In a time of rising prices, the main reason a company would choose to use LIFO is to save on income taxes.
Indicate whether the statement is true or false
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Q. 2) Assume the gross amount of an invoice is 200 and a discount of 20 is allowed. The amount of the trade discount totals
a. 20.
b. 65.
c. 40.
d. 80.
(
Q. 3) What is the effect of the adjusting entry for bad debts expense on the Income statement?
A) a decrease in Total shareholders' equity
B) an increase in Total assets
C) a decrease in Retained earnings
D) a decrease in Net income
(
Q. 4) The difference between the balance in Accounts Receivable and the balance in the Allowance for DoubtfulAccounts is called the net realizable value of the receivables.
a. True
b. False
Indicate whether the statement is true or false
(
Q. 5) Out of Africa had the following shareholders' equity section on its balance sheet as of
December 31.
Preferred stock: 100 par, 6, cumulative 100,000
Common stock: 1 par value 25,000
Additional paid-in capital 300,000
Retained earnings 57,000
Calculate the following:
a. Number of shares of preferred stock outstanding
b. Number of shares of common stock outstanding
What will be an ideal response?
(
Q. 6) In the control matrix, the rows represent:
a. control goals of the operations process
b. recommended control plans including both present and missing controls
c. control goals of the information process
d. control goals of the management process
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