Question: Purchase returns and purchase discounts are added to purchases to calculate net purchases.
Answer Choices:
Answer:\nFalse
Question: Able sells a piece of equipment to Smythe for $1,800 on August 1. The equipment cost $1,000. The equipment is picked up by Smythe on August 10. How many performance obligations are included in this transaction?
Answer Choices:
Answer:\n1
Question: A tsunami destroyed Toshiaki Company’s warehouse and all of its inventory. … Use the gross profit method to determine the following: a. Historical gross profit percentage b. Estimated cost of goods sold c. Estimated gross profit d. Estimated ending inventory
Answer Choices:
Answer:\na. 58.0% b. $12,978 c. $17,922 d. $11,714
Question: A company uses FIFO. The inventory is reported at the lower of cost or the net realizable value.
Answer Choices:
Answer:\nTrue
Question: On May 1, 2022, Fitz installed a $486,000 sound system for International Arena. Fitz agreed to accept a $481,000 six-month, noninterest-bearing note due on November 1, 2022. Fitz prepares financial statements at the end of every calendar year. Fitz’s journal entry to record the collection of the note plus accrued interest on November 1, 2022, will include a
Answer Choices:\n\nA. credit to Interest Revenue for $481,000 B. credit to Note Receivable for $486,000 C. credit to Note Receivable for $481,000 D. debit to Interest Revenue for $5,000
Answer:\nC
Question: Derby Company sells season passes to its entertainment center. The passes sell for $125 each and are good for one year. On January 1, Derby sells 4,800 passes and received cash. What journal entry should Derby Company make on January 31st assuming adjusting entries are made monthly?
Answer Choices:\n\nA. Debit Cash; Credit Deferred Revenue B. Debit Deferred Revenue; Credit Ticket Revenue C. Debit Deferred Revenue; Credit Cash D. Debit Ticket Revenue; Credit Deferred Revenue
Answer:\nB
Question: Fraxon Inc. made a $70,000 sale on account with terms of 1/15, n/30. If the company uses the gross method, which of the following will be included in the journal entry to record customer payment within the discount period?
Answer Choices:\n\nA. credit Cash $69,300 B. credit Accounts Receivable $70,000 C. credit Sales Revenue $70,000 D. credit Sales Discount $700
Answer:\nB
Question: In which of the following situations are a company’s receivables sold to another entity?
Answer Choices:\n\nA. factoring B. pledging C. recoursing D. assigning
Answer:\nA
Question: A perpetual inventory system always provides current information about inventory levels.
Answer Choices:
Answer:\nTrue
Question: IFRS does not allow the LIFO inventory method because
Answer Choices:\n\nA. the FIFO method more accurately reflects the cost of inventory B. the majority of companies do not actually sell the oldest items first C. of the increased taxes owed under the LIFO method D. it is viewed as unrealistic and lacks representational faithfulness of inventory flows
Answer:\nD
Question: Disclosures concerning significant judgments in revenue recognition include all of the following except
Answer Choices:\n\nA. an assessment of whether an estimate of variable consideration is constrained B. allocation of the transaction price C. information regarding fair value of consideration exchanged D. methods used to recognize revenue
Answer:\nC
Question: The holder of a non-interest-bearing note does not recognize any interest revenue over the term of the note.
Answer Choices:
Answer:\nFalse
Question: Factored receivables have been sold to another company.
Answer Choices:
Answer:\nTrue
Question: The following information is available for the past month for a retail store … What is the ending inventory at cost using the conventional retail method?
Answer Choices:\n\nA. $164,354 B. $70,354 C. $74,000 D. $29,450
Answer:\nD
Question: The expected-value approach for revenue recognition is appropriate when variable consideration is included in the contract.
Answer Choices:
Answer:\nTrue