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Acct 12
Acct 12
What is NOT affected by the choice of an inventory costing method (that is, between
FIFO, LIFO, and weighted average)?
Mr Goeddee deposits $500 in his savings account at the end of every month for three
years. The account's annual interest rate is 6%. To determine the balance in the
account after three years, he should use:
A) i = 0.5%
B) n = 3.
C) C Table B.2, Future Value of 1
D) All of the above Correct Answer -i = % 0.5
When a firm writes off a bad debt under the allowance method of accounting for bad
debts, what occurs?
Given the following information for Potter Company, what are Net Sales?
A) materiality
B) cost
C) conservatism
D) there is no such principle Correct Answer -A) materiality
A) outstanding checks
B) deposits in transit
C) customer check returned by bank as NSF
D) all of the above would have required a journal entry to correct foster's books
Correct Answer -C) Customer Check returned by bank as NSF
a) revenue recognition
b) consistency
c) time period
d) conservatism Correct Answer -D) Conservatism
Ms Daly deposited $6,000 in an account that earns 4% per year, compounded quarterly.
How much will she have in the account at the end of four years?
a) $ 6,960.00
b) 7,019.40
c) $7,035.60
d) $ 11,238.00 Correct Answer -c) $7,035.60
Which of the following statements is true about the effects of inventory costing methods
during a period of rising prices?
Which of the following is/are true about the account "Allowance for Bad Debts?"
A) it is a contra-asset account
B) it appears on both the balance sheet and the income statement
C) it is added to accounts receivable to report a more conservative amount
D) all the above Correct Answer -a) it is a contra-asset account
Which of the following supports the use of an allowance account for accounting for bad
debts?
a. Matching principle.
b. Conservatism.
c. Both of the above.
d. Neither of the above. Correct Answer -C. Both of the Above