ACC 422 Final Exam Study Guide

Preview (5 of 14 Pages)

100%

ACC 422 Final Exam Study Guide - Page 1 preview image

Loading page ...

ACC 422 Final Exam study guide 60 questions and answers (all correct!)100%1) Which of the following is NOT considered cash for financial reportingpurposes?A. Coin, currency, and available fundsB. Money orders, certified checks, and personal checksC. Petty cash funds and change fundsD. Postdated checks and I.O.U.'s2) What is the preferable presentation of accounts receivable from officers,employees, or affiliated companies on a balance sheet?A. As assets but separately from other receivables.B. As offsets to capital.C. As trade notes and accounts receivable if they otherwise qualify as currentassets.D. By means of footnotes only.3) Which of the following is considered cash?A. Money market savings certificatesB. Certificates of deposit (CDs)C. Postdated checksD. Money market checking accounts4) If a company employs the gross method of recording accounts receivablefrom customers, then sales discounts taken should be reported asA. an item of "other expense" in the income statement

ACC 422 Final Exam Study Guide - Page 2 preview image

Loading page ...

ACC 422 Final Exam Study Guide - Page 3 preview image

Loading page ...

B. a deduction from accounts receivable in determining the net realizable valueof accounts receivableC. a deduction from sales in the income statementD. sales discounts forfeited in the cost of goods sold section of the incomestatement5) Assuming that the ideal measure of short-term receivables in the balancesheet is the discounted value of the cash to be received in the future,failure to follow this practice usually does NOT make the balance sheetmisleading becauseA. the allowance for uncollectible accounts includes a discount elementB. the amount of the discount is NOT materialC. most short-term receivables are NOT interest-bearingD. most receivables can be sold to a bank or factor6) Which of the following methods of determining annual bad debt expensebest achieves the matching concept?A. Direct write-offB. Percentage of average accounts receivableC. Percentage of ending accounts receivableD. Percentage of sales7) The accountant for the Orion Sales Company is preparing the incomestatement for 2007 and the balance sheet at December 31, 2007. Orion usesthe periodic inventory system. The January 1, 2007 merchandise inventorybalance will appearA. as an addition in the cost of goods sold section of the income statementand as a current asset on the balance sheet

ACC 422 Final Exam Study Guide - Page 4 preview image

Loading page ...

B. only as an asset on the balance sheetC. only in the cost of goods sold section of the income statementD. as a deduction in the cost of goods sold section of the income statementand as a current asset on the balance sheet8) Eller Co. received merchandise on consignment. As of January 31, Ellerincluded the goods in inventory, but did NOT record the transaction. Theeffect of this on its financial statements for January 31 would beA. net income, current assets, and retained earnings were understatedB. net income, current assets, and retained earnings were overstatedC. net income was correct and current assets were understatedD. net income and current assets were overstated and current liabilities wereunderstated9. If the beginning inventory for 2006 is overstated, the effects of this erroron cost of goods sold for 2006, net income for 2006, and assets atDecember 31, 2007, respectively, areA. understatement, overstatement, no effectB. overstatement, understatement, overstatementC. overstatement, understatement, no effectD. understatement, overstatement, overstatement10) Assuming no beginning inventory, what can be said about the trend ofinventory prices if cost of goods sold computed when inventory is valuedusing the FIFO method exceeds cost of goods sold when inventory is valuedusing the LIFO method?A. Price trend cannot be determined from information given

ACC 422 Final Exam Study Guide - Page 5 preview image

Loading page ...

B. Prices decreasedC. Prices remained unchangedD. Prices increased11) Which method of inventory pricing best approximates specificidentification of the actual flow of costs and units in most manufacturingsituations?A. Base stockB. Average costC. First-in, first-outD. Last-in, first-out12) All of the following costs should be charged against revenue in theperiod in which costs are incurred EXCEPT forA. costs of normal shrinkage and scrap incurred for the manufacture of aproduct in ending inventoryB. manufacturing overhead costs for a product manufactured and sold in thesame accounting periodC. costs which will NOT benefit any future periodD. costs from idle manufacturing capacity resulting from an unexpected plantshutdown13) In no case can "market" in the lower-of-cost-or-market rule be more thanA. estimated selling price in the ordinary course of business less reasonablypredictable costs of completion and disposal, an allowance for an approximatelynormal profit margin, and an adequate reserve for possible future lossesB. estimated selling price in the ordinary course of business

Preview Mode

This document has 14 pages. Sign in to access the full document!

Report

Study Now!

Document Details

Related Documents

Accounting Principles II – Traditional Cost Systems

Accounting Principles II – Statement of Cash Flows

Accounting Principles II – Partnerships

Accounting Principles II – Managerial and Cost Accounting Concepts

Accounting Principles II – Long-Term Liabilities

Accounting Principles II – Investments

Accounting Principles II – Incremental Analysis

Accounting Principles II – Flexible Budgets and Standard Costs

Accounting Principles II – Financial Statement Analysis

Accounting Principles II – Current Liabilities

Company

Explore

Study Tools