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Yaeger FAR > Mod 10 Wrong Answers > Flashcards

Mod 10 Wrong Answers Flashcards

0
Q

When shipping terms are FOB destinTion, the only amount to be included in the buyer’s cost of inventory is…

A

It’s purchase price

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1
Q

When the shipping terms are FOB destination the seller bears all costs of transporting the goods of the buyer including…3

A

1 packaging costs
2 shipping costs
3 special handling charges

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2
Q

Purchases are always recorded net of…

A

Trade discounts

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3
Q

When more than one trade discount is applied to a list price it is called…

A

A chain discount

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4
Q

Chain discounts are applied in…

A

Steps

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5
Q

Under FOB Shipping point, Remittance from buyer would include…

A

Any shipping expenses paid by seller

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6
Q

If inventory is written off it should be…

A

Subtracted to get cost of goods sold

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7
Q

Under the net method, purchase discounts not taken are recorded in…

A

Purchase discounts lost account

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8
Q

When the net method is used, purchase discounts lost are…

A

Considered a financial expense and are excluded from cost of inventory

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9
Q

Normal capacity refers to…

A

Range in production levels that will vary based on business

And industry specific factors

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10
Q

For normal capacity actual production may only be used if…

A

It approximates normal capacity

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11
Q

Under LIFO perpetual ending inventory includes…

A

Any purchases made after the last sale

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12
Q

The moving average method requires a new unit cost be computed each time goods are…

A

Purchased

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13
Q

When calculating inventory using the moving average method divide total cost of inventory by…

A

Number of units of inventory

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14
Q

4 steps in gross profit method

A

1 compute COGAS
2 compute estimated COGS = sales - (sales x GP%)
3 compute ending inventory = COGAS - estimated COGS
4 notice difference

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15
Q

How is the buyer’s accounts payable affected if, goods are lost in transit, when they were shipped FOB shipping point?

A

The cost of those goods should be added to accounts payable

16
Q

How is accounts payable in year 2, treated if goods are shipped to the buyer FOB destination and arrive in year 3.

A

Accounts payable is unaffected

17
Q

How is accounts payable affected by returned goods supplied by vendor?

A

Decreases when credited by vendor

18
Q

A consignee’s payment of reimbursable freight costs results in…

A

Accounts receivable for the consignor

19
Q

Which accounts are cumulative/are not cumulative:

Construction expenses

Construction in progress

A

Construction expenses are not cumulative

Construction in progress is cumulative

20
Q

The equation used to recognize income on the cost to cost basis

A

Revenue (Profit) =
((Cost to date/total expected cost) x expected profit)
- profit recognized in previous periods

21
Q

In the construction industry contract related assets and liabilities are usually classified as…

A

Current

22
Q

On the balance sheet, construction in progress (CIP) account is netted with…

A

The contra account: progress billings

23
Q

If construction in progress exceeds progress billings, the excess is reported as…

A

A current asset

24
Q

On the balance sheet construction in progress and billings only include…

A

Numbers from profitable contracts

25
Q

Calculation for construction in progress

A

Construction in progress = costs incurred to date + profits recognized

26
Q

Calculation for: costs and estimated earnings in excess of billings
(Just for profitable projects)

A

Costs and estimated earnings in excess of billings =

Construction in progress - billings

27
Q

Billings in excess of costs and estimated earnings is reported for…

A

Unprofitable LT construction projects

28
Q

Calculation for: billings in excess of costs and estimated earnings

A

billings in excess of costs and estimated earnings =

Billings - costs incurred to date

Yaeger FAR (59 decks)

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