28. When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when
Answer
| a. |
a sale is made. |
|
| b. |
management estimates the amount of uncollectibles. |
|
| c. |
an account becomes bad and is written off. |
|
| d. |
a customer’s account becomes past due. |
29. Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:
| Sep. 1 | Inventory | 20 units at $20 |
| 4 | Sold | 10 units |
| 10 | Purchased | 30 units at $25 |
| 17 | Sold | 20 units |
| 30 | Purchased | 10 units at $30 |
If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is
Answer
| a. |
$650 |
|
| b. |
$750 |
|
| c. |
$700 |
|
| d. |
$800 |
30.
Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:
| Sep. 1 | Inventory | 20 units at $20 |
| 4 | Sold | 10 units |
| 10 | Purchased | 30 units at $25 |
| 17 | Sold | 20 units |
| 30 | Purchased | 10 units at $30 |
If Addison uses LIFO, the cost of the ending merchandise inventory on September 30 is
Answer
| a. |
$750 |
|
| b. |
$700 |
|
| c. |
$800 |
|
| d. |
$650 |
31. Using the allowance method of accounting for uncollectible receivables, the entry to reinstate a specific receivable previously written
off would include a
Answer
| a. |
debit to Allowance for Doubtful Accounts |
|
| b. |
debit to Accounts Receivable |
|
| c. |
credit to Accounts Receivable |
|
| d. |
credit to Bad Debt Expense |
32. Journal entries based on the bank reconciliation are required in the company’s accounts for
Answer
| a. |
bank errors |
|
| b. |
outstanding checks |
|
| c. |
deposits in transit |
|
| d. |
book errors |
33.
The Corbit Corp. sold merchandise for cash, $7,200. The cost of the merchandise sold was $3,950. The journal entry(s) to record this transaction would be
Answer
| a. |
Cash 7,200 Cost of Merchandise Sold 3,950 |
|
| b. |
Cash 7,200 Cost of Merchandise Sold 3,950 |
|
| c. |
Cash 7,200 Cost of Merchandise Sold 7,200 |
|
| d. |
Cash 3,950 Cost of Merchandise Sold 3,950 |
34. The entry to record the return of merchandise from a customer would include a
Answer
| a. |
credit to Sales |
|
| b. |
debit to Sales |
|
| c. |
debit to Sales Returns and Allowances |
|
| d. |
credit to Sales returns and Allowances |
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