A change in an accounting estimate is:
Select one:
a. Reflected in past financial statements.
b. Reflected in future financial statements and also requires modification of past statements.
c. A change in a calculated amount that is included in current and future years’ financial statements as a result of new information or subsequent developments and from better insight or improved judgment.
d. Not allowed under current accounting rules.
Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method.
The cost of the ending inventory is
Select one:
a. $200.
b. $220.
c. $380.
d. $275.
e. $300.
e. Considered an error in the financial statements.
Companies can report credit card expense as a discount deducted from sales or as a selling expense.
Select one:
True
False
MixRecording Studios purchased $7,800 in electronic components from TechCom. MixRecording Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note?
Select one:
a. $130
b. $7,800
c. $7,930
d. $8,050
e. $8,130
The amount of bad debt expense can be estimated by:
Select one:
a. The percent of sales method.
b. The percent of accounts receivable method.
c. The aging of accounts receivable method.
d. All of these.
e. Only B and C.
The matching principle requires that the inventory valuation method follow the physical flow of inventory.
Select one:
True
False
The inventory valuation method that tends to smooth out erratic changes in costs is:
Select one:
a. FIFO.
b. Weighted average.
c. LIFO.
d. Specific identification.
e. WIFO
When using the allowance method of accounting for uncollectible accounts, the entry to record the bad debts expense is a debit to Bad Debts Expense and a credit to Accounts Receivable.
Select one:
True
False
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