Practice+Test+2+2010+Fall+with+Solutions-2

Practice+Test+2+2010+Fall+with+Solutions-2 - Practice TEST...

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Practice TEST 2 Fall 2010 with Solutions Accounting 207 Test II Diane Wright’s Class No graphing calculators, no cell phones, no sharing of calculators permitted. This test and any scrap paper* must be returned along with the scantron sheet. *you must ask for additional scrap paper if needed – you may not use your own. No social security numbers on the scantron or points will be deducted. I will keep confidential the form and content of this exam and will not discuss it in any manner with other students. I realize that violating this rule will result in prosecution through judicial affairs. _____________________________________________signature_____________date
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1) Sales Discounts is a. A contra-revenue account b. An unexpired cost c. An asset d. A liability 2) For the year ended, December 31, 2006, Holiday Company reported Goods Available for Sale of $200,000, sales of $260,000, and gross profit of $100,000. What was the company’s ending inventory on December 31, 2006. a. $40,000 b. $60,000 c. $100,000 d. $120,000 3) The ABC Company uses a perpetual inventory system. The general journal entry to record a $2000 purchase of merchandise on account, with terms of 1/10, n/30, will include a a. Debit to inventory for $2,000 b. Credit to accounts payable for $1,980 c. Credit to purchase discounts of $20 d. Credit to cash for $1,980 4) The clerk in the accounting department who records purchases also records cash payments of invoices a. This adheres to sound internal control policies b. This violates sound internal control policies c. Neither strengthens nor violates internal control 5) Blue and Gold Company, uses the allowance method to estimate uncollectible accounts. Blue and Gold writes off an account from a bankrupt customer. This action will a. Have no effect on total assets b. Reduce total assets c. Reduce net income for the period d. Reduce the amount of stockholder’s equity 6) The weighted average method of costing inventories is used when the a. Physical flow of units cannot be determined b. Company sells large quantities of relatively low cost homogeneous items c. Company sells large quantities of relatively low cost heterogeneous items d. Company sells a limited quantity of high-unit cost items
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7) In a period of rising prices which of the following inventory methods usually results in the lowest balance sheet figure for inventory? a. Average cost method b. LIFO method c. FIFO method d. Need more information to answer 8) Inventory costing methods place primary reliance on assumptions about the flow of a. Goods b. Costs c. Resale prices d. Values 9) Halloween Candy Company’s goods in transit on December 31 include sales made (1) FOB destination (2) FOB shipping point And purchases made (3) FOB destination (4) FOB shipping point Which items should be included in Halloween Candy Company’s Inventory at December 31? a.
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This note was uploaded on 12/05/2011 for the course ACCT 207 taught by Professor Hudchinson during the Fall '08 term at University of Delaware.

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Practice+Test+2+2010+Fall+with+Solutions-2 - Practice TEST...

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