Accounting II Chapter 6 Review

The amount of the promissory note plus the interest earned on the due date is called the:

• Due amount
• Maturity value

• Interest
• Final sum

Under which method of inventory costing is the cost flow assumed to be in the reverse order in which the expenditures were made?

• LIFO
• Specific Identification
• Weighted Average
• FIFO

The two methods of accounting for uncollectible receivables are the:

• allowance method and direct write-off method
• bad debt method and unofficial method

• credit loss method and net debit method

• indirect write-off method and accrued debt method

When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory costing method is called:

• LIFO
• FIFO
• Average Cost
• Specific Identification

A 30-day, 5% note for $5,000 dated May 15 is received from a customer on account. The face value of the note is:

• $5,200.50
• $5,020.50
• $5,000.00

• $4,500.50

During a period of consistently rising prices, the method of inventory costing that will result in reporting the greatest cost of merchandise sold is:

• LIFO (Last In, First Out)
• Weighted Average Cost
• FIFO (First In, First Out)
• Specific Identification

A written promise to pay a sum of money on demand or at a definite time is called a(n):

• Deed of trust
• Bill of exchange
• Certificate of deposit
• Promissory note

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $383,421 and Allowance for Doubtful Accounts has a negative balance of $26,542. What is the net realizable value of the accounts receivable?

• $300,000
• $400,000
• $356,879
• $250,000

In reference to a promissory note, the person who is to receive payment is called the:

• Payer
• Recipient
• Beneficiary
• Payee

If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is:

• LIFO (Last-In, First-Out)
• Weighted Average Cost
• Specific Identification
• FIFO (First-In, First-Out)