1. Which of the following is NOT intangible assets?

Franchise

Goodwill

Trademarks

Long-term investment

2. Which of the following statements is correct with respect to inventories?

Under FIFO, the ending inventory is based on the earliest units purchased.

The FIFO method assures that the costs of the earliest goods acquired are the first to be sold.FIFO seldom coincides with the actual physical flow of inventory.

It is generally good business management to sell the most recently acquired goods first.

3. Goods in transit should be included in the inventory of the buyer when the:

terms of sale are F O B destination.

goods reach the buyer.

public carrier accepts the goods from the seller.

terms of sale are F O B shipping point.

4. Which of the following statements is true regarding inventory cost flow assumptions?

A company must comply with the method specified by industry standards.

A company may use more than one costing method concurrently.

A company must use the same method for domestic and foreign operations.

A company may never change its inventory costing method once it has chosen a method.

5. Villa Sales Company had the following amounts related to its business: Beginning inventory, $12,000; Purchases, $43,000; Net sales, $50,000; and Gross profit, $15,000.

The amount of the ending inventory is

$54,000.

$19.000.

$20.000.

$35.000.

6. If a company has sales revenue of $634000. net sales of $600000, and cost of goods sold of $378000, the gross profit rate is

37.0%.

40.4%

63.0%.

59.6%.

7. A debit balance in the Allowance for Doubeful Accounts

Is the normal balance for that account

Indicates that actual bad debt write-offs have been less than what was estimated

Cannot occur if the percentage of sales method of estimating bad debts is used

Indicates that actual bad debt write-offs have exceeded previous provisions for bad debts

8. The method most commonly used to compute depletion is the

straight-line method.

double-declining-balance method.

C effective interest method.

units-of-activity method.

9. If a plant asset is retired when it is fully depreciated and there is no salvage value,

a loss on disposal occurs.

neither a gain nor a loss occurs.

either a gain or a loss can occur.

a gain on disposal occurs.

10. The balance in the Accumulated Depreciation account represents the

amount to be deducted from the cost of the plant asset to arrive at its fair market value

.amount charged to expense since the acquisition of the plant asset.

cash fund to be used to replace plant assets.

amount charged to expense in the current period.

11. Understating beginning inventory will understate

assets.

cost of goods sold.

net income.

owner's equity.

12. Trendy Toy Company purchased 1,000 toys at a cost of $50 each. Trendy Toys has 200 toys in inventory at year-end with a net realizable value of $55 each. The ending inventory at lower-of-cost-or-net realizable value is

$5,000.

$9,000.

C$10,000.

$1,000.

13. In a period of deflation, FIFO will result in

lower net purchases than LIFO.

lower cost of goods sold than LIFO.

higher income tax expense than LIFO.

lower net income than LIFO.

14. The declining-balance method of depreciation produces

an increasing depreciation expense each period.

a declining percentage rate each period.

a constant amount of depreciation expense each period.

a decreasing depreciation expense each period.

15. Interest is usually associated with

accounts receivable.

notes receivable.

doubtful accounts

bad debts.

16. Recording depreciation each period is necessary in accordance with the

historical cost principle.

asset valuation principle.

going concern principle.

expense recognition principle.

17. If a company sells its accounts receivables to a factor,

there is a gain on the sale of the receivables.

the factor pays a commission to the seller.

the seller pays a commission to the factor.

the seller defers recognition of sales revenue until the account is collected.

18. Under the allowance method, writing off an uncollectible account

affects both balance sheet and income statement accounts.

affects only income statement accounts.

affects only balance sheet accounts.

is not acceptable practice.

20. Tinker BEl Company has the following:

Units. Unit Cost

Inventory, Jan. 1 8,000 $11

Purchase, June 19 13,000 12

Purchase, Nov. 8 5,000 13

If Tinker Bell has 9,000 units on hand at December 31, the cost of the ending inventory under FIFO is

$117,000

.$108,000.

$113,000.

$99,000.

21. The following totals for the month of April were taken from the payroll register of Swifty Company.

Salaries and wages $72500

FICA taxes withheld. 5505

Income taxes withheld 14900

Medical insurance deductions

2660

Federal unemployment taxes

182

State unemployment taxes

1306

The journal entry to record the monthly payroll on April 30 would include a

debit to Salaries and Wages Expense for $72500.

debit to Salaries and Wages Expense for $57600.

credit to Salaries and Wages Payable for $72500.

debit to Salaries and Wages Payable for $72500.

22. Allowance for Doubtful Accounts on the balance sheet

appears under the heading "Other Assets.

"increases the cash realizable value of accounts receivable.

is offset against accounts receivable.

is offset against total current assets.

23. When a note receivable is dishonored,

the maturity value of the note is written off.

Accounts Receivable is debited if eventual collection is expected.

interest revenue is never recorded.

bad debts expense is recorded.

24. The cost of a purchased building includes all of the following except

closing costs.

all of these are included.

property tax paid for the period after the purchase.

remodeling costs.