1For the revenue process which of the following document sequences is correct?
Customer order, sales order, packing slip, bill of lading
Sales order, packing slip, customer order, bill of lading
Customer order, bill or lading, sales order, packing slip
Customer order, packing slip, sales order, bill of lading
2
During the current year, ending inventory was higher under the LIFO method than under the FIFO method. Which of the following statements about price changes is true?
Prices were unchanged.
Prices were increasing.
Unable to determine from the information given
Prices were decreasing.
3
In times of rising prices, ______ generally result(s) in the ______ cost of goods sold.
FIFO, higher
FIFO, lower
LIFO, lower
LIFO and FIFO, same
1For the revenue process which of the following document sequences is correct?
| Customer order, sales order, packing slip, bill of lading |
| Sales order, packing slip, customer order, bill of lading |
| Customer order, bill or lading, sales order, packing slip |
| Customer order, packing slip, sales order, bill of lading |
2
During the current year, ending inventory was higher under the LIFO method than under the FIFO method. Which of the following statements about price changes is true?
| Prices were unchanged. |
| Prices were increasing. |
| Unable to determine from the information given |
| Prices were decreasing. |
3
In times of rising prices, ______ generally result(s) in the ______ cost of goods sold.
| FIFO, higher |
| FIFO, lower |
| LIFO, lower |
| LIFO and FIFO, same |
Related questions
During the year, TRC Corporation has the following inventory transactions:
| DateΒ | Transactions | Number of Units | Unit Cost | Total Cost |
| Jan. 1 | Beginning Inventory | 42 | $34 | $1,428 |
| Apr. 7 | Purchase | 122 | $36 | $4,392 |
| Jul. 16 | Purchase | 192 | $39 | $7,488 |
| Oct 6. | Purchase | 102 | $40 | $4,080 |
| Total | 458 | Β | $17,388 | |
For the entire year, the company sells 411 units of inventory for $52 each.
Calculate ending inventory, cost of goods sold, sales revenue and gross profit according to:
1. FIFO method
2. LIFO method
3. Weighted Average method
Also, determine which method will result in higher profitability when inventory costs are rising?
Question 1
Identify the item below that is not one of the four different types of data processing activities.
| deleting | ||
| reading | ||
| creating | ||
| using |
Question 2
All of the following are advantages of an ERP system except
| ERPs permit manufacturing plants to receive new orders in real time. | ||
| in an ERP, data input is captured or keyed once. | ||
| it takes considerable experience and training to use an ERP system effectively. | ||
| ERPs permit management to gain greater visibility into every area of the enterprise. |
Question 3
Sam Jones has been the controller of Downtown Tires for 25 years. Ownership of the firm recently changed hands and the new owners are conducting an audit of the financial records. The audit has been unable to reproduce financial reports that were prepared by Sam. While there is no evidence of wrongdoing, the auditors are concerned that the discrepancies might contribute to poor decisions. Which of the following characteristics of useful information is absent in the situation described above?
| relevant | ||
| reliable | ||
| complete | ||
| timely | ||
| understandable | ||
| verifiable | ||
| accessible |
Question 4
An ERP system might facilitate the purchase of direct materials by all of the following except
| preparing a purchase order when inventory falls to reorder point. | ||
| routing a purchase order to a purchasing agent for approval. | ||
| communicating a purchase order to a supplier. | ||
| selecting the best supplier by comparing bids. |
Question 5
Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area. Antia uses computer technology to provide superior customer service. The store's database system was designed to make detailed information about each Japanese fan easily accessible to her customers. Accordingly, the fan price and condition are provided for each fan, along with many pictures of each fan. In Antia's database, the price of the Japanese fans is a(n)
| entity. | ||
| attribute. | ||
| field. | ||
| record. |
Question 6
Which of the following is not considered a source document?
| A copy of the company's shipping document. | ||
| A copy of the company's ledger. | ||
| A copy of the company's sales journal. | ||
| A copy of the company's financial statements. |
Question 7
In an ERP system, the module used to record data about transactions in the disbursement cycle is called
| financial. | ||
| order to cash. | ||
| customer relationship management. | ||
| purchase to pay. |
Question 8
Baggins Incorporated identifies new product development and product improvement as the top corporate goals. An employee developed an innovation that will correct a shortcoming in one of the company's products. Although Baggins current Return on Investment (ROI) is 12%, the product innovation is expected to generate ROI of only 10%. As a result, awarding bonuses to employees based on ROI resulted in
| goal conflict. | ||
| information overload. | ||
| decreased value of information. | ||
| goal congruence. |
Question 9
________ are examples of activities that constitute inbound logistics.
| Activities that transform inputs into final products or services | ||
| Activities that provide post-sale support to customers | ||
| Activities that consist of receiving, storing, and distributing the materials used as inputs by the organization to create goods and/or services it sells | ||
| Activities that help customers to buy the organization's products or services |
Question 10
In which transaction cycle would information for inventory purchases be most likely to pass between internal and external accounting information systems?
| the revenue cycle | ||
| the expenditure cycle | ||
| the human resources / payroll cycle | ||
| the financing cycle |
Question 11
The collection of customer payment is part of which transaction cycle?
| the human resources cycle | ||
| the production cycle | ||
| the revenue cycle | ||
| the expenditure cycle |
Question 12
Which of the following is an example of source data automation?
| POS (point-of-sale) scanners in retail stores | ||
| a bill of lading | ||
| a subsidiary ledger | ||
| a utility bill |
Question 13
All of the following are guidelines for developing a good coding system except
| be as sophisticated as possible to promote usage. | ||
| be consistent with its intended use. | ||
| be flexible to allow for growth. | ||
| be consistent with the company's organization structure. |
Question 14
What is a key decision that needs to be made with regards to borrowing money from lenders?
| the location | ||
| pro forma income statement | ||
| how much capital to acquire | ||
| job descriptions |
Question 15
Identify the false statement below.
| A service company does not have an inventory system. | ||
| Retail stores do not have a production cycle. | ||
| Financial institutions have installment-loan cycles. | ||
| Every organization should implement every transaction cycle module. |
Question 16
The chart of accounts of a fast-food restaurant would probably include
| a list of customers. | ||
| a list of financial statement accounts. | ||
| a list of vendors. | ||
| a list of employees. |
Question 17
Which statement below regarding the AIS is false?
| Traditionally, most AIS have been designed so that both financial and operational data are stored in a manner that facilitates their integration in reports. | ||
| The AIS must be able to provide managers with detailed and operational information about the organization's performance. | ||
| Both traditional financial measures and operational data are required for proper and complete evaluation of performance. | ||
| The AIS was often just one of the information systems used by an organization to collect and process financial and nonfinancial data. |
Question 18
In Petaluma, California, electric power is provided to consumers by Pacific Power. Each month Pacific Power mails bills to 186,000 households and then processes payments as they are received. What is the best way for this business to ensure that payment data entry is efficient and accurate?
| well-designed paper forms | ||
| turnaround documents | ||
| source data automation | ||
| sequentially numbered bills |
Question 19
Data must be converted into information to be considered useful and meaningful for decision making. There are seven characteristics that make information both useful and meaningful. If the same information can be reproduced by two independent and knowledgeable people, it is representative of the characteristic of
| verifiability. | ||
| truthful. | ||
| relevance. | ||
| reliability. |
Question 20
Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area. Antia uses computer technology to provide superior customer service. The store's database system was designed to make detailed information about each Japanese fan easily accessible to her customers. Accordingly, the fan price and condition are provided for each fan, along with many pictures of each fan. In Antia's database, the data about each Japanese fan represents a(n)
| entity. | ||
| attribute. | ||
| field. | ||
| record. |
Need help with 8-11
Create financial statements by properly employing prescribedmethods in accordance with generally accepted accountingprinciples: A. Step Eight: Prepare the financial statements. Notethat you must use your adjusted trial balance to prepare the incomestatement, statement of ownerΓ’ΒΒs equity, and balance sheet. You mustcomplete these statements in this order, as there areinterdependencies among them. B. Step Nine: Complete the Γ’ΒΒClosingEntriesΓ’ΒΒ tab in your workbook by closing all temporary incomestatement amounts to create closing entries. C. Step Ten: Preparethe Γ’ΒΒPost Closing Trial BalanceΓ’ΒΒ tab for the next accountingperiod. [ACC-201-03] D. Step Eleven: Prepare the reversing entriesin the Γ’ΒΒReversing EntriesΓ’ΒΒ tab of your workbook.
Here is all of the info to go along with it:
July 1: You take $10,000 from your personal savings account andbuy common stock in Peyton Approved. July 1: Purchase $6,500 inbaking supplies from vendor, on account. July 3: Your parents lendthe company $10,000 cash in exchange for a two-year, 6% notepayable. Interest and the principal are repayable at maturity. July7: Enter into a lease agreement for bakery space. The agreement isfor 1 year. The rent is $1,500 per month, and the last monthΓ’ΒΒs rentpayment of $1,500 is required at time of lease agreement. Thepayment was made in cash. Lease period is effective July 1, 2018,through June 30, 2019. July 10: Pay $375 to the county for abusiness license. July 11: Purchase a cash register for $250(deemed to be not material enough to qualify as depreciableequipmentΓ’ΒΒuse misc. exp.). July 13: You have baking equipment,including an oven and mixer, which you have been using for yourhome-based business and will now start using in the bakery. Youestimate that the equipment is currently worth $6,000, and youtransfer the equipment into the business in exchange for additionalcommon stock. The equipment has a 5-year useful life. July 13: Pay$200 for business cards/flyers/posters/ads to use for advertising.July 14: Pay $300 for office supplies. July 15: Hire part-timehelper to be paid $12 per hour. Pay periods are the 1st through the15th and 16th through the end of the month, with paydays being the20th for the first pay period and the 5th of the following monthfor the second pay period. (No entry is required on this date; itis here for informational purposes only.) July 30: Receivedtelephone bill for July in amount of $75. Payment is due on August10. 6 July 31: Pay $2,400 for a 12-month insurance policy. Policyeffective dates are August 1, 2018, through July 31, 2019. July 31:Accrue wages earned for employee for period of 16th through 31st ofJuly (Wage calculations table provided below). July 31: Total Julybakery sales were $15,000. $5,000 of these sales are on accountsreceivable. Step Two Data (Click on the link to return to theprompt.) The following events occur in August, 2018: August 5: Paidemployee for period ending 7/31. August 8: Receive payments fromcustomers towards accounts receivable in amount of $3,800. August10: Paid July telephone bill. August 15: Purchase additional bakingsupplies in amount of $5,000 from vendor, on account. August 15:Accrue wages earned for employee from period of 1st through 15th ofAugust (Wage calculations table provided below). August 15: Payrent on bakery space. August 18: Receive payments from customerstowards accounts receivable in amount of $3,000. August 20: Paid$8,500 toward baking supplies vendor payable. August 20: Payemployee for period ending 8/15. August 22: $300 in office suppliespurchased. August 31: Received telephone bill for August in amountof $75. Payment is due on September 10. 7 August 31: Accrue wagesearned for employee for period of August 16th through August 31st(Wage calculations table provided below). August 31: August bakerysales total $20,000. $7,500 of this total is on accountsreceivable. Step Three (Click on the link to return to the prompt.)Updated Scenario: Many customers have been asking for morehypoallergenic products, so in September you start carrying a lineof hypoallergenic shampoos on a trial basis. The followinginformation relates to the purchase and sales of the shampoo: Γ―ΒΒ· Youuse the perpetual inventory method. Although you could use thefollowing valuation methodsΓ’ΒΒFIFO, LIFO, or weighted average, youchoose to use the FIFO method. Data: The following events occur inSeptember, 2018: September 1: Paid dividends to self in amount of$10,000. September 5: Pay employee for period ending 8/31.September 7: Purchase merchandise for resale. See Γ’ΒΒInventoryValuationΓ’ΒΒ tab for details. September 8: Receive payments fromcustomers toward accounts receivable in amount of $4,000. September10: Pay August telephone bill. September 11: Purchase bakingsupplies in amount of $7,000 from vendor on account. September 13:Paid on supplies vendor account in amount of $5,000. September 15:Accrue employee wages for period of September 1 through September15. September 15: Pay rent on bakery space: $1,500. 8 September 15:Record merchandise sales transaction. See Γ’ΒΒInventory ValuationΓ’ΒΒ tabfor details. September 15: Record impact of sales transaction onCOGS and the inventory asset. See Γ’ΒΒInventory ValuationΓ’ΒΒ tab fordetails. September 20: Pay employee for period ending 9/15.September 20: Purchase merchandise inventory for resale tocustomers. See Γ’ΒΒInventory ValuationΓ’ΒΒ tab for details. September 24:Record sales of merchandise to customers. See Γ’ΒΒInventory ValuationΓ’ΒΒtab for details. September 24: Record impact of sales transactionon COGS and the inventory asset. See Γ’ΒΒInventory ValuationΓ’ΒΒ tab fordetails. September 30: Purchase merchandise inventory for resale tocustomers. See Γ’ΒΒInventory ValuationΓ’ΒΒ tab for details. September 30:Accrue employee wages for period of September 16th throughSeptember 30th September 30: Total September bakery sales are$20,000. $6,000 of these sales are on accounts receivable. Step SixData (Click on the link to return to the prompt.) On September 30,the following adjustments must be made: Γ―ΒΒ· [Note: This is a sample.]Depreciation of baking equipment transferred to company on 7/13.Assume a half month of depreciation in July using the straight-linemethod. Γ―ΒΒ· Accrue interest for note payable. Assume a full month ofinterest for July. (6% annual interest on $10,000 loan fromparents.) Γ―ΒΒ· Record insurance used for the year. Γ―ΒΒ· Actual bakingsupplies on-hand as of September 30 are $1,100. Γ―ΒΒ· Office supplieson-hand as of September 30 are $50. Wage calculation data: 9 MonthHours Rate Pay 31 Jul. 10 12 120 15 Aug. 40 12 480 31 Aug. 35 12420 15 Sep. 38 12 456 30 Sep. 40 12 480
PEYTON APPROVED | |||
General Journal for the period from July, 1 to September, 30 | |||
Date | Account Title | Debit | Credit |
July, 1 | Cash | $10,000 | |
Common Stock | $10,000 | ||
July, 1 | Baking Supplies | $6,500 | |
Accounts Payable | $6,500 | ||
July, 3 | Cash | $10,000 | |
6% Note Payable | $10,000 | ||
July, 7 | Prepaid Rent | $1,500 | |
Cash | $1,500 | ||
July, 10 | Licensing fee | $375 | |
Cash | $375 | ||
July, 11 | Miscellaneous Expense | $250 | |
Cash | $250 | ||
July, 13 | Baking Equipment | $6,000 | |
Common Stock | $6,000 | ||
July, 13 | Advertising expense | $200 | |
Cash | $200 | ||
July, 14 | Office Supplies | $300 | |
Cash | $300 | ||
July, 30 | Telephone expense | $75 | |
Accounts Payable | $75 | ||
July, 31 | Prepaid Insurance | $2,400 | |
Cash | $2,400 | ||
July, 31 | Salaries expense | $120 | |
Salaries payable | $120 | ||
July, 31 | Cash | $10,000 | |
Accounts Receivable | $5,000 | ||
Sales | $15,000 | ||
Aug, 5 | Salaries payable | $120 | |
Cash | $120 | ||
Aug, 8 | Cash | $3,800 | |
Accounts Receivable | $3,800 | ||
Aug,10 | Accounts Payable | $75 | |
Cash | $75 | ||
Aug,15 | Baking Supplies | $5,000 | |
Accounts Payable | $5,000 | ||
Aug,15 | Salaries expense | $480 | |
Salaries payable | $480 | ||
Aug,15 | Rent Expense | $1,500 | |
Cash | $1,500 | ||
Aug,18 | Cash | $3,000 | |
Accounts Receivable | $3,000 | ||
Aug,20 | Accounts Payable | $8,500 | |
Cash | $8,500 | ||
Aug,20 | Salaries payable | $480 | |
Cash | $480 | ||
Aug,22 | Office Supplies | $300 | |
Cash | $300 | ||
Aug,31 | Telephone expense | $75 | |
Accounts Payable | $75 | ||
Aug,31 | Salaries expense | $420 | |
Salaries payable | $420 | ||
Aug,31 | Cash | $12,500 | |
Accounts Receivable | $7,500 | ||
Sales | $20,000 | ||
Sept, 1 | Dividend | $10,000 | |
Cash | $10,000 | ||
Sept, 5 | Salaries payable | $420 | |
Cash | $420 | ||
Sept, 8 | Cash | $4,000 | |
Accounts Receivable | $4,000 | ||
Sept,10 | Accounts Payable | $75 | |
Cash | $75 | ||
Sept,11 | Baking Supplies | $7,000 | |
Accounts Payable | $7,000 | ||
Sept,13 | Accounts Payable | $5,000 | |
Cash | $5,000 | ||
Sept,15 | Salaries expense | $456 | |
Salaries payable | $456 | ||
Sept,15 | Rent Expense | $1,500 | |
Cash | $1,500 | ||
Sept,20 | Salaries payable | $456 | |
Cash | $456 | ||
Sept,30 | Salaries expense | $480 | |
Salaries payable | $480 | ||
Sept,30 | Cash | $14,000 | |
Accounts Receivable | $6,000 | ||
Sales | $20,000 | ||
Unadjusted Trial Balance | Adjusting Entries | Adjusted Trial Balance | ||||
Account | Debit | Credit | Debit | Credit | Debit | Credit |
Cash | 25,356.75 | 25,356.75 | ||||
Baking Supplies | 18,500.00 | 17,400.00 | 1,100.00 | |||
Merchandise Inventory | 175.45 | 175.45 | ||||
Prepaid Rent | 1,500.00 | 1,500.00 | ||||
Prepaid Insurance | 2,400.00 | 400.00 | 2,000.00 | |||
Baking Equipment | 6,000.00 | 6,000.00 | ||||
Misc. Supplies | 600.00 | 550.00 | 50.00 | |||
Accounts Receivable | 7,700.00 | 7,700.00 | ||||
Notes Payable | 10,000.00 | 10,000.00 | ||||
Accounts Payable | 2,000.00 | 2,000.00 | ||||
Wages Payable | 480.00 | 480.00 | ||||
Common Stock | 16,000.00 | 16,000.00 | ||||
Dividends | 10,000.00 | 10,000.00 | ||||
Bakery Sales | 55,000.00 | 55,000.00 | ||||
Merchandise sales | 221.00 | 221.00 | ||||
Baking Supplies Expense | 17,400.00 | 17,400.00 | ||||
Rent Expense | 4,500.00 | 4,500.00 | ||||
Insurance Expense | 400.00 | 400.00 | ||||
Misc. Expense | 250.00 | 250.00 | ||||
Business License Expense | 375.00 | 375.00 | ||||
Advertising Expense | 200.00 | 200.00 | ||||
Wages Expense | 1,836.00 | 1,836.00 | ||||
Telephone Expense | 150.00 | 150.00 | ||||
COGS | 157.80 | 157.80 | ||||
Depreciation Expense | 250.00 | 250.00 | ||||
Accumulated Depreciation | 250.00 | 250.00 | ||||
Interest Expense | 150.00 | 150.00 | ||||
Interest Payable | 150.00 | 150.00 | ||||
Misc. Supplies Expense | 550.00 | 550.00 | ||||
Total | 81,701.00 | 81,701.00 | 18,750.00 | 18,750.00 | 82,101.00 | 82,101.00 |
