uncollectible and must be written off/i
Under the allowance method, the cash realizable value of receivables is the same both
before and after an account has been written ofl.<
26. An aging schedule is prepared only for old accounts receivables that hav
34. Nontrade receivables should be reported separately from trade receivables. Why is this
statement either true or false?
a. It is true because trade receivables are current assets and non-trade receivables are
b. It is false because all curre
property, plant, equipment, and land.
47. The cost of land does not include
a. real estate brokers' commission.
bf: annual property taxes.
@ accrued property taxes assumed by the purchaser.
d. title fees.
48. The Land account would include all of the foll
38. The nancial statements of the Nelson Manufacturing Company reports net sales of
$300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year
and end of year, respectively. What is the accounts receivable turnover for Nelson?
Q unauthorized use.
Sams Grocery Store has the following policy. Only one cashier can have access to a
cash drawer. Which internal control principle supports this policy?
a. Documentation procedures.
b. Segregation of duties.
0. Physical controls.
40. For contracts that include more than one separate performance obligation:
A. Revenue is recorded ever time at the fair value of each performance obligation.
B. Revenue is recognized in the amount of the contract price on the date the last separate
. 30. Freda's Florist reported the following beforetax income statement items for the year ended
December 31, 2016:
Operating income 7 $250,000
Income on discontinued operations $70,000
All income statement items are subject to a 40% income tax rate. In i
Bonding means insuring a company against theft by employees./<
It is unlikely that a company would want to bond its employees who handle cash or
inventory. g _
An effective system of internal control
4' 732. Major 00. reported 2016 income of $300,000 from continuing operations befote income taxes and a
before-tax loss on discontinued operations of $80,000. All income is subject to a 30% tax rate. in the
2016 income statement, Major Co. would show the
@ unit costs are determined by dividing the quantities on the summary sheets by the
total inventory costs.
9. When is a physical inventory usually taken?
a. When goods are not being sold or received.
b. When the company has its greatest amount of inventor
million. In the 2016 income statement for Foxtrot 00., under discontinued operations it would
A. $6 million loss.
B. $10 million loss.
C. $13.2 million income.
D. None of the other answers is correct.
NOVEMBER 8, 2016
Flaw materials inventories are the goods that a manufacturing company has completed
and are ready to be sold to customers.
A manufacturers inventory consists of raw materials, work in process, an
36. Staff Accounting Bulletin No. 101 was issued by the FASB to clarify its guidelines on revenue
37. Which of the following is one of the steps for recognizing revenue?
A. Identify the performance obligations of the contract.
38. Which of the following is not one of the five steps for recognizing revenue?
A. Recognize revenue when (or as) each performance obligation is satisfied.
B. Determine the transaction price.
0. Allocate the transaction price to each performance obligati
. 1. The primary function of nancial accounting is to provide relevant nancial information to parties
external to business enterprises.
, 2. Accrual accounting attempts to measure revenues and expenses