Acc 557 Midterm Exam Part 2, Essay

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Question 1 Net income is gross profit less • financing expenses. • operating expenses. • other expenses and losses. • other expenses. Question 2 On November 2, 2014, Kasdan Company has cash sales of $6,000 from merchandise having a cost of $3,600. The entries to record the day's cash sales will include: • a $3,600 credit to Cost of Goods Sold. • a $6,000 credit to Cash. • a $3,600 credit to Inventory. • d a $6,000 debit to Accounts Receivable. Question 3 Glenn Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Glenn Company pays within the discount period? • $8,100 • $8,280 • $8,820 • $9,000 Question 4 When a seller grants…show more content…
• All of these answers are correct. Question 9 If a company fails to record estimated bad debts expense, • cash realizable value is understated. • expenses are understated. • revenues are understated. • receivables are understated. Question 10 Bad Debt Expense is considered • an avoidable cost in doing business on a credit basis. • an internal control weakness. • a necessary risk of doing business on a credit basis. • avoidable unless there is a recession. Want to download the Complete Assignments of ACC 557….?? Click ACC 557 Complete Assignment Question 11 The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles • will increase income in the period it is collected. • will decrease income in the period it is collected. • requires a correcting entry for the period in which the account was written off. • does not affect income in the period it is collected. Question 12 The maturity value of a $50,000, 9%, 60-day note receivable dated July 3 is • $50,000. • $50,750. • $54,500. • $59,000. Question 13 The control principle related to not having the same person authorize and pay for goods is known as • establishment of responsibility. • independent internal verification. • segregation of duties. • rotation of duties. Question 14 If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in

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