Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 3, Problem 6MCQ
To determine
Identify the option that is considered as an example of an accrual.
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If the dollar amount in ending accounts payable is greater than the dollar amount in beginning accounts payable, then
a. inventory must have increased during the period.
b. cost of goods sold must be greater in this period than in the prior period.
c. cost of goods sold must have increased by the same amount.
d. payments to suppliers during the period must have been less than the amount of inventory purchased on account.
e. cash must have decreased by the same amount.
Choose the best answer choice
Identify the statement below that describes what the Days' sales uncollected ratio assesses.
O It measures how quickly a company can convert its accounts receivables into cash.
O It assesses the company's ability to pay its debts.
O It is a useful in evaluating the liquidity of inventory.
O It measures how profitable a company is when it sells it products.
The average collection period determines the number of
a.days it takes to sell the inventory.
b.times the accounts receivable are collected during the period.
c.times the merchandise inventory was sold during the period.
d.days credit customers take to pay for their purchases.
Chapter 3 Solutions
Financial Accounting
Ch. 3 - Prob. 1YTCh. 3 - Prob. 2YTCh. 3 - Prob. 3YTCh. 3 - Prob. 4YTCh. 3 - Prob. 5YTCh. 3 - Prob. 6YTCh. 3 - Prob. 7YTCh. 3 - How does accrual basis accounting differ from cash...Ch. 3 - Prob. 2QCh. 3 - Prob. 3Q
Ch. 3 - Prob. 4QCh. 3 - What are accrued expenses?Ch. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Name two common deferred expenses.Ch. 3 - What does it mean to recognize revenue?Ch. 3 - How does matching relate to accruals and...Ch. 3 - What is depreciation?Ch. 3 - Why is depreciation necessary?Ch. 3 - Prob. 13QCh. 3 - Prob. 14QCh. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - When prepaid insurance has been used, the...Ch. 3 - Prob. 10MCQCh. 3 - Prob. 1SEACh. 3 - Prob. 2SEACh. 3 - Account for interest expense. (LO 1, 2). UMC...Ch. 3 - Prob. 4SEACh. 3 - Account for insurance expense. (LO 1, 3). Catrina...Ch. 3 - Prob. 6SEACh. 3 - Account for unearned revenue. (LO 1, 3). Able...Ch. 3 - Prob. 8SEACh. 3 - Prob. 9SEACh. 3 - Prob. 10SEACh. 3 - Calculate profit margin on sales ratio. (LO 5)....Ch. 3 - Prob. 12SEBCh. 3 - Prob. 13SEBCh. 3 - Prob. 14SEBCh. 3 - Prob. 15SEBCh. 3 - Prob. 16SEBCh. 3 - Prob. 17SEBCh. 3 - Prob. 18SEBCh. 3 - Prob. 19SEBCh. 3 - Calculate net income. (LO I, 4). Suppose a company...Ch. 3 - Prob. 21SEBCh. 3 - Prob. 22SEBCh. 3 - Prob. 23EACh. 3 - Prob. 24EACh. 3 - Prob. 25EACh. 3 - Prob. 26EACh. 3 - Prob. 27EACh. 3 - Prob. 28EACh. 3 - Account for insurance expense. (LO 1, 3). Yodel ...Ch. 3 - Prob. 30EACh. 3 - Prob. 31EACh. 3 - Prob. 32EACh. 3 - Prob. 33EACh. 3 - Prob. 34EACh. 3 - Southeast Pest Control, Inc., was started when its...Ch. 3 - Prob. 36EACh. 3 - Prob. 37EACh. 3 - Prob. 38EACh. 3 - Prob. 39EACh. 3 - Prob. 40EBCh. 3 - Prob. 41EBCh. 3 - Prob. 42EBCh. 3 - TJs Tavern paid 10,800 on February 1, 2010, for a...Ch. 3 - Prob. 44EBCh. 3 - Prob. 45EBCh. 3 - Account for insurance expense. (LO 1, 3). All...Ch. 3 - Prob. 47EBCh. 3 - Prob. 48EBCh. 3 - Prob. 49EBCh. 3 - Prob. 50EBCh. 3 - Prob. 51EBCh. 3 - Prob. 52EBCh. 3 - From the following list of accounts (1) identify...Ch. 3 - Prob. 54EBCh. 3 - Prob. 55EBCh. 3 - Prob. 56EBCh. 3 - Prob. 57PACh. 3 - Prob. 58PACh. 3 - Prob. 59PACh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 61PACh. 3 - Record adjustments. (LO 1, 2, 3). The Gladiator...Ch. 3 - Prob. 63PACh. 3 - Transactions for Pops Company for 2011 were as...Ch. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 66PACh. 3 - Prob. 67PACh. 3 - Record adjustments and prepare income statement....Ch. 3 - Prob. 69PBCh. 3 - Prob. 70PBCh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 72PBCh. 3 - Record adjustments. (LO 1, 2, 3). Summit Climbing...Ch. 3 - Prob. 74PBCh. 3 - Prob. 75PBCh. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 77PBCh. 3 - Prob. 78PBCh. 3 - Identify and explain accruals and deferrals. (LO...Ch. 3 - Prob. 2FSACh. 3 - Prob. 3FSACh. 3 - Prob. 1CTPCh. 3 - Prob. 1IECh. 3 - Prob. 3IECh. 3 - Prob. 4IE
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- In order to faithfully and accurately report revenue and income, a retailer should O estimate sales returns based on past experience and adjust annual revenues. O only record actual sales returns during an accounting period. O decrease revenues and increase cost of goods sold. O reduce revenues by estimated sales returns and reduce cash as the offsetting entry.arrow_forwardHow would Bedrock Wholesale record the October 18 transaction? a. Decrease Cash and increase Inventory b. Decrease Cash and increase Freight Expense c. Increase both Accounts Payable and Freight Expense d. Decrease both Cash and Inventory e. No entry is required. Enter the letter that corresponds to your choice. (A B C D E) How would Bedrock Wholesale record the October 22 transaction? a. Increase Inventory and decrease Cost of Goods Sold $3,000 each, and decrease Accounts Receivable and increase Sales Returns $2,250 each b. Increase Inventory and decrease Cost of Goods Sold $2,250 each, and decrease Accounts Receivable and increase Sales Returns $3,000 each c. Increase Inventory and decrease Cost of Goods Sold $2,250 each, and decrease Accounts Receivable and increase Sales Returns $2,250 each d. Increase Inventory and decrease Cost of Goods Sold $2,250 each e. Decrease Accounts Receivable and increase Sales Returns $3,000 each Enter the letter that corresponds to your…arrow_forwardWalmart takes its net sales and subtracts the cost of goods sold during the previous period. The result is Walmart's _________. a.Gross profit b. Gross sales c. Net margin d. Net incomearrow_forward
- Gross Margin of a Merchandise Business will be calculated by using which of the following formula? a. Sales less Total expenses b. Sales less Total Operating expenses c. Sales less Cost of Merchandise sold d. Sales less Merchandise Inventory at the end of the yeararrow_forwardOn June 1, Calumet Corp. paid $25,000 for inventory previously purchased on account. Which of the following statements is correct with respect to how this transaction should be shown on the transaction worksheet? Select one: a. The cash account will decrease and the deferred revenue account will decrease. b. The inventory account will decrease and the cash account will decrease. c. The cash account will decrease and the accounts payable account will decrease. d. The cash account will decrease and the retained earnings account will decrease. e. The cash account will increase and the accounts payable account will increase.arrow_forwardUnder the periodic inventory system, what account is credited when an estimate is made for sales made this year, but expected to be returned next year? (a) Merchandise Inventory (b) Customer Refunds Payable (c) Sales (d) Sales Returns and Allowancesarrow_forward
- A customer returns $690 worth of merchandise and receives a full refund. What accounts recognize this sales return, assuming the customer has not yet remitted payment to the retailer? A. accounts receivable, sales returns and allowances B. accounts receivable, cash C. sales returns and allowances, purchases D. sales discounts, cost of goods soldarrow_forwardWhich of the following indicates a positive trend for inventory management? A. increasing number of days sales in inventory ratio B. increasing inventory turnover ratio C. increasing cost of goods sold D. increasing sales revenuearrow_forwardHow much does Wilma pay Bedrock Wholesale on October 30? How would Bedrock Wholesale record the October 31 transaction? a. Decrease Cash and Accounts Payable, and increase Inventory. b. Decrease Cash and Inventory, and increase Accounts Payable. c. Decrease Cash and increase both Inventory and Accounts Payable. d. Decrease Cash and Accounts Payable only e. Decrease Cash, Inventory, and Accounts Payable. Enter the letter that corresponds to your choice. (A B C D E) How much does Bedrock Wholesale pay Barney on October 31?arrow_forward
- A customer returned damaged goods for credit. Under a perpetual system, which of the seller's accounts decreases? a. sales revenue b. sales returns c. accounts receivable d. purchase returnsarrow_forwardPurchase-related transactions The following selected transactions were completed by Epic Co. during August of the current year: Illustrate the effects of each of the transactions on the accounts and financial statements of Epic Co. Identify each transaction by date. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases, cash outflows, and the income statement effects that reduce net income as negative amounts. Aug. 3. Purchased merchandise on account for $33,400, terms FOB destination, 2/10, n/30. Aug. 9. Issued debit memorandum for $2,500 ($2,450 net of 2% discount) for merchandise from the August 3 purchase that was damaged in shipment. Aug. 10. Purchased merchandise on account, $25,000, terms FOB shipping point, n/eom. Paid $600 cash to the freight company for delivery of the merchandise. Aug. 13. Paid for invoice of August 3, less debit memorandum of August 9. Aug 31. Paid for…arrow_forwardA bank that is examining the ratio of annual costs of goods sold to average inventory, is examining which category of ratios? a.Profit measures b.Operating efficiency measures c.Liquidity measures d.Expense control measuresarrow_forward
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