ACCT 3311 – Accounting Exam ( Questions With
Answers ) 100% Verified Answers By
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When should a transfer of receivables be recorded as a sale?
a. The transferred assets are isolated from the transferor
b. The transferor does not maintain effective control over the transferred assets through an
agreement to repurchase or redeem them prior to their maturity
c. The transferee has the right to pledge or exchange the transferred assets
d. All of these answers are correct - ANSWER d. All of these answers are correct
When using a perpetual inventory system
a. no Purchases account is used
b. a Cost of Goods Sold account is used
c. two entries are required to record a sale
d. All of these answer choices are correct - ANSWER d. All of these answer choices are correct
Bell Inc. took a physical inventory at the end of the year and determined that $830,000 of goods
were on hand. In addition, Bell, Inc. determined that $60,000 of goods that were in transit that
were shipped f.o.b. shipping point were actually received two days after the inventory count
and that the company had $90,000 of goods out on consignment. What amount should Bell
report as inventory at the end of the year?
a. $830,000
b. $890,000
c. $920,000
d. $980,000 - ANSWER d. $980,000
,In a period of rising prices which inventory method generally provides the greatest amount of
net income?
a. Average Cost
b. FIFO
c. LIFO
d. Specific Identification - ANSWER b. FIFO
Why are inventories stated at lower-of-cost-or-net realizable value?
a. To report a loss when there is a decrease in the future utility
b. To keep track of the market value of the inventory
c. To report a loss when there is a decrease in the future utility below the original cost
d. To permit future profits to be recognized - ANSWER c. To report a loss when there is a
decrease in the future utility below the original cost
Which statement is not true about the gross profit method of inventory valuation?
a. It may be used to estimate inventories for interim statements
b. It may be used to estimate inventories for annual statements
c. It may be used by auditors.
d. None of the above - ANSWER b. It may be used to estimate inventories for annual statements
_________ represents the most liquid of assets. - ANSWER Cash
___________ is an indication of an enterprise's ability to meet its obligations as they come due.
- ANSWER Liquidity
What does cash include? - ANSWER -coin
-currency
, -bank deposits including checking and savings accounts
-negotiable instruments such as money orders
-cashiers' checks
-personal checks
-bank drafts
Postdated checks and I.O.U.s should be reported as ___________. - ANSWER receivables
Travel advances to employees should be reported as _____________ or as ___________
___________. - ANSWER receivables, prepaid expenses
Postage stamps on hand should be reported as _________ _________ ________ or as a
__________ _________. - ANSWER office supplies inventory, prepaid expense
Petty cash funds and change funds should be included in _________. - ANSWER cash
What category includes short-term, highly liquid investments that are both (1) readily
convertible to known amounts of cash, and (2) so near their maturity that they present
insignificant risk of changes in value because of changes in interest rates (generally 3 months or
less)? - ANSWER Cash equivalents
Treasury bills, commercial paper, money market funds, money market savings certificates,
certificates of deposit, and similar types of deposits are examples of what? - ANSWER Cash
equivalents
However, if these securities (the cash equivalents above) contain restrictions or penalties on
their conversion to cash, they should be reported as ___________ ____________. - ANSWER
temporary investments
Answers ) 100% Verified Answers By
Experts|Graded A+
When should a transfer of receivables be recorded as a sale?
a. The transferred assets are isolated from the transferor
b. The transferor does not maintain effective control over the transferred assets through an
agreement to repurchase or redeem them prior to their maturity
c. The transferee has the right to pledge or exchange the transferred assets
d. All of these answers are correct - ANSWER d. All of these answers are correct
When using a perpetual inventory system
a. no Purchases account is used
b. a Cost of Goods Sold account is used
c. two entries are required to record a sale
d. All of these answer choices are correct - ANSWER d. All of these answer choices are correct
Bell Inc. took a physical inventory at the end of the year and determined that $830,000 of goods
were on hand. In addition, Bell, Inc. determined that $60,000 of goods that were in transit that
were shipped f.o.b. shipping point were actually received two days after the inventory count
and that the company had $90,000 of goods out on consignment. What amount should Bell
report as inventory at the end of the year?
a. $830,000
b. $890,000
c. $920,000
d. $980,000 - ANSWER d. $980,000
,In a period of rising prices which inventory method generally provides the greatest amount of
net income?
a. Average Cost
b. FIFO
c. LIFO
d. Specific Identification - ANSWER b. FIFO
Why are inventories stated at lower-of-cost-or-net realizable value?
a. To report a loss when there is a decrease in the future utility
b. To keep track of the market value of the inventory
c. To report a loss when there is a decrease in the future utility below the original cost
d. To permit future profits to be recognized - ANSWER c. To report a loss when there is a
decrease in the future utility below the original cost
Which statement is not true about the gross profit method of inventory valuation?
a. It may be used to estimate inventories for interim statements
b. It may be used to estimate inventories for annual statements
c. It may be used by auditors.
d. None of the above - ANSWER b. It may be used to estimate inventories for annual statements
_________ represents the most liquid of assets. - ANSWER Cash
___________ is an indication of an enterprise's ability to meet its obligations as they come due.
- ANSWER Liquidity
What does cash include? - ANSWER -coin
-currency
, -bank deposits including checking and savings accounts
-negotiable instruments such as money orders
-cashiers' checks
-personal checks
-bank drafts
Postdated checks and I.O.U.s should be reported as ___________. - ANSWER receivables
Travel advances to employees should be reported as _____________ or as ___________
___________. - ANSWER receivables, prepaid expenses
Postage stamps on hand should be reported as _________ _________ ________ or as a
__________ _________. - ANSWER office supplies inventory, prepaid expense
Petty cash funds and change funds should be included in _________. - ANSWER cash
What category includes short-term, highly liquid investments that are both (1) readily
convertible to known amounts of cash, and (2) so near their maturity that they present
insignificant risk of changes in value because of changes in interest rates (generally 3 months or
less)? - ANSWER Cash equivalents
Treasury bills, commercial paper, money market funds, money market savings certificates,
certificates of deposit, and similar types of deposits are examples of what? - ANSWER Cash
equivalents
However, if these securities (the cash equivalents above) contain restrictions or penalties on
their conversion to cash, they should be reported as ___________ ____________. - ANSWER
temporary investments
