Questions from General Accounting

Q: “When perpetual inventory records are kept, the results under the

“When perpetual inventory records are kept, the results under the FIFO and LIFO methods are the same as they would be in a periodic inventory system.” Do you agree? Explain.

Q: As the company accountant, explain the following ideas to the management

As the company accountant, explain the following ideas to the management of Jurgens Company. (a) The concept of reasonable assurance in internal control. (b) The importance of the human factor in inte...

Q: Moritz Corporation reported net income of $346,000, cash

Moritz Corporation reported net income of $346,000, cash of $67,800, and net cash provided by operating activities of $221,200. What does this suggest about the quality of the company’s earnings? What...

Q: Debbie Trevino, the vice president of sales for Tropical Pools and

Debbie Trevino, the vice president of sales for Tropical Pools and Spas, wants the company’s credit department to be less restrictive in granting credit. “How can we sell anything when you guys won’t...

Q: Carrera Company dishonors a note at maturity. What are the options

Carrera Company dishonors a note at maturity. What are the options available to the lender?

Q: General Motors Company has accounts receivable and notes receivable. How should

General Motors Company has accounts receivable and notes receivable. How should the receivables be reported on the balance sheet?

Q: The president of Dickerson Inc. proudly announces her company’s improved liquidity

The president of Dickerson Inc. proudly announces her company’s improved liquidity since its current ratio has increased substantially from one year to the next. Does an increase in the current ratio...

Q: Since hiring a new sales director, Hilson Inc. has enjoyed

Since hiring a new sales director, Hilson Inc. has enjoyed a 50% increase in sales. The CEO has also noticed, however, that the company’s average collection period has increased from 17 days to 38 day...

Q: Carington Company acquires the land and building owned by Ankiel Company.

Carington Company acquires the land and building owned by Ankiel Company. What types of costs may be incurred to make the asset ready for its intended use if Carington Company wants to use only the la...

Q: Lakeland Corporation owns a machine that is fully depreciated but is still

Lakeland Corporation owns a machine that is fully depreciated but is still being used. How should Lakeland account for this asset and report it in the financial statements?