Exam #2 - Quiz Challenge 2 - Ch 3, 6 & 7

Question 1

Deferred revenue and unearned revenue both refer to cash that has been received but not yet earned.

Accepted Answer

True

Question 2

For which inventory cost flow method is the cost flow assumed to be in the reverse order in which expenditures were made

Accepted Answer

Last in, first out

Question 3

On which financial statement would you look to find the total costs of merchandise that remains

Accepted Answer

Balance Sheet

Question 4

What is a 'flow' as it relates to financial statements?

Accepted Answer

A change in a level over a period of time

Question 5

In the accounting cycle, preparing financial statements comes before which of the following steps?

Accepted Answer

Preparing a post-closing trial balance

Question 6

When adjusting for depreciation, which of the following is one effect of the adjustment?

Accepted Answer

The asset's book value declines

Question 7

A company that uses LIFO must sell its oldest goods first.

Accepted Answer

False

Question 8

Channel stuffing arises when a company records a nonrecurring loss in a period of already depressed income.

Accepted Answer

False

Question 9

Underestimating the allowance for uncollectible accounts can shift income from future periods into the present period.

Accepted Answer

True

Question 10

Adjusting entries always impact the income statement and the cash account.

Accepted Answer

False

Question 11

If Cost of Goods sold is 5,940,000 and ending balance is 4,690,000 what is the amount for purchases in the table below

Accepted Answer

9,310,000

Question 12

Income effects of discontinued operations are reported separately from continuing operations on the income statement.

Accepted Answer

True

Question 13

If the collection period lengthens compared to historic figures and industry averages, what might the reason be?

Accepted Answer

Deterioration of collectability of receivables

Question 14

The book value of a building is equivalent to its historical cost.

Accepted Answer

False

Question 15

Which of the following items can be considered as a persistent income statement item for analysis purposes?

Accepted Answer

Bad debt expense

Question 16

Which of the following entries will record the payment of salaries payable originally incurred for Salaries Expense?

Accepted Answer

Debit Salaries Payable; credit Cash

Question 17

The chart of accounts is also known as the book of original entry.

Accepted Answer

False

Question 18

Which of the following is the correct order of the steps in the accounting cycle?

Accepted Answer

Analyze, record, adjust, report, and close

Question 19

Which of the following is not considered an issue relating to proper revenue recognition?

Accepted Answer

Asset write-downs

Question 20

What is Cost of Goods Sold based on the table below?

Accepted Answer

6,980,000

Questions 20