Question

I am reviewing for an exam and need help with a few questions... Please explain the solving process so I could learn properly.

1)On November 10 of the current year, a company provides services on account to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on November 17. How would the company record the collection of cash on November 17?

2) A company has the following at the end of the year:

Inventory Quantity Purchase Cost Market Value
Item A 100 $5 $8
Item B 200 $9 $7

For what amount would ending inventory be reported in the balance sheet?

	a.	$1,900.
	b.	$2,400.
	c.	$2,200.
	d.	$2,300.
	e.	$2,600.

3)

On December 31, 2018, a company had balances in Accounts Receivable of $53,600 (debit) and in Allowance for Uncollectible Accounts of $1,325 (credit). During 2019, the company wrote off $1,465 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $1,280 at December 31, 2019. Bad debt expense for 2019 would be:

	a.	$1,465.
	b.	$1,280.
	c.	$1,140.
	d.	$1,420.
	e.	$1,365.

4)

The adjusting entry to record the expiration of insurance over the year would include:

	a.	A credit to Insurance Expense.
	b.	A credit to Cash
	c.	A debit to Prepaid Insurance.
	d.	A credit to Prepaid Insurance.
	e.	A credit to Insurance Payable.

5)

A company sells soccer goals to customers over the Internet. History shows that 2% of the company’s goals will need repair under the warranty program. For the year, the company has sold 4,100 goals and 48 have been repaired. If the estimated cost to repair a goal is $140, what would be the Warranty Liability at the end of the year?

	a.	$5,260
	b.	$0.
	c.	$4,760.
	d.	$11,480.
	e.	$4,810.

6)

On January 23, a company purchases inventory for $100. On February 12, the inventory is sold for $150 on account. Which of the following is recorded on February 12?

	a.	Debit sales revenue for $150.
	b.	Credit inventory for $150.
	c.	Two of the other answers are correct.
	d.	Debit cost of goods sold for $100.
	e.	Debit accounts receivable for $100.

7)

On January 23, a company purchases inventory for $100. On February 12, the inventory is sold for $150 on account. Which of the following is recorded on February 12?

	a.	Debit sales revenue for $150.
	b.	Credit inventory for $150.
	c.	Two of the other answers are correct.
	d.	Debit cost of goods sold for $100.
	e.	Debit accounts receivable for $100.

Answer 1

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