1 Bombay Co uses a periodic inventory system Beginning inventory on January 1 was overstated by $32,000, and its ending inventory on December 31 was understated by $62,000 These errors were not discovered until the next year As a result, Bombay's cost of goods sold for this year was A Overstated by $30,000 B Understated by $30,000 C Understated by $94,000 D Overstated by $94,000 2 Which of the following best demonstrates the full disclosure principle A The company's tax return B The multi step income statement C Disclosure notes to financial statements D The auditors' report 3 Chess Top uses the periodic inventory system For the current month, the beginning inventory consisted of 200 units that cost $65 each During the month, the company made two purchases 300 units at $68 each and 150 units at $70 each Chess Top also sold 500 units during the month Using the average cost method, what is the amount of ending inventory A $10,131 00 B $33,770 00 C $10,500 00 D $33,400 00 4 Monroe Construction Company uses the cost recovery method of accounting In 2018, Monroe began work on a contract it had received which provided for a contract price of $25,000,000 Other details follow 2018 Costs incurred during the year $12,000,000 Estimated costs to complete as of December 31 8,000,000 Billings during the year 11,000,000 Collections during the year 6,500,000 What should be the gross profit recognized in 2018 A $3,000,000 00 B $0 00 C $13,000,000 00 D $5,000,000 00 5 Yummy Foods purchased a two year fire and extended coverage insurance policy on August 1, 2013, and charged the $4,200 premium to Insurance expense At its December 31, 2013, year end, Yummy Foods would record which of the following adjusting entries A Prepaid insurance Dr ($) 875 Insurance expense Cr ($) 875 B Insurance expense Dr ($) 875 Prepaid insurance Cr ($) 875 C Prepaid insurance Dr ($) 3325 Insurance expense Cr ($) 3325 D Insurance expense Dr ($) 875 Prepaid insurance Dr ($) 3325 Insurance payable Cr ($) 4200

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1. Bombay Co. uses a periodic inventory system. Beginning inventory on January 1 was overstated by $32,000, and its ending inventory on December 31 was

Bombay Co. uses a periodic inventory system. Beginning inventory on January 1 was overstated by $32,000, and its ending inventory on December 31 was understated by $62,000. These errors were not discovered until the next year. As a result, Bombay's cost of goods sold for this year was:

A. Overstated by $30,000.

B. Understated by $30,000.

C. Understated by $94,000.

D. Overstated by $94,000.

Which of the following best demonstrates the full disclosure principle?

A. The company's tax return.

B. The multi-step income statement.

C. Disclosure notes to financial statements.

D. The auditors' report.

Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 200 units that cost $65 each. During the month, the company made two purchases: 300 units at $68 each and 150 units at $70 each. Chess Top also sold 500 units during the month. Using the average cost method, what is the amount of ending inventory?

A. $10,131.00

B. $33,770.00

C. $10,500.00

D. $33,400.00

Monroe Construction Company uses the cost recovery method of accounting. In 2018, Monroe began work on a contract it had received which provided for a contract price of $25,000,000. Other details follow:

		2018
Costs incurred during the year		$12,000,000
Estimated costs to complete as of December 31		8,000,000
Billings during the year		11,000,000
Collections during the year		6,500,000

What should be the gross profit recognized in 2018?

A. $3,000,000.00

B. $0.00

C. $13,000,000.00

D. $5,000,000.00

Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2013, and charged the $4,200 premium to Insurance expense. At its December 31, 2013, year-end, Yummy Foods would record which of the following adjusting entries?

A. Prepaid insurance : Dr ($) 875 Insurance expense : Cr ($) 875

B. Insurance expense : Dr ($) 875 Prepaid insurance : Cr ($) 875

C. Prepaid insurance : Dr ($) 3325 Insurance expense : Cr ($) 3325

D. Insurance expense : Dr ($) 875 Prepaid insurance : Dr ($) 3325 Insurance payable : Cr ($) 4200