Question31

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Indicate the proper accounting treatment for a change from FIFO to average-cost inventory method

Select one:

a.

Accounted for prospectively

b. Accounted for retrospectively

Question32

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On 12/31/14, the Cheboygan Company paid $4,000 of prepaid insurance and expensed the entire amount. The policy covered the period 1/1/15 to 12/31/18.

The error was discovered on 1/10/18; the 2017 books are still open. The correcting journal entry will include what entry to 1/1/17 Retained Earnings?

Select one:

a. $3,000 debit

b. $3,000 credit

c. $2,000 debit

d. $2,000 credit

e. $1,000 debit

Question33

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Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/17 and 12/31/18 contained the following errors:

12/31/18 Working Capitalis in error by:

Select one:

a. $60,000

b. $31,000

c. $28,000

d. $54,000

e. $42,000

Question34

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THE DATA FOR THIS QUESTION ARE THE SAME DATA AS THE PREVIOUS QUESTION

Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/17 and 12/31/18 contained the following errors:

12/31/18 Retained Earnings is in error by:

Select one:

a. $75,000

b. $60,000

c. $54,000

d. $46,000

e. $42,000

Question35

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On October 1, 2015, Nils purchased $500,000, 8% bonds, paying $461,500 plus the accrued interest. The bonds pay interest semiannually on January 1 and July 1. Effective rate is 10%. On the 12/31/15 balance sheet, Interest Receivable is:

Select one:

a. $23,075

b. $18,460

c. $13,333

d. $20,000

e. $10,000