PLEASE ANSWER ALL THE QUESTIONS OR I WILL MARK AS INCOMPLETE

40. When using the allowance method of accounting for uncollectible accounts, the entry to record the estimated bad debts expense is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts. True or False?

41. A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $500, was added to the invoice amount. On June 20, it returned $800 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:

Multiple Choice

a. $9,224.

b. $10,200.

c. $10,500.

d. $10,300.

e. $9,424.

42. Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines' first year depreciation under the units-of-production method.

Multiple Choice

a. $27,000.

b. $54,000.

c. $24,000.

d. $25,800.

e. $48,000.

43. When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is added to net income. True or False?

44. The allowance method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce. True or False?

45. When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current operating liabilities are subtracted from net income. True or False?

46. Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $13,162. Franklin's August bank statement shows $14,237 on deposit in the bank. Determine the adjusted cash balance using the following information:

Deposit in transit	$	4,500
Outstanding checks	$	3,900
Bank service fees, not yet recorded by company	$	50
The bank collected on a note receivable, not yet recorded by the company	$	1,725

The adjusted cash balance should be:

Multiple Choice

a. $18,737

b. $10,337

c. $14,887

d. $13,112

e. $14,837

47. The number of shares that a corporation's charter allows it to sell is referred to as:

Multiple Choice

a. Issued stock.

b. Outstanding stock.

c. Common stock.

d. Preferred stock.

e. Authorized stock.

48. Strods Company reported the following purchases and sales of its only product. Strods uses a periodic inventory system. Determine the cost assigned to the ending inventory using FIFO.

Date	Activities	Units Acquired at Cost	Units Sold at Retail
May 1	Beginning Inventory	150 units @ $10.00
5	Purchase	220 units @ $12.00
10	Sales		140 units @ $20.00
15	Purchase	100 units @ $13.00
24	Sales		90 units @ $21.00

Multiple Choice

a. $2,980

b. $5,440

c. $2,460

d. $2,850

e. $2,590

49. Credit sales are recorded by increasing (crediting) Accounts Receivable. True or False?

50. FIFO is preferred when purchase costs are rising and managers have incentives to report higher income for reasons such as bonus plans, job security, and reputation.

True or false?

51. Brinker accepts all major bank credit cards, including First Savings Bank's, which assesses a 2.5% charge on sales for using its card. On May 26, Brinker had $4,800 in First Savings Bank Card credit sales. What entry should Brinker make on May 26 to record the deposit?

Multiple Choice

a. Debit Accounts Receivable $4,800; credit Sales $4,800.

b. Debit Cash $4,680; debit Credit Card Expense $120; credit Sales $4,800.

c. Debit Cash $4,800; credit Sales $4,800.

d. Debit Cash $4,920; credit Credit Card Expense $120; credit Sales $4,800.

e. Debit Accounts Receivable $4,680; debit Credit Card Expense $120; credit Sales $4,800.

52. A company records the following journal entry: debit Cash $1,470, debit Sales Discounts $30, and credit Accounts Receivable $1,500. This means that a customer has taken what percentage cash discount for early payment?

Multiple Choice

a. 1%

b. 2%

c. 5%

d. 10%

e. 15%

53. Sales Discounts and Sales Returns and Allowances are subtracted in the calculation of net sales. True or false?

54. Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:

Multiple Choice

a.

Accounts ReceivableA. Hopkins	2,000
Allowance for Doubtful Accounts		2,000

b.

Allowance for Doubtful Accounts	2,000
Bad debts expense		2,000

c.

Accounts ReceivableA. Hopkins	2,000
Bad debts expense		2,000
Cash	2,000
Accounts ReceivableA. Hopkins		2,000

d.

Allowance for Doubtful Accounts	2,000
Accounts ReceivableA. Hopkins		2,000

e.

Cash	2,000
Accounts ReceivableA. Hopkins		2,000

55. Which of the following is an accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period the sales are recorded, and (2) reports accounts receivable at the estimated amount of cash to be collected?

Multiple Choice

a. Allowance method of accounting for bad debts.

b. Aging of notes receivable.

c. Adjustment method for uncollectible debts.

d. Direct write-off method of accounting for bad debts.

e. Cash basis method of accounting for bad debts.

56.l Odessa Corporation had 20,000 shares of $2 par value common stock outstanding on July 1. On that day, the board of directors declared a 10% stock dividend when the market value of each share was $9. The stock dividend is to be distributed on July 20 to stockholders of record on July 10. The entry to record the dividend declaration is:

Multiple Choice

a. Debit Retained Earnings $18,000; credit Common Stock Dividend Distributable $18,000.

b. Debit Retained Earnings $18,000; credit Common Stock Dividends Distributable $4,000; credit Paid-In Capital in Excess of Par Value, Common Stock $14,000.

c. Debit Retained Earnings $18,000; credit Common Stock $4,000; credit Paid-In Capital in Excess of Par Value, Common Stock $14,000.

d. Debit Retained Earnings $18,000; credit Common Stock $18,000.

e. No entry is made until the stock is issued.

57. On February 3, Smart Company sold merchandise in the amount of $5,800 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:

Multiple Choice

a.

Cash	5,800
Accounts receivable		5,800

b.

Cash	4,000
Accounts receivable		4,000

c.

Cash	3,920
Sales discounts	80
Accounts receivable		4,000

d.

Cash	5,684
Accounts receivable		5,684

e.

Cash	5,684
Sales discounts	116
Accounts receivable		5,800

58. The U.S. tax code requires:

Multiple Choice

a. Periodic FIFO be used for tax reporting.

b. Periodic LIFO be used for tax reporting.

c. If a company uses FIFO for tax reporting, it must also be used for financial reporting called the FIFO conformity rule.

d. If a company uses LIFO for tax reporting, it must also be used for financial reporting called the LIFO conformity rule.

e. Weighted average be used for tax reporting.

59. A stock split increases total stockholders equity. True or False?

60. The cost of an inventory item includes its invoice cost minus any discount, plus any added or incidental costs necessary to put it in a place and condition for sale. True or False?