The XYZ Co. records two sales. One customer pays within the discount period; one customer pays after the discount period has expired. Which line item on the income statement will be the same, regardless of whether the "Gross" method or the "Net" method is used to account for Sales?

Select one:

a. Sales

b. Sales Discounts Forfeited

c. Sales Discounts

d. Net Income

e. Gross Profit

Question 13

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Case Corporation will deposit $10,000 at 10% every January 1st for five consecutive years (1/1/15 - 1/1/19). What will be in the investment fund on December 31, 2020?

Select one:

a. $66,000

b. $73,261

c. $73,872

d. $67,156

e. $61,051

Question 14

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Bill Gates plans to deposit into the bank a single amount on 9/1/15; he desires to withdraw $10,000 on 9/1/22 and $10,000 on 9/1/23. The Interest Rate is 8%. What single amount must be deposited on 9/1/15 to provide for the withdrawals?

Select one:

a. $10,805

b. $11,670

c. $17,833

d. $11,238

e. $13,108

Question 15

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On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000 and a due date of December 31, 2017. The stated rate of interest is 5% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 10% is implicit in the agreed-upon price. The effective amortization method is used. Oxford's journal entry on 1/1/15 to record service revenue will include:

Select one:

a. A credit to Notes Receivable for $600,000

b. A credit to Service Revenue for $600,000

c. A debit to Discount on Notes Receivable for $74,602

d. A credit to Service Revenue for $525,398

e. A credit to Discount on Notes Receivable for $52,145

Question 16

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THE DATA FOR THIS QUESTION ARE THE SAME AS THE DATA FOR THE PREVIOUS QUESTION. On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000 and a due date of December 31, 2017. The stated rate of interest is 5% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 10% is implicit in the agreed-upon price. The effective amortization method is used. Oxford's total interest revenue to be recorded on the income statements during the years 2015 through 2017 will be:

Select one:

a. $90,000

b. $30,000

c. $74,608

d. $164,602

e. $175,321

Question 17

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The following information was taken from Cody Co.'s accounting records for the year ended December 31, 2016.

There was no work in process inventory at the beginning or end of the year. Cody's 2016 cost of goods sold is:

Select one:

a. $895,000

b. $910,000

c. $950,000

d. $945,000

e. $865,000

Question 18

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Given:

Net Income is:

Select one:

a. Understated $16

b. Understated $24

c. Overstated $6

d. Understated $26

e. Understated $10

Question 19

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Case Corp. had accounts payable of $100,000 recorded in the general ledger as of December 31, 2012. The Accounts Payable balance included the following recorded purchases on credit:

In Case's December 31, 2012 balance sheet, the accounts payable should be reported in the amount of:

Select one:

a. $75,000

b. $92,000

c. $88,000

d. $78,000

e. $80,000

Question 20

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Use the following information for the month of May:

Assuming that a perpetual inventory system is used, what is Cost of Goods Sold on a LIFO basis?

Select one:

a. $610

b. $680

c. $660

d. $570

e. $600

Question 21

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Given the following data, by how much would taxable income change if periodic FIFO is used rather than periodic LIFO?

Select one:

a. Decrease by $6,000

b. Increase by $8,500

c. Decrease by $8,500

d. Increase by $6,000

Question 22

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During periods of rising prices, a perpetual inventory system would result in the same dollar amount of Cost of Goods Sold as a periodic inventory system under which of the following inventory cost flow methods?

Select one:

a. FIFO, but not LIFO

b. LIFO, but not FIFO

c. Both FIFO and LIFO

d. Neither FIFO nor LIFO

Question 23

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The Blotto Company made the following two errors in counting ending inventory:

Understated 12/31/12 inventory by $2,000

Understated 12/31/13 inventory by $1,000

The combination of these two errors will cause:

Select one:

a. 12/31/13 Retained Earnings to be understated by $3,000

b. 2013 Cost of Goods Sold to be overstated by $3,000

c. 2014 Beginning Inventory to be overstated by $1,000

d. 2014 Cost of Goods Sold to be overstated by $1,000

e. 2013 Net Income to be overstated by $1,000

Question 24

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Given the following information for the Albuquerque Company:

Using dollar-value LIFO, the 12/31/18 inventory for the balance sheet is approximately

Select one:

a. $91,667

b. $90,909

c. $92,909

d. $92,000

e. $91,818

Question 25

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Given the following information for an inventory item of the Scottsdale Corporation:

Using the LCM Rule, the proper inventory amount for the balance sheet is:

Select one:

a. $98

b. $104

c. $101

d. $102

e. $103

Question 26

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The following information is available for October for Jordan Company:

A fire destroyed Jordan's October 31 inventory, leaving undamaged inventory with a cost of $3,000. Using the gross profit method, the estimated ending inventory destroyed by fire is:

Select one:

a. $3,000

b. $197,000

c. $97,000

d. $47,000

e. $147,000

Question 27

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The following information for the month of April is available from the records of Ireland Department Store:

Estimate the retail value of the April 30 inventory using the Conventional Retail Inventory Method:

Select one:

a. $11,470

b. $8,700

c. $12,958

d. $8,990

e. $14,500

Question 28

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Jefferson Services Company records the payment of $325 cash for previously accrued expenses and then makes an accrual of $500 for a revenue. The impact of these two entries on total net income and working capital is an increase of:

Select one:

a. Net Income $325, Working Capital $825

b. Net Income $825, Working Capital $325

c. Net Income $325, Working Capital $500

d. Net Income $500, Working Capital $500

e. Net Income $500, Working Capital $825

Question 29

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The accounts to be credited in the closing entries at year-end include:

Select one:

a. Depreciation Expense, Purchases, Freight-In

b. Freight-Out, Purchase Returns, Purchases

c. Purchase Returns, Purchases, Interest Revenue

d. Prepaid Expense, Depreciation Expense, Freight-Out

e. Depreciation Expense, Purchase Discounts, Sales Returns

Question 30

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The CQ Company uses the perpetual method for inventory. All sales and purchases are on credit. How does CQ account for a return of merchandise to a vendor?

Select one:

a. Debit Purchase Return, Credit Accounts Receivable

b. Debit Accounts Payable, Credit Purchases Receivable

c. Debit Cost of Goods Sold, Credit Inventory

d. Debit Accounts Payable, Credit Inventory

Question 31

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Which of the following is necessary for computing net income but not necessary for computing cost of goods sold?

Select one:

a. Purchases

b. Freight In

c. Beginning Merchandise Inventory

d. Ending Merchandise Inventory

e. Selling Expenses

Question 32

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When the FIFO method is used, ending inventory is assumed to consist of:

Select one:

a. The most recently purchased units

b. The oldest units

c. The units with the highest per unit cost

d. The units with the lowest per unit cost

Question 33

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At a lump-sum cost of $18,000, Obenauer Company recently purchased the following items for resale:

The appropriate cost per unit of ABC inventory is:

Select one:

a. $3.00

b. $6.67

c. $5.00

d. $3.75

e. $2.40

Question 34

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The use of receivables as collateral in a borrowing transaction is:

Select one:

a. Discounting or "Sale with Recourse"

b. Collateralizing or "Transfer of Ownership"

c. Pledging or "Secured Borrowing"

d. Factoring or "Sale without Recourse"

Question 35

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The Snella Corporation uses the allowance method to account for bad debts. How does the write-off of an account receivable affect Working Capital and Allowance for Bad Debts, respectively?

Select one:

a. No Effect, Decrease

b. Decrease, Decrease

c. No Effect, No Effect

d. Decrease, No Effect

e. Decrease, Increase