1.When factoring accounts receivable which of the following is true?

A.Factoring without recourse means the factor is responsible for uncollectible accounts.

B.Factoring without recourse means the originating firm is responsible for uncollectible accounts.

C.Factoring without recourse means the originating firm has no responsibility for returns or uncollectible accounts.

D.Factoring without recourse means the factor is responsible for returned goods.

2.The advantage of conventional retail method for estimating ending inventory over other retail methods is...

A.It is easier to compute than the other methods retail estimation methods

B.It works for all inventory calculations regardless of a changing inventory/sales mix over time.

C.It comes closest to the true cost value of the ending inventory

D.It results in an estimate that is a fair presentation of lower of cost or market for inventory.

All of the above,

3.When applying the indirect method [allowance method] of accounting for Lower of Cost or Market inventory values which of the following accounts should be debited when the initial adjusting entry is made and market is lower than cost?

A.Loss Due to Market Decline in Inventory Value.

B.Cost of Goods Sold.

C.Inventory

D.Allowance to Reduce Inventory to Market

E.Allowance for loss of inventory

The following data is available for the Reed Company for use in the Conventional Retail method of inventory estimation.

COSTRETAIL

Beginning Inventory$49,250$ 70,000

Purchases165,130 320,000

Freight-in$ 10,000

Net markups$ 20,000

Net markdowns$ 14,000

Net Sales$336,000

____ 4.Calculate ending inventory at cost.

A. $60,000

B. $88,000

C. $33,600

D. $32,860

E. $33,000

F. $36,600