An NSF check should appear in which section of the bank reconciliation?

Deduction from the balance per books.

Addition to the balance per books.

Deduction from the balance per bank.

Addition to the balance per bank.

A check written by the company for $167 is incorrectly recorded by a company as $176 . On the bank reconciliation, the $9 error should be...

deducted from the balance per books

deducted from the balance per bank

In order to be classified as merchandise inventory, merchandise must be:

both owned by the company and in a form ready for sale to customers in the ordinary course of business

in a form ready for sale to customers in the ordinary course of business only

General Motors would classify automobiles on the assembly line in various stages of completion as:

none of these answers are correct

Examples of cash equivalents include:

Treasury bills, commercial paper, and money market funds.

Treasury bills, commercial paper, money market funds, and bonds.

Treasury bills, stocks, bonds, and money market funds.

Currency, treasury bills, commercial paper, and money market funds.

A cash budget contains three sections:

cash receipts, cash disbursements, and financing.

a. financing, investing, and operating.

cash receipts, investing, and financing.

cash receipts, cash disbursements, and operating.

The cash receipts section of the cash budget contains:

all of these answers are correct.

expected receipts from the company's principal source(s) of revenue.

anticipated receipts of interest.

anticipated receipts of dividends.

The cash disbursements section of the cash budget contains:

all of these answers are correct.

expected payments for inventory labor, overhead.

expected payments for selling and administrative expenses.

expected payments for income taxes, dividends, investments, and plant assets.

The three assumed cost flow methods are:

specific identification, FIFO, and LIFO.

perpetual, periodic, and specific identification.

none of these answer choices are correct.

Which of the following statements are not true regarding LIFO:

ending inventory is based on the price of the most recent units purchased.

assumes the latest goods purchased are the first to be sold.

seldom coincides with the actual physical flow of inventory.

ending inventory obtained by taking the unit cost of the earliest goods available for sale and working forward until all units of inventory have been costed.

Under lower-of-cost-or-net realizable value (LCNRV), net realizable value is defined as:

net amount expected to be received from the sale of inventory.

gross amount expected to be received from the sale of inventory.

The revenue recognition principle requires that sales revenues be recognized:

when the goods are transferred from the seller to the buyer.

when the merchandise is ordered.

none of these answer choices are correct.

The income statement of a merchandising company contains the following unique features:

sales revenue, cost of goods sold, and gross profit.

sales revenue, work in process, and operating expenses.

sales revenue, work in process and gross profit.

sales revenue, finished goods, and net income.

All of the following are examples of business documents except:

memorandum describing merchandise.

In a periodic inventory system, the cost of goods sold is determined:

at the end of the accounting period.

none of these answer choices are correct.

Freight costs incurred by the seller on outgoing merchandise are considered:

operating expenses to the seller.

If a sales invoice shows credit terms of 2/10, n/30, the discount period is:

cannot be determined from the information given.

When purchases of merchandise are recorded in the Purchases account rather than the Inventory account the inventory system being used is the:

LIFO assumed cost flower method.

4. To determine cost of goods sold under a periodic inventory system, all of the following are necessary except:

total cash register receipts for the period.

determination of the cost of goods purchased.

purchases of merchandise for the period.

determination of the cost of goods on hand at the beginning and end of the accounting period.

6. When legal title of the goods remains with the seller until the goods reach the buyer the terms are said to be:

none of these answer choices are correct.

The principles of internal control consist of all of the following except:

generally accepted accounting principles.

establishment of responsibility.

The following measure is recommended to obtain maximum benefit from independent internal verification:

d. all of these answers are correct.

the verification should be made periodically or on a surprise basis.

the verification should be done by an employee who is independent of the personnel responsible for the information.

discrepancies and exceptions should be reported to a management level that can take appropriate corrective action.

The concept of reasonable assurance rests on the premise that:

the cost of establishing control procedures should not exceed their expected benefit.

employees duties should be rotated.

employees should be required to take vacations.

physical controls should be in place.

coins, currency, checks, money orders, money on hand or on deposit in a bank or similar depository.

coin, currency, and postage stamps.

coins, currency, postage stamps, money on deposit in a bank.

all of these answers are correct.

The bank would debit the customer's account for all of the following items except:

collection of a note receivable.

NSF check deposited by customer.

Accounting test 2

University

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42 Qs

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Practice Problem

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CCSS

HSA.CED.A.4, 7.NS.A.1, 7.RP.A.3

Standards-aligned

Andrew Andrew

Used 7+ times

FREE Resource

42 questions

Show all answers

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Each of the following companies is a merchandising company except a

wholesale parts company

moving company

candy store

furniture store

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Net income will result if gross profit exceeds

cost of goods sold.

operating expenses.

purchases.

cost of goods sold plus operating expenses.

A merchandiser that sells directly to consumers is a

retailer.

wholesaler

broker.

service enterprise.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If goods in transit are shipped FOB destination,

the seller has legal title to the goods until they are delivered.

the buyer has legal title to the goods until they are delivered.

the transportation company has legal title to the goods while the goods are in transit.

no one has legal title to the goods until they are delivered.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Goods held on consignment are

goods held by one party for sale on behalf of the owner.

included in the ending inventory of the party holding the goods.

kept for sale on the premises of the owner.

included as part of no one's ending inventory.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The LIFO inventory method assumes that the cost of the latest units purchased is

the last to be allocated to cost of goods sold

the first to be allocated to ending inventory.

the first to be allocated to cost of goods sold.

not allocated to cost of goods sold or ending inventory.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is an inventory cost flow method?

Periodic

Specific Identification

Perpetual

Lower cost of market

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Accounting test 2

42 questions

Each of the following companies is a merchandising company except a

Net income will result if gross profit exceeds

A merchandiser that sells directly to consumers is a

If goods in transit are shipped FOB destination,

Goods held on consignment are

The LIFO inventory method assumes that the cost of the latest units purchased is

Which of the following is an inventory cost flow method?

Suppose that the following information was available for Tesla Company at December 31, 2025: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $630,000; and sales $900,000. Tesla's inventory turnover, rounded to one decimal place, in 2025 was

An NSF check should appear in which section of the bank reconciliation?

Which of the following would be added to the balance per books on a bank reconciliation?

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