Generally accepted accounting principles require that the inventory of a company be reported at:
Select one:
a. Market value.
b. Historical cost.
c. Lower of cost or market.
d. Replacement cost.
e. Retail value.
A loss on disposal of a plant asset can only occur if the cash proceeds received from the asset sale is less than the asset’s book value.
Select one:
True
False
Incidental costs often added to the costs of inventory include import duties, freight, storage, and insurance.
Select one:
True
False
A company has net sales of $900,000 and average accounts receivable of $300,000. What is its accounts receivable turnover for the period?
Select one:
a. 0.20.
b. 5.00
c. 20.0
d. 73.0
e. 3.0
A promissory note is a written promise to pay a specified amount of money either on demand or at a definite future date.
Select one:
True
False
The book value of an asset when using double-declining-balance depreciation is always greater than the book value from using straight-line depreciation, except at the beginning and the end of the asset’s useful life, when it is the same.
Select one:
True
False
The understatement of the beginning inventory balance causes:
Select one:
a. Cost of goods sold to be understated and net income to be understated.
b. Cost of goods sold to be understated and net income to be overstated.
c. Cost of goods sold to be overstated and net income to be overstated.
d. Cost of goods sold to be overstated and net income to be understated.
e. Cost of goods sold to be overstated and net income to be correct.
Natural resources:
Select one:
a. Include standing timber, mineral deposits, and oil and gas fields.
b. Are also called wasting assets.
c. Are long-term assets.
d. Are depleted.
e. All of these.
Salvage value is:
Select one:
a. Also called residual value.
b. Also called scrap value.
c. An estimate of the asset’s value at the end of its benefit period.
d. A factor relevant to determining depreciation.
e. All of these.
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