final review

Question 1

what is the maximum number of shares a firm can issue

Answer 1

the max is hte authorized shares

Question 2

how would you write off a uncollectible account receivable

Answer 2

debit allowance for doubtful accounts
credit accounts recivable

Question 3

can a cooperation be held publically accountable

Answer 3

yes

Question 4

what are the two components of shareholders equity

Answer 4

share capital and retained earnings

Question 5

what are 3 characteristics that increase the usefullness of finacial information

Answer 5

verifiability, understandability, comparability

Question 6

A company received a $6,500 deposit from a customer for goods to be delivered the following month.
Under the accrual and cash basis of accounting respectively, the account credited is a

Answer 6

under accrual its a liability
under cash its revenue

Question 7

Which of the following is not an example of an adjusting entry

Answer 7

recording the gain on the sale of equipment

Question 8

how would you enter the sale of merchandise to a customer partly for cash and partly on account

Answer 8

debit accounts recivable credit cash

Question 9

how do you find operating income

Answer 9

its the difference between gross profit and operating expense

Question 10

what is a example of a transaction or activity that is not reflected on the cash flow statement

Answer 10

the purchase of land with shares because there is no exchange of the cash

Question 11

what are examples of internal controls over cash

Answer 11

depositing cash in the bank regularly, ensuring different people are depositing the cash each time, making sure that all cash transactions are recorded

Question 11

what are examples of internal controls over cash

Answer 11

depositing cash in the bank regularly, ensuring different people are depositing the cash each time, making sure that all cash transactions are recorded on a regular basis

Question 12

what is a example of something that is not a internal control for cash

Answer 12

maintaining a seperate facility for storage of perisable goods

Question 13

what are some reasons that a transaction would show up in a companies records but not the banks

Answer 13

• a cheque has been written but the receiving company did not deposit it yet
• the company made a deposit on the last day of the month
• the company recorded a payment received however forgot to deposit the cheque

Question 14

what is not a reason that a transaction is recorded on the companies side but not the banks

Answer 14

banks charging a service fee

Question 15

what cost formula would be the best use for storage of inventory of liquids stored in tanks

Answer 15

weighted average

Question 16

when would you use FIFO

Answer 16

when you have a inventory of goods and you assume that the goods in inventory the longest are the first to go out (be sold)

Question 17

when would you use the periodic cost formula

Answer 17

when you occur costs related to the production process

Question 17

when would you use the periodic cost formula

Answer 17

when you occur costs related to the production process

Question 18

when would you use the perpetual cost formula

Answer 18

you would use perpetual when each item has there own specific price for example a car dealership

Question 19

what is supplier FOB destination mean

Answer 19

that means that supplier has paid for the shipping

Question 20

what is true for intangible assets with indefinite lives

Answer 20

they should be evaluated every year to see if there has been a impairment to its value