WIDGETS R US QUESTIONS
You own Widgets R Us and are preparing your year-end financial statements.
1. What inventory system do you use and why? What are its advantages and
If the widgets were high dollar large items, I would use the Specific
Explain the special feature that makes callable bonds attractive to an issuing corporation.
Why would some bonds be classified as secured bonds? Provide examples of common
type secured bonds. Explain what is meant by bonds being issued at premium and at a
Accounting is commonly divided into two sectors. One is called public accounting and the
other is private accounting. While public and private accounting overlap various
professional certifications are designed to attest to competency for spec
How does the FIFO method differ from the average costing method of process costing
system? Provide an example of FIFO and explain:
The FIFO method stands for First In First Out. This means the first items purchased for
inventory are the first items to be
How did Mr. Madoff keep his new investments at such a high rate of return and keep
paying off investors and giving to charities? Explain how he was able to do what he did
financially so long:
This wasnt a scheme that involved just thousands or even millio
How do the percent of revenue method and the percent of receivables method estimate
uncollectible accounts expense differ?
Percent of revenue focuses on the previous years percentage of uncollectible accounts
verses service revenue. Percent of receivables
What are the two fundamental equality requirements of the double-entry accounting
system? Define debit and credit and explain how assets, liabilities, common stock, retained
earnings, revenues, expenses, and dividends are affected by (increased or decreas
What is the difference between a cost and an expense? When does a cost become an
expense? Do all costs become expenses? Explain.
Not all costs are immediately expenses. If a company buys resources to use in the future
to generate revenue, then it is consi
1. What is meant by the net realizable value for accounts receivable?
This is the amount of accounts receivable that a company estimates it will actually
collect. Companies know that some customers will not pay their bills and the net realizable