Corporation reported the following amounts for the year: Anthony's inventory turnover ratio is: A. 2.14. B. 2.42. C. 2.76. D. 3.21. 6. Sherry Co. purchases a piece of equipment on January 1, 2010, for $40,000 and the equipment has an expected useful life of five years. Its residual value is estimated be $4,000. Assuming Sherry Co. uses double- declining balance depreciation method, what is the depreciation expense for the equipment for 2011? A. $14,000 B. $7,000 C. $16,000 D. $9,600 7. Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month. Cost of goods sold assuming LIFO would be: A. $1,720. B. $1,730. C. $1,700. D. $1,710.
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8. Sandburg Veterinarian reports the following information for the year: What is Sandburg's receivables turnover ratio? A. 5.0. B. 0.2. C. 1.2. D. 6.0. 9. Which of the following is recorded by a credit to accounts receivable? A. Write-offs of bad debts. B. Estimating the annual allowance for doubtful accounts. C. Estimating annual sales returns. D. Sale of inventory on account. 10. At December 31, Amy Jo's Appliances had adjusted account balances in accounts receivable of $311,000 and $970 (credit) in the allowance for uncollectible accounts. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be: A. $5,250. B. $6,450.
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This note was uploaded on 11/23/2011 for the course ACCT 2103 taught by Professor Burnett during the Fall '08 term at Oklahoma State.

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Exam 2 - Practice 2 - Name _ ACCT 2103 Exam #2 1. During...

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