CSUF ACCT 201A EXAMINATION TEST 2026
FULL SOLUTION QUESTIONS AND
ANSWERS GRADED A+
●● A company returned goods for credit to the supplier. Which one of
the following is a portion of the journal entry required if a perpetual
inventory system is used?.
Answer: Credit Inventory
●● A company sells item on account with credit terms of 2/10, n/20.
What is the meaning of these terms?.
Answer: A 2 percent cash discount may be taken if payment is made
within 10 days of the invoice date; otherwise the full amount is due
within 20 days.
●● A company uses LIFO to cost its inventory. Which statement is true?.
Answer: The company will pay less income taxes in periods of rising
prices compared to using FIFO.
●● A debit balance in the Allowance for Doubtful Accounts.
Answer: indicates that actual bad debt write-offs have exceeded previous
provisions for bad debts.
, ●● The trial balance of Priority Paints at December 31, 2014, includes
the following:
Accounts Receivable (Debit: $94,000)
Allowance for Doubtful Accounts (Debit: $500)
Sales (all on credit) (Credit: $550,000)
If Priority Paints estimates uncollectibles at 2.2% of accounts receivable
and the allowance account has a $500 credit balance. The adjusting
journal entry would include:.
Answer: A credit to the Allowance for Doubtful Accounts of $1,568.
●● Advantage Company's ending inventory is overstated by $2,000.
What is the effect of this error on the current year's cost of goods sold
and net income, respectively?.
Answer: Understated and overstated
●● A high accounts receivable turnover ratio indicates.
Answer: customers are making payments very quickly
●● The trial balance of Priority Paints at December 31, 2014, includes
the following:
Accounts Receivable (Debit: $94,000)
Allowance for Doubtful Accounts (Debit: $500)
Sales (all on credit) (Credit: $550,000)
FULL SOLUTION QUESTIONS AND
ANSWERS GRADED A+
●● A company returned goods for credit to the supplier. Which one of
the following is a portion of the journal entry required if a perpetual
inventory system is used?.
Answer: Credit Inventory
●● A company sells item on account with credit terms of 2/10, n/20.
What is the meaning of these terms?.
Answer: A 2 percent cash discount may be taken if payment is made
within 10 days of the invoice date; otherwise the full amount is due
within 20 days.
●● A company uses LIFO to cost its inventory. Which statement is true?.
Answer: The company will pay less income taxes in periods of rising
prices compared to using FIFO.
●● A debit balance in the Allowance for Doubtful Accounts.
Answer: indicates that actual bad debt write-offs have exceeded previous
provisions for bad debts.
, ●● The trial balance of Priority Paints at December 31, 2014, includes
the following:
Accounts Receivable (Debit: $94,000)
Allowance for Doubtful Accounts (Debit: $500)
Sales (all on credit) (Credit: $550,000)
If Priority Paints estimates uncollectibles at 2.2% of accounts receivable
and the allowance account has a $500 credit balance. The adjusting
journal entry would include:.
Answer: A credit to the Allowance for Doubtful Accounts of $1,568.
●● Advantage Company's ending inventory is overstated by $2,000.
What is the effect of this error on the current year's cost of goods sold
and net income, respectively?.
Answer: Understated and overstated
●● A high accounts receivable turnover ratio indicates.
Answer: customers are making payments very quickly
●● The trial balance of Priority Paints at December 31, 2014, includes
the following:
Accounts Receivable (Debit: $94,000)
Allowance for Doubtful Accounts (Debit: $500)
Sales (all on credit) (Credit: $550,000)
