Rigby Company buys merchandise from Shoshone Company with an invoice cost of 10,000 and shipping terms of FOB shipping point. The freight costs amount to 1,000. Which of the following statements is TRUE?
A) Rigby Company will record freight-in costs of 1,000.
B) Shoshone Company will record freight-out costs of 1,000.
C) Shoshone Company will record freight-in costs of 1,000.
D) Rigby Company will have inventory cost of 10,000.
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Q. 2) An amount of an employee's gross pay which is exempt from federal income tax withholding is a(n)
a. additional withholding allowance.
b. withholding allowance.
c. zero bracket amount.
d. special withholding allowance.
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Q. 3) Team Shirts has 189,000 in total current assets and 165,000 in total current liabilities. Calculate the current ratio for Team Shirts. Round your answer to one decimal place.
What will be an ideal response?
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Q. 4) Wok 'N' Roll, Inc., has assets of 500,000 and liabilities of 350,000. Calculate the amount of shareholder's equity.
What will be an ideal response?
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Q. 5) Control of inventory should begin as soon as the inventory is received. Which of the following internal control stepsis notdone to meet this goal?
a. check the invoice to the receiving report
b. check the invoice to the purchase order
c. check the invoice with the person who specifically purchased the item
d. check the invoice extensions and totals
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Q. 6) The Allowance for uncollectible accounts ________.
A) is subtracted from Sales to calculate Net sales on the income statement
B) is always equal to Bad debts expense for the year
C) is subtracted from Accounts receivable to calculate Net realizable value of accounts receivable
D) is subtracted from Cash on the balance sheet
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