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51. The number of shares of authorized stock of acorporation:

a. must be recorded as a journal entry.

b. changes every time stock is sold.

c. has no limit.

d. is stated in the charter.

52. If ending inventory is understated for Year 1, then in Year2:

a. cost of goods sold and gross profit will both beunderstated.

b. cost of goods sold will be understated and gross profit willbe overstated.

c. cost of goods sold and gross profit will both beoverstated.

d. cost of goods sold will be overstated and gross profit willbe understated.

What are the answers? please let me know!

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Bunny Greenfelder
Bunny GreenfelderLv2
28 Sep 2019

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1-If period 1 ending inventory is understated , than :
A. Both cost if goods sold and net income are understated in period1.
B. Cost of goods sold is understated and net income is overstatedin period 1.
C. Cost of goods sold is overstated and net income in understatedin period 1.
D. Both cost of goods sold and net income are overstated in period1.

2-One a lot of merchandise was counted at $566.34. A second countof the same merchandise showed 566.82. The difference could beignored due to :
A . Conservation C. Entity
B. Materiality D. Consistency

3- The Journal entry to record the purchase of $ 7,400 of inventoryon account under the perpetual inventory method is :
A. Debit inventory , $ 7400 ; Credit cash $ 7400.
B. Debit Purchase , $ 7400 ; Credit account payable , $ 7400.
C. Debit inventory , $ 7400 ; Credit accounts payable, $7400.
D. Debit cost of goods sold, $ 7400 ; Credit inventory , $7400.


4- . Under LIFO method , the flow of goods through the accountingrecords will:
A. have no relationship to the physical flow of goods through thebusiness.
B. Exactly match the physical flow goods through thebusiness.
C. Closely match the physical flow goods through thebusiness.
D. Be nearly the opposite of the physical flow of goods through thebusiness.
















1. How should the balances of Progress Billings and Constructionin Progress be shown at reporting dates prior to completion of along-term contract

a. Progress billings as income, construciton in progress asinventory

b. Net , as income from construction if credit balance, and lossfrom construction if debit balance

c. Progress Billings as deferred income, Construction inProgress as a current asset

d. Net, as a current asset if debit balance and currentliability if credit balance

3. the competed-contract method of accounting for long-termconstruction-type contracts is preferable when

a. a contractor is involved in numerous projects

b. the contracts are of a relatively long duration

c. estimates of costs to complete and extent of progress towardcompletion are reasonably dependable

d. there are inherent uncertainties in the contract beyondnormal business risks

4. C & J Construction has consistently used the percentageof completion method of recognizing income. Last year C & Jstarted work on a $4,500,000 constuction contract, which wascompleted this year, the accounting records desclosed the followingdata for the last year

Progress billings - $1,650,000

Costs incurred - 1,350,000

Collections - 1,050,000

Estimated cost to complete - 2,700,000

How much income should C & J have recognized on thiscontract last year?

a. 105,000

b. 150,000

c. 300,000

d. 350,000

6. The use of the gross profit assumes

a. the amount of gross profit is the same as in prior years

b. sales and cost of goods sold have not changed from previousyears

c. inventory values have not increased from previous years

d. the relationship between selling price and cost of goods soldis similar to prior years

7. the gross profit method of inventory valuation is not validwhen

a. there is substantial increase in the quantity of inventoryduring the year

b. there is substantial increase in the cost of inventory duringthe year

c. the gross margin percentage changes significantly during theyear

d. all ending inventory is destroyed by dire before it can becounted

8. When the current year's ending inventory amount isoverstated,

a. the current year's cost of goods sold is overstated

b. the current year's total assets are understated

c. the current year's net income is overstated

d. the next year's income is overstated

9. If the ending inventory balance is understated, net income ofthe same period

a. will be overstated

b. will be understated

c. will be unaffected

d. cannot be determined from the above information

10. An overstatement of ending inventory in Period 1 wouldresult in income of Period 2 being

a. overstated

b. understated

c. correctly stated

d. the answer cannot be determined from the informationgiven

11. what is the maximum amount at which inventory can be valuedwhen the goods have experienced a permanent decline in value

a. historical cost

b. sales price

c. net realizable value

d. net realizable value reduced by a normal profit margin

12. Net realizable value can be defined as

a. selling price

b. selling price less costs to complete and sell

c. selling price plus costs to complete and sell

d. acquisition cost plus costs to complete and sell

13. Miller company needs an estimate of its ending inventorybalance. The following information is available

Cost Retail

sales revenue - 180,000

beginning inventory - 35,000 62,000

net purchases - 100,000 135,000

gross margin percentage - 30%

Given this information, when using the gross margin estimationmethod, ending inventory is approx

a. 1,000

b. 9,000

c. 19,000

d. 11,650

14. Which of the following would not be reported asinventory?

a. land acquired for resale by a real estate firm

b. stocks and bonds held for resale by a brokerage firm

c. partially completed goods held by a manufacturing company

d. machinery acquired by a manufacturing company for use in theproduction process

15. Cost of goods sold is equal to

a. the cost of inventory on hand at the end of a period plus netpurchases minus the cost of inventory on hand at the beginning

b. the cost of inventory on hand at the beginning of a periodminus net purchases plus the cost of inventory on hand at the endof a period

c. the cost of inventory on hand at the beginning of a periodplus net sales minus the cost of inventory on hand at the end of aperiod

d. the cost of inventory on hand at the beginning of a periodplus net purchases minus the cost of inventory on hand at the endof a period

17. In a period of falling prices, the use of which of thefolliwng inventory cost flow methods would typically result inhighest cost of goods sold?

a. FIFO

b. LIFO

c. Weighted average cost

d. Specific identification

18. In a period of rising prices, the inventory cost allocationmethod that tends to result in the lowest reported net incomeis

a. LIFO

b. FIFO

c. Moving average

d. Weighted average

19. The LIFO inventory cost flow method may be applied to whichof the following inventory systems?

Periodic Perpetual

a. no no

b. no yes

c. yes yes

d. yes no

Carl's Calculator Xpress sells non-programmable calculators.(His target market: Accounting 209 students who forgot theircalculators on Thursday nights.) Carl's has the followinginformation available for the month of November:

# of units

Cost per unit

Beginning inventory, November 1

5

$2.00

Purchase, November 11

8

$2.50

Purchase, November 24

10

$3.00

Ending inventory, November 30

3

What is the total amount of goods available for sale that Carl'smust allocate between cost of goods sold and ending inventory?

a.

$20

b.

$23

c.

$50

d.

$60

e.

none of the above

Assume Carl's is using the FIFO cost flow method. What amountwill Carl's report as cost of goods sold for November?

a.

$40
b.

$51
c.

$52
d.

$54
e.

none of the above

assume instead that the company uses the LIFO inventory costflow method. What amount will Carl report as Inventory on thecompany's November 30 balance sheet?

a.

$6
b.

$9
c.

$51
d.

$54
e.

none of the above

but assume instead that the company uses the weighted averagecost flow method. Carl's sells all calculators for $6 each. Whatamount will Carl's report as gross profit for November? (round costper unit to 2 decimals, and final answer to whole dollars)

a.

$44
b.

$66
c.

$68
d.

$70
e.

none of the above

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