Questions from Financial Accounting

Q: When purchase prices are rising, which of the following statements is

When purchase prices are rising, which of the following statements is true? a. LIFO produces a higher cost of goods sold than FIFO. b. LIFO produces a higher cost for ending inventory than FIFO. c. FI...

Q: Hannah purchased a laptop computer from Perry Corp. for $1

Hannah purchased a laptop computer from Perry Corp. for $1,500. Hannah’s receivable has been outstanding for over 180 days, and Perry determines that the total amount is uncollectible and writes off a...

Q: Which method results in a more realistic amount for income because it

Which method results in a more realistic amount for income because it matches the most current costs against revenue? a. FIFO b. Average cost c. Specific identification d. LIFO

Q: Which of the following statements regarding the lower of cost or market

Which of the following statements regarding the lower of cost or market (LCM) rule is true? a. The LCM rule is an application of the historical cost principle. b. When the net realizable value of inve...

Q: Which of the following statements is true with regard to the gross

Which of the following statements is true with regard to the gross profit ratio? 1. An increase in cost of goods sold would increase the gross profit rate (assuming sales remain constant). 2. An incre...

Q: An increasing inventory turnover ratio indicates that a company: a

An increasing inventory turnover ratio indicates that a company: a. Has reduced the time it takes to purchase and sell inventory. b. Is having trouble selling its inventory. c. May be holding too much...

Q: Ignoring taxes, if a company understates its ending inventory by $

Ignoring taxes, if a company understates its ending inventory by $10,000 in the current year: a. Assets for the current year will be overstated by $10,000. b. Net income for the subsequent year will b...

Q: At the end of each day, Spangle counts the cash in

At the end of each day, Spangle counts the cash in its cash registers. Spangle then compares the physical amount of cash to the amount of cash that the register tape indicates should be in the cash dr...

Q: Which of the following statements is true for a company that uses

Which of the following statements is true for a company that uses a periodic inventory system? a. The purchase of inventory requires a debit to Inventory. b. The return of defective inventory requires...

Q: Refer to the information for Morgan Inc. below. If Morgan

Refer to the information for Morgan Inc. below. If Morgan uses a periodic inventory system, what is the cost of goods sold under FIFO at April 30? a. $32,800 b. $38,400 c. $63,600 d. $69,200