QUESTION 1

The ABC Company received a $20,000 note from the CDE Company for merchandise CDE purchased. The terms are 5 years and is non-interest bearing. Which of the following would be included in an adjusting entry at the end of each year?

		A debit to Notes Receivable Discount
		A credit to Notes Receivable Discount
		A credit to interest expense
		None of the above

QUESTION 2

The ABC Company provides the following information regarding their inventory of hats.

Cost = $10 each, Replacement value = $8 each, NRV = $12 each and NRV less profit of $6 each. How much should ABC report hats on their balance sheet?

		$10 each
		$8 each
		$6 each
		$10 each

QUESTION 3

Refer to the following information.

2010 inventory at end of year prices is $100,000, index is 1.00

2011 inventory at end of year prices is $120,000, index is 1.10

2012 inventory at end of year prices is $130,000, index is 1.15

2013 inventory at end of year prices is $110,000, index is 1.20

How much is 2012 inventory at base year prices?

		$132,000
		$113,044
		$122,000
		None of the above

QUESTION 4

Which of the following represents collateralizing of receivables?

		Pledging
		Factoring with recourse
		Factoring without recourse
		None of the above

QUESTION 5

Refer to the following information.

2010 inventory at end of year prices is $100,000 index is 1.00

2011 inventory at end of year prices is $120,000 index is 1.10

2012 inventory at end of year prices is $130,000 index is 1.15

2013 inventory at end of year prices is $110,000 index is 1.20

How much is 2013 dollar value LIFO inventory?

		$132,000
		$126,500
		$111,500
		None of the above

QUESTION 6

The ABC Company factored, without recourse, $40,000 of accounts receivable to the Last National Bank. The Bank charges a 10% fee and 5% for allowances for bad debts. How much cash will ABC receive?

		$40,000
		$34,000
		$32,000
		None of the above

QUESTION 7

The ABC Company reported $350,000in cash and cash equivalent on their 12/31/2014 balance sheet. Which of the following would not be included in the $350,000 balance?

		Petty cash of $200
		Cash of $40,000 held in the bank as a compensating balance
		A $10,000 CD that matures on January 15, 2015
		All of the above would be included in the $350,000