financial x
Financial & Managerial Accting MBA-560
1. During the month of March, Wang Company sold merchandise on account for $9,100. The merchandise had cost Wang $4,900. Which of the following represents the effects of this transaction on Wang’s financial statements? Row One |
2. What is the relationship between gross margin and net income? (Points : 2) Gross Margin – Merchandise Inventory at the end of the period = Net Income |
3. Which of the following is not a period cost? (Points : 2) Advertising Expense |
4. Cost of Goods Sold is reported as a(n): (Points : 2) asset on the balance sheet. |
5. Whitney Company’s Cost of Goods Available for Sale for 2010 was $610,000. Which of the following statements is true? (Points : 2) If the merchandise inventory at the end of the year was $100,000, the Cost of Goods Sold was $510,000. |
6. Merchandising businesses: (Points : 2) manufacture the goods they sell. |
7. Gruver Company maintains perpetual inventory records. The company’s inventory account had a $5,500 balance as of December 31, 2010. On that date, a physical count of inventory showed only $5,300 of merchandise in stock. The write-down to recognize the missing inventory will: (Points : 2) decrease assets. |
8. Lemon Company sent goods to a customer FOB delivery. What effect will these freight costs have on Lemon company’s financial statements? Row One |
9. Gross margin is equal to: (Points : 2) Sales Revenue divided by the balance in Merchandise Inventory at the end of the period. |
10. Which of the following statements accurately describes a fidelity bond? (Points : 2) Insurance that the company buys to protect itself from loss due to employee dishonesty |
11. Which of the following is not a reason why a business needs strong internal controls over cash? (Points : 2) A small volume of high-denomination currency represents a significant amount of value. |
12. What documentation issued by a bank increases a company’s checking account balance at the bank? (Points : 2) An account invoice |
13. What documentation issued by a bank increases a company’s checking account balance at the bank? (Points : 2) An account invoice |
14. In preparing a bank reconciliation, typical adjustments to the bank balance include: (Points : 2) NSF checks. |
15. Wren Company accepted a check from Jay Company as payment for services rendered. Wren’s bank statement revealed that the Jay check was an NSF check. Wren has not decided to write off the account. Exclusive of any bank charges what will the entry to record the NSF check have on the accounting equation of Wren Company? Row Total Assets Total Equity One No effect No effect Two Decrease Decrease Three Decrease No effect Four No effect Decrease (Points : 2) Row One |
16. Which of the following is not one of the purposes of an internal control system? (Points : 2) Safeguarding the company’s assets |
17. Unger Company uses the perpetual inventory method. Unger sold goods that cost $3,500 for $7,200. If the sale was made to a customer on account, the sale will: (Points : 2) increase total assets by $3,700. |
18. The most effective way to reduce opportunities for ethical or criminal misconduct is: (Points : 2) to obtain fidelity bonds for all employees. |
19. The following are strong control measures over cash receipts a record of all cash collections should be prepared immediately upon receipt. |
20. An entry to record the purchase of inventory on account under the perpetual inventory method: (Points : 2) increases total assets. |