17. The inventory turnover is calculated by dividing

a. cost of goods sold by the average inventory.

b. cost of goods sold by the beginning inventory.

c. cost of goods sold by the ending inventory.

d. average inventory by cost of goods sold.

18. The cash (net) realizable value of the accounts receivable at year end equals the year end balances of

a. Accounts receivable Allowance for doubtful accounts

b. Accounts receivable + Allowance for doubtful accounts

c. Credit sales + collections from credit sales

d. Total sales Allowance for doubtful accounts

19. The revenue recognition principle dictates that revenue should be recognized in the accounting records

a. when cash is received.

b. when it is earned.

c. at the end of the month.

d. in the period that income taxes are paid.

20. Leeper Company prepays three months rent on January 1 for $3,000. The remaining balance in the Prepaid Rent account on March 1^st is:

a. $0

b. $1,000

c. $2,000.

d. $3,000

21. On March 1^st Apex Company borrows $10,000 from Citizens Bank on a 6% six month note payable, the amount of interest expense to be accrued for the month of May is:

a. $600

b. $100

c. $50

d. $0

22. If a company has net sales of $1,000,000 and cost of goods sold of $800,000, the gross profit rate is

a. 100%.

b. 70%.

c. 30%.

d. 20%.

23. Waters Company sells merchandise on account for $6,000 to Corrie Company with credit terms of 2/15, n/30 on June 1^st.. Corrie Company returns $800 of merchandise that was damaged, along with a check to settle the account on June 14th. What is the amount of the check?

a. $5,200

b. $5,104

c. $5,096

d. $5,060