ACCT211 2014 Spring D QUIZ 2 HOMEWORK 2
When buy prices of stock often decline, which methodology of stock costing will yield the bottom value of products offered? FIFO. LIFO. Weighted common. Particular identification. Gross margin. Some corporations select to keep away from assigning incidental prices of buying merchandise to stock by recording them as bills when incurred. The argument that helps that is referred to as: The matching precept. The materiality constraint. The associated fee precept. The conservation constraint precept. The decrease of value or market precept. An error within the period-end stock causes an offsetting error within the subsequent interval and due to this fact: Managers can ignore the error. It's generally mentioned to be self-correcting. It impacts solely earnings assertion accounts. If impacts solely steadiness sheet accounts. Is immaterial for managerial resolution making. Administration choices in accounting for stock value embody the entire following besides: Costing methodology. Stock system (perpetual or periodic). Buyer demand for stock. Use of market values or different estimates. Objects included in stock and their prices. Usually accepted accounting rules require that the stock of an organization be reported at: Market worth. Historic value. Decrease of value or market. Alternative value. Retail worth. In making use of the decrease of value or market methodology to stock valuation, market is outlined as: Historic value. Present alternative value. Present gross sales worth. FIFO. LIFO. The stock valuation methodology that has the benefits of assigning an quantity to stock on the steadiness sheet that approximates its present value, and likewise mimics the precise move of products for many companies is: FIFO. Weighted common. LIFO. Particular identification. All the stock valuation strategies accomplish this. Inner controls that needs to be utilized when a enterprise takes a bodily depend of stock ought to embody the entire following besides: Prenumbered stock tickets. A supervisor doesn't verify that every one inventories are ticketed as soon as, and solely as soon as. Counters should verify the validity of stock existence, quantities, and high quality. Second counts by a unique counter. Counters of stock shouldn't be those that are accountable for the stock. Broken and out of date items that may be offered: Are by no means counted as stock. Are included in stock at their full value. Are included in stock at their web realizable worth. Must be disposed of instantly. Are assigned a price of zero. Prices included within the Merchandise Stock account can embody the entire following besides: Bill worth minus any low cost. Transportation-in. Storage. Insurance coverage. Broken stock that can not be offered. The working cycle for a merchandiser that sells just for money strikes from: Purchases of merchandise to stock to money gross sales. Purchases of merchandise to stock to accounts receivable to money gross sales. Stock to purchases of merchandise to money gross sales. Accounts receivable to purchases of merchandise to stock to money gross sales. Accounts receivable to stock to money gross sales. The gross margin ratio: Can also be referred to as the web revenue ratio. Measures a merchandising agency's capacity to earn a revenue from the sale of stock. Can also be referred to as the revenue margin. Is a measure of liquidity. Must be higher than 1. An account utilized in the periodic stock system that isn't used within the perpetual stock system is Merchandise Stock Gross sales Gross sales Returns and Allowances Accounts Payable Purchases The present interval's ending stock is: The following interval's starting stock. The present interval's value of products offered. The prior interval's starting stock. The present interval's web purchases. The present interval's starting stock. Liquidity issues are prone to exist when an organization's acid-test ratio: Is lower than the present ratio. Is 1 to 1. Is greater than 1 to 1. Is considerably decrease than 1 to 1. Is greater than the present ratio. The next statements relating to gross revenue are true besides: Gross revenue can be referred to as gross margin. Gross revenue much less different working bills equals earnings from operations. Gross revenue is just not calculated on the multiple-step earnings assertion. Gross revenue should cowl all working bills to yield a return for the proprietor of the enterprise. Gross revenue equals web gross sales much less value of products offered. A debit memorandum is: Required each time a journal entry is recorded. The supply doc for the acquisition of merchandise stock. Required when a purchase order low cost is granted. The doc a purchaser points to tell the vendor of a debit made to the vendor's account within the purchaser's data. Not crucial in a perpetual stock system. All the following statements associated to U.S. GAAP and IFRS are true besides: Accounting for fundamental stock transactions is identical beneath the 2 methods. The closing course of for merchandisers is identical beneath each methods. U.S. GAAP affords little steering concerning the presentation order of bills. Neither system requires separate disclosure of things when their measurement, nature, or frequency are vital for correct interpretation. Neither system defines working earnings. Starting stock plus web purchases is: Price of products offered. Merchandise obtainable on the market. Ending stock. Gross sales. Proven on the steadiness sheet. All the following statements relating to gross sales returns and allowances are true besides: Gross sales returns and allowances can embody a discount is the promoting worth due to broken merchandise. Gross sales returns and allowances don't mirror the likelihood of misplaced future gross sales. Gross sales returns and allowances are recorded in a separate contra-revenue account. Gross sales returns and allowances are not often disclosed in printed monetary statements. Gross sales returns and allowances are closed to the Earnings Abstract account. A columnar working paper used to arrange an organization's unadjusted trial steadiness, adjusting entries, adjusted trial steadiness, and monetary statements, and which is an non-obligatory instrument within the accounting course of is a(n): Adjusted trial steadiness. Work sheet. Publish-closing trial steadiness. Unadjusted trial steadiness. Normal ledger. An error is indicated if the next account has a steadiness showing on the post-closing trial steadiness: Workplace Tools. Accrued Depreciation-Workplace Tools. Depreciation Expense-Workplace Tools. Ted Nash, Capital. Salaries Payable. Which of the following statements is true? Proprietor's capital should be closed every accounting interval. A post-closing trial steadiness ought to embody solely everlasting accounts. Info on the work sheet can be utilized instead of getting ready monetary statements. Through the use of a piece sheet to arrange adjusting entries you want not submit these entries to the ledger accounts. Closing entries are solely crucial if errors have been made. The particular account used solely within the closing course of to briefly maintain the quantities of revenues and bills earlier than the web distinction is added to (or subtracted from) the proprietor's capital account is the: Earnings Abstract account. Closing account. Stability column account. Contra account. Nominal account. If in getting ready a work sheet an adjusted trial steadiness quantity is mistakenly sorted to the improper work sheet column. The Stability Sheet columns will steadiness on finishing the work sheet however with the improper web earnings, if the quantity sorted in error is: An expense quantity positioned within the Stability Sheet Credit score column. A income quantity positioned within the Stability Sheet Debit column. A legal responsibility quantity positioned within the Earnings Assertion Credit score column. An asset quantity positioned within the Stability Sheet Credit score column. A legal responsibility quantity positioned within the Stability Sheet Debit column. A post-closing trial steadiness stories: All ledger accounts with balances, none of which will be momentary accounts. All ledger accounts with balances, none of which will be everlasting accounts. All ledger accounts with balances, which embody some momentary and a few everlasting accounts. Solely income and expense accounts. Solely asset accounts. The balances within the unadjusted columns of a piece sheet will agree with: the balances mirrored within the firm's monetary statements. the balances mirrored within the firm's unadjusted trial steadiness. no matter balances administration has determined to report. the balances within the firm's post-closing trial steadiness. the balances administration budgeted for the accounting interval. Non permanent accounts embody the entire following besides: Consulting income. Withdrawals. Hire expense. Pay as you go lease. Earnings Abstract. One other identify for momentary accounts is: Actual accounts. Contra accounts. Accrued accounts. Stability column accounts. Nominal accounts. A trial steadiness ready after the closing entries have been journalized and posted is the: Unadjusted trial steadiness. Publish-closing trial steadiness. Normal ledger. Adjusted trial steadiness. Work sheet.