Complete the following table to show how FOB terms apply to merchandise inventory purchased by a merchandiser. FOB Term When does the title to the goods transfer to the buyer? Who pays the freight? Shipping Point Destination What will be an ideal response ANSWER FOB Term When does the title to the goods transfer to […]
Date: September 2nd, 2020
Ending inventory is calculated by multiplying the number of units on hand by the unit cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 2nd, 2020
A company discovers that its cost of goods sold is understated by an insignificant amount. It does not need to correct the error because of the conservatism principle. Indicate whether the statement is true or false ANSWER FALSE
Date: September 2nd, 2020
The trial balance is one of the three basic financial statements that are issued to external users of the business. Indicate whether the statement is true or false ANSWER FALSE
Date: September 2nd, 2020
Data from a trial balance is used to prepare the income statement, statement of retained earnings, and the balance sheet. Indicate whether the statement is true or false ANSWER TRUE
Date: September 2nd, 2020
What type of account is Prepaid Rent, and what is its normal balance? A) It is an expense account and has a debit balance. B) It is a liability account and has a credit balance. C) It is a revenue account and has a credit balance. D) It is an asset account and has a […]
Date: September 2nd, 2020
Reducing expenses to increase operating profit is representative of ________. A) safeguarding assets B) following company policies C) promoting operational efficiency D) ensuring accurate, reliable accounting records ANSWER C
Date: September 2nd, 2020
What is the term used for the difference between the Equipment account and the Accumulated Depreciation account? A) contra asset B) market value C) historical cost D) book value ANSWER D
Date: September 2nd, 2020
Which of the following inventory costing methods is based on the actual cost of each particular unit of inventory? A) specific identification B) weighted-average C) last-in, first-out D) first-in, first-out ANSWER A
Date: September 2nd, 2020
Which of the following is true of internal control? A) A company’s outside auditor is responsible for the company’s internal control system. B) One of the major purposes of internal control is to ensure that the assets are safeguarded. C) Internal control procedures tend to diminish the importance of operational efficiency. D) Internal controls are […]
Date: September 2nd, 2020
