10. At the close of its first year of operations, December 31, 20X1, Claire Company had net accounts receivable of $540,000, after deducting the related allowance for doubtful accounts. During 20X1, the company had charges to bad debt expense of $90,000 and wrote off, as uncollectible, specific accounts receivable of $40,000. What should the company report on its balance sheet at December 31, 20X1, as accounts receivable before the allowance for doubtful accounts? A) $670,000 B) $590,000 C) $490,000 D) $440,000 E) None of the above. The correct answer is Bull Co, received merchandise on consignment. As of January 31, Bull included the goods in its physical count of inventory. If Bull uses the periodic method of accounting 11. for inventory, the effect of this on its financial statements for January 31 would be net income, current assets, and retained earnings were overstated. net income was correct and current assets were understated. net income and current assets were overstated and current liabilities were understated A) B) C) D) net income, current assets, and retained earnings were understated 12. Which of the following adjusting entries is eligible to be reversed? A) Recognizing depreciation expense B) Recognizing supplies used up when the purchase was debited to a permanent account C) Recognizing employee salaries earned but not yet paid. D) Recognizing revenue carned from a client that prepaid (prepayment credit to unearned revenue) More than one of the above is reversible. E) 13. Bishop, Inc. utilizes FIFO for its internal record-keeping and LIFO for financial statements. To reach COGS for the income statement, Bishop will... A) Add the change in LIFO reserve to their FIFO COGS B) Subtract the change in LIFO reserve from their FIFO COGS C) Add the change in LIFO reserve to their LIFO COGS D) Subtract the change in LIFO reserve from their LIFO COGS