Practice+Test+2+2010+Fall-1 - Accounting 207 Test II Diane...

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

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.
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
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
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
7) In a period of rising prices which of the following inventory methods usually
results in the lowest balance sheet figure for inventory?

8) Inventory costing methods place primary reliance on assumptions about the flow
of