1. Which inventory costing method reflects a cost flow that is in the order in which the costs

are incurred and will report the most current prices in ending inventory?

a. First in first out

b. Specific identification

c. Last in first out

d. Average cost

2. Which inventory costing method reflects the cost flow in the reverse order and reports the earliest costs in ending inventory?

a. First in first out

b. Last in first out

c. Average cost

d. Specific identification

3. During a period in which prices are falling, which of the following inventory methods generally results in the lowest reported amount for inventory on the balance sheet?

a. average method

b. LIFO method

c. FIFO method

d. can not tell without more information

4. Baines, Inc. had the following information available for its inventory of Item #565 during 2014:

Beginning inventory	10 units at $61
First purchase	25 units at $63
Second purchase	30 units at $64
Third purchase	15 units at $73

Baines uses the periodic system and reports that there are 20 units of Item #565 on hand at the end of the year. What is the amount of the inventory at the end of the year according to the average cost method?

a. $1,300

b. $1,305

c. $1,415

d. $1,236

5. Troy, Inc. had the following information available for its inventory of Item #XQ-211 during 2014:

Beginning inventory	10 units at $60
First purchase	25 units at $63
Second purchase	30 units at $64
Third purchase	10 units at $70

Troy uses the periodic system and reports that there are 20 units of Item #XQ-211 on hand at the end of the year. What is the amount of inventory at the end of the year according to the last-in, first-out method?

a. $1,230

b. $1,220

c. $1,240

d. $1,340

6. Harris Industries had the following information available for its inventory of Item #FX-112 during 2014:

Beginning inventory	10 units at $50
First purchase	25 units at $53
Second purchase	30 units at $54
Third purchase	15 units at $60

Harris uses the periodic system and reports that there are 20 units of Item #FX-112 on hand at the end of the year. What is the amount of inventory at the end of the year according to the first-in, first-out method?

a. $1,030

b. $1,140

c. $1,170

d. $1,060

7. How is the amount of deposits in transit included on the bank statement reconciliation?

a. as a deduction from the balance per the depositor's books

b. as a deduction from the balance per bank statement

c. as an addition to the balance per bank statement

d. as an addition to the balance per depositor books

8. Included with the bank statement was a debit memorandum for an NSF check received from a customer. This item would be shown on the bank reconciliation as a(n)

a. deduction from the balance per depositor's records

b. addition to the balance per bank statement

c. deduction from the balance per bank statement

d. addition to the balance per depositor's records

9. In preparing the August bank reconciliation, Micro Industries collected the following reconciling information:

		Cash balance per books, 8/31	$3,500
		Deposits in transit	150
		Notes receivable and interest collected by bank	850
		Bank charge for check printing	20
		Outstanding checks	2,000
		NSF check	170

What is the adjusted cash balance per books on August 31?

a. $4,160.

b. $4,010.

c. $2,310.

d. $2,460.

10. Dobb Company established a $100 petty cash fund. Curr has cash of $18 and receipts of $80. The journal entry to replenish the account would include a

a. credit to Petty Cash for $84.

b. debit to Cash for $80.

c. debit to Cash Over and Short for $2.

d. credit to Cash for $80

11. Jackson Companys Allowance for Doubtful Accounts has a debit balance of $500 at the end of the year (before adjustment). Jackson estimates uncollectible accounts expense at 3% of net sales. If net sales are $600,000, what is the amount of the adjusting entry to record bad debt expense for the year?

a. $18,500

b. $17,500

c. $18,000

d. none of the above

12. After its accounts are adjusted and closed at the end of its fiscal year, Larkin Companys Accounts Receivable has a balance of $450,000 and its Allowance for Doubtful Accounts has a balance of $25,000. What is the net realizable value of Larkins accounts receivable?

a. $25,000

b. $425,000

c. $450,000

d. $455,000

13. Under which caption is the Allowance for Doubtful Accounts listed on the balance sheet?

a. stockholders equity

b. investments

c. fixed assets

d. current assets

14. March Companys Allowance for Doubtful Accounts has a credit balance of $1,100 at the end of the year (before adjustment). An analysis of its customers' accounts indicates doubtful accounts of $12,900. Which of the following is the correct adjusting entry to record bad debt expense for the year?

a. debit Uncollectible Accounts Expense, $14,000; credit Allowance for Doubtful Accounts, $14,000

b. debit Allowance for Doubtful Accounts, $14,000; credit Uncollectible Accounts Expense, $14,000

c. debit Allowance for Doubtful Accounts, $11,800; credit Uncollectible Accounts Expense, $11,800

d. debit Uncollectible Accounts Expense, $11,800; credit Allowance for Doubtful Accounts, $11,800

15. Harper Company receives a 6% interest bearing note from Mastro Company on November 1^st to settle a $20,000 account receivable. The note matures in six months. At December 31, Harper should record interest revenue of

a. $0

b. $100

c. $200

d. $600

16. Which of the following is generally classified as a current liability?

a. Two-year notes payable.

b. Bonds Payable.

c. Mortgage payable.

d. Unearned Rent.

17. Which of the following taxes would be subtracted in calculating an employee's net pay?

a. FUTA taxes

b. SUTA taxes

c. FICA taxes

d. all of the above

18. Sarah Lucky is paid $25 per hour, with time and a half for all hours worked in excess of 40 during a week. The following is Sarahs payroll data for the current week: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is Sarahs net pay?

a. $875.00

b. $838.62

c. $857.00

d. $1133.14

19. Anton Company issued an $80,000, 6%, 120-day note payable to Bailey Company on June 8^th. What is the due date of the note?

a. October 8

b. October 7

c. October 6

d. October 5

20. On March 1, 2014, Baxter Industries borrowed $40,000 by signing a 30 day, 6% interest bearing note. When the note is paid on March 31, the entry to record the payment should include a

a. debit to Interest Payable $200

b. debit to Interest Expense $200

c. credit to Cash for $40,000

d. credit to Cash for $42400