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Exam 6: Receivables and Inventories

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Question 51

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Prepare the Current Assets section of a balance sheet using some or all of the following accounts: Cash Property,Plant,and Equipment Accounts Receivable Notes Receivable--90-day note Merchandise Inventory Allowance for Doubtful Accounts Interest Receivable Prepaid Advertising Sales Returns and Allowances

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Current Assets:
Cash
Notes Rec...

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Question 52

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During deflationary periods,the use of the LIFO method of costing inventory will result in a greater amount of net income than would result from the use of the FIFO method.

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B) False

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Question 53

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One of the weaknesses of the direct write-off method is that it

When companies sell their receivables to other companies,the transaction is called factoring.

The person who is to be paid when a note matures is called the payee.

Beginning inventory,purchases,and sales data for May are as follows: The business uses the first-in,first-out inventory costing method.Determine the cost of the inventory on hand at the end of May.

The following units are available for sale during the year: Determine ending inventory cost by (a)FIFO, (b)LIFO,and (c)average cost.

If merchandise inventory is being valued at cost and the price level is steadily rising,the method of costing that will yield the highest net income is

The term "inventory" indicates

The interest on a 6%,60-day note for $5,000 is $50.

A note receivable due in five years is listed on the balance sheet under the caption

Beginning inventory,purchases,and sales for Product XCX are as follows: Assuming a perpetual inventory system and the last-in,first-out method,determine (a)the cost of the merchandise sold for the October 30 sale and (b)the inventory on October 31.

Beginning inventory,purchases and sales data for the month are as follows: Determine the total cost of ending inventory according to (a)FIFO and (b)LIFO.

The units of Product YY2 available for sale during the year were as follows: There are 17 units of the product in the physical ending inventory at March 31.The periodic inventory system is used.Determine the ending inventory cost by (a)FIFO, (b)LIFO,and (c)average cost methods.

Indicate the section of the balance sheet (current assets,fixed assets,investments,current liabilities,long-term liabilities,stockholders' equity)in which each of the following is reported:

The due date on a 90-day note dated June 10 is September 8.

After the accounts are adjusted and closed at the end of the fiscal year,Accounts Receivable has a balance of $500,000 and Allowance for Doubtful Accounts has a balance of $25,000.What is the net realizable value of the accounts receivable?

Generally accepted accounting principles do not normally allow the use of the allowance method of accounting for uncollectible accounts.

A 90-day,10% note for $10,000 dated April 1 is received from a customer on account.The face value of the note is

Calculate the cost of ending inventory using FIFO inventory cost method.