Day 13

Question 1

What time period does Allowance for sales returns and Uncollectible accounts deal with?

Answer 1

Future

MCQ-00062

Question 2

Using the direct write off method to account for Uncollectible AR. Cash collections equal sales adjusted for the deduction of what accounts?

Answer 2

• Accounts written off
• Increase in AR Balance deduction

MCQ-00269

Question 3

What method of recording Uncollectible amounts expense is consistent with Accrual accounting?

Answer 3

Allowance method

Not direct write off

MCQ-00039

Question 4

Under the allowance method, the entry to write off an uncollected amount is:

Answer 4

has no effect on net Income

Debit - Allowance for Uncollectible accounts

Credit - AR

Allowance Account is decreased

MCQ-00262

Question 5

When the allowance method for Uncollectible accounts is used, how would the collections of an account previously written off effect AR and Allowance for Uncollectible Accounts?

Answer 5

AR = no effect

Allowance = Increase

MCQ-05679

Question 6

Journal entry for Factoring AR with and without recourse

Answer 6

With Recourse:
Cash
Note Rec. Discounted

Without Recourse:
Cash Loss
Note Rec.

MCQ-06597

Question 7

After being held for 40 days, a 120 day 12% interest barring note receivable was discounted by the bank for 15%. The proceeds from the bank equal:

Answer 7

Maturity value less discount at 15%

MCQ-00342

Question 8

An understatement of inventory does what to COGS?

Answer 8

Understated COGS

MCQ-00114

Question 9

Equation: LIFO Periodic inventory balance

Answer 9

Ending Inventory units × oldest cost

MCQ-13092

Question 10

Define: F. O. B. Shipping point

Answer 10

Title will revert to the buyer when the seller delivers goods to common carrier

MCQ-06569

Question 11

Rule: Consignor must include consigned
goods (in the hands of the consignee) in his
own inventory, at his cost plus warehousing
costs of consignor before goods are
transferred to consignee plus shipping costs to
consignee.

Answer 11

MCQ-00111

Question 12

Define: F. O. B. Destination

Answer 12

Ownership of goods is transferred to buyer when they are delivered

MCQ-05608

Question 13

What costs are included in the inventory balance

Answer 13

1. Direct and Indirect Materials
2. Direct and Indirect Labor
3. Insurance

MCQ-09011

Question 14

What is the appropriate treatment of goods held on consignment?

Answer 14

The goods should be included in ending inventory of the consignor

MCQ-06598