ACCOUNTING 200 EXAM 2 REVIEW UPDATED
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Which asset is most liquid (in accounting sense)
Answer:
Cash
Question:
2. The account, Sales returns and allowances, represents...
Answer:
returned mechandise
Question:
3. ABC offers 2/10 net 20. Which means...
Answer:
The customer can take a 2 % discount if they pay in 10 days
Question:
4. When goods or services are sold from one business to
another on credit or sales are recorded at the gross
amount, a sales discount....
Answer:
1) Is offered so that the customer will pay the bill promptly
2) Is recorded as a contra-asset in sales
Question:
5. The direct write off method for uncollectible account...
Answer:
is acceptable, but inconsistant with the matching concept
Question:
6. If a firm uses the periodic inventory system, an adjusting
inventory is required to...
Answer:
1) adjust the ending inventory balance in the inventory account
2) close purchases to the inventory account
3) Close inventory to Cost of Goods Sold
, Question:
7. On the balance sheet, the allowance for uncollectible
accounts is subtracted from account receivable to reflect
the...
Answer:
net accounts receivable
Question:
8. During periods of rising prices, which inventory valuation
best matches current inventory costs with current
revenues? Assume the number of ending inventory units
is at least as large as the number of beginning inventory
units.
Answer:
LIFO
Question:
9. Deposits in transit are
Answer:
deposits recorded in the firms cash ledger but not yet recorded by the bank
Question:
10. The balance in a firms checking account is decreased by
Answer:
1) NSF checks
2) A transaction reported on a debit memo (by the bank)
3) Bank service charge
Question:
11. Finding accumulated depreciation using the double
declining balance method
Answer:
1) Find [ Original Cost X (life/expected life) ]
2) Subtract this number from original cost and multiply by (life/expected life).
3) Add both numbers from step 1 and 2 to find accumulated depreciation
Question:
12. Finding accumulated depreciation using the usage
method
Answer:
[Cost - Estimated Residual Value] / [ Estimated units of usage ] = ???
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Which asset is most liquid (in accounting sense)
Answer:
Cash
Question:
2. The account, Sales returns and allowances, represents...
Answer:
returned mechandise
Question:
3. ABC offers 2/10 net 20. Which means...
Answer:
The customer can take a 2 % discount if they pay in 10 days
Question:
4. When goods or services are sold from one business to
another on credit or sales are recorded at the gross
amount, a sales discount....
Answer:
1) Is offered so that the customer will pay the bill promptly
2) Is recorded as a contra-asset in sales
Question:
5. The direct write off method for uncollectible account...
Answer:
is acceptable, but inconsistant with the matching concept
Question:
6. If a firm uses the periodic inventory system, an adjusting
inventory is required to...
Answer:
1) adjust the ending inventory balance in the inventory account
2) close purchases to the inventory account
3) Close inventory to Cost of Goods Sold
, Question:
7. On the balance sheet, the allowance for uncollectible
accounts is subtracted from account receivable to reflect
the...
Answer:
net accounts receivable
Question:
8. During periods of rising prices, which inventory valuation
best matches current inventory costs with current
revenues? Assume the number of ending inventory units
is at least as large as the number of beginning inventory
units.
Answer:
LIFO
Question:
9. Deposits in transit are
Answer:
deposits recorded in the firms cash ledger but not yet recorded by the bank
Question:
10. The balance in a firms checking account is decreased by
Answer:
1) NSF checks
2) A transaction reported on a debit memo (by the bank)
3) Bank service charge
Question:
11. Finding accumulated depreciation using the double
declining balance method
Answer:
1) Find [ Original Cost X (life/expected life) ]
2) Subtract this number from original cost and multiply by (life/expected life).
3) Add both numbers from step 1 and 2 to find accumulated depreciation
Question:
12. Finding accumulated depreciation using the usage
method
Answer:
[Cost - Estimated Residual Value] / [ Estimated units of usage ] = ???
