Exam 2 - True/False If the following statements are true...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
True/False. If the following statements are true, circle T; if they are false, circle F. 1. T F If a person wanted to know the interest rate that, when compounded annually, would cause a $2,000 deposit to triple in size in 20 years, the problem could be solved by using either an amount of a single sum approach or a present value of a single sum approach. 2. T F In an amount of an annuity due, the final rent occurs one period before the future value. 3. T F The income statement approach of determining bad-debt expense emphasizes the reporting of accounts receivable at net realizable value. 4. T F In a deferred annuity, the deferral period affects the calculation of the present value but not the future value. 5. T F A pledging of accounts receivable is normally accounted for as a sale of the receivables. 6. Tron Corporation's inventory cost on its balance sheet was lower using first-in, first-out than last-in, first-out. Assuming no beginning inventory, what direction did the cost of purchases move during the period? A. Up. B. Down.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Steady. D. Cannot be determined. 7. A company using a periodic inventory system neglected to record a purchase of merchandise on account at year end. This merchandise was omitted from the year-end physical count. How will these errors affect assets, liabilities, and stockholders' equity at year-end and net income for the year? Stockholders' Net Assets Liabilities Equity Income a. No effect understate overstate overstate b. No effect overstate understate understate c. Understate understate no effect no effect d. Understate no effect understate understate 8. Fredd corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follow: Product A Product B Historical cost $ 68 $ 90 Replacement cost 60 92 Estimated cost to dispose 20 65 Estimated selling price
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/03/2012 for the course ACCT 325 taught by Professor Warren during the Spring '08 term at Rutgers.

Page1 / 10

Exam 2 - True/False If the following statements are true...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online