Accounting Test 2

If a company reported the following items on its income statement... Cost of goods sold: $6,000 income tax expense: $2,000 interest expense: $500 operating expenses: $3,500 sales revenue: $14,000 what amount would be reported for the subtotal "income from operations"?

Which of the following is not a normal function of a financial analyst?

The classified balance sheet format allows one to ascertain quickly which of the following?

When a company issues stock with a par value, what columns are typically presented in the statement of stockholders' equity?

When a company using the allowance method writes off a specific customer's $100,000 account receivable from the accounting system, which of the following statements are true? 1. Total stockholders' equity remains the same. 2. Total assets remain the same. 3. Total expenses remain the same.

When using the allowance method, as bad debt expense is recorded,

The inventory costing method selected by a company will affect

Which of the following is not a component of the cost of inventory.

An increasing inventory turnover ration

Which of the following regarding the lower of cost or market rule for inventory are true? 1. The lower of cost or market rule is an example of the historical cost principle. 2. When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. 3. When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced.

Which inventory method provides a better matching of current costs with sales revenue on the income statement and outdates values for inventory on the balance sheet?

Which of the following is false regarding a perpetual inventory system?

Under what method(s) of depreciation is an asset's net book value the depreciable base (the amount to be depreciated)?

A company wishes to report the highest earnings possible for financial reporting purposes. Therefore, when calculating depreciation,

How many of the following statements regarding goodwill are true? -Goodwill is not reported unless purchased in an exchange. -Goodwill must be reviewed annually for possible impairment. -Impairment of goodwill results in a decrease in net income.

When recording depreciation, which of the following statements is true?

The proper treatment of outstanding checks on the bank reconciliation requires:

The unadjusted debit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on the percent of sales method. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account?

The unadjusted credit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account?

During periods of rising prices, which of the following is true?

Consider the following: ITEM A: Units on hand = 2,000 Cost/Unit = $5.00 Market/Unit = $5.50 ITEM B: Units on hand = 3,000 Cost/Unit = $4.50 Market/Unit = $3.00 Using the lower of cost or market rule applied on an item-to-item basis., what will be the value of the ending inventory reported on the balance sheet?

Inventory at the end of the current period was understated because one bin of inventory was not counted and its value not included in the ending inventory totals. Because of this error:

An asset with an estimated 5-year useful life and an estimated residual value of $5,000 was purchased for $22,000 cash plus a $500 delivery fee on the first day of the fiscal year. Using the straight-line method, determine the depreciation expense for the second fiscal year?

An asset with an estimated 10-year useful life and an estimated residual value of $5,000 was purchased for $28,000 cash on the first day of the fiscal year. Based on the declining balance method at twice the straight-line rate, what is the depreciation expense for the second fiscal year.

Goodwill as reported in a balance sheet: