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

1. Parkside Pool reports net sales of $625,000, gross profit of $275,000, and profit for the period of $15,000. The company's cost of goods sold is:

1. During the year 201X, the inventory of Debra’s Gift Shop was decreased by $50,000. If the income statement for the year 201X reported cost of goods sold of $350,000, purchases during the year must have amounted to:

1. Which of the following businesses is most likely to use a periodic inventory system?

1. Which of the following is NOT included in the financial assets?

1. An NSF check returned by the bank should be entered in the depositor's accounting records by a debit to:

1. Which of the following can be considered as an effective control of cash?

1. A bank reconciliation explains the differences between ____________.

1. When preparing bank reconciliation, deposits in transit will:

1. The Allowance for Impairment will appear on the __________.

1. Bert had accounts receivable of $280,000 and an allowance for impairment of $10,800 credit balance just before writing off as worthless an account receivable from Ernie Company of $1,600. After writing off this receivable what would be the balance in Bert's Allowance for Impairment?

1. The Allowance for Impairment represents:

1. At December 31, before adjusting and closing the accounts had occurred, the Allowance for Impairment of Seaboard Corporation showed a debit balance of $3,200. An aging of the accounts receivable indicated the amount probably uncollectible to be $2,100. Under these circumstances, a year-end adjusting entry for Impairment Loss of Receivables would include a:

1. Oceanside Company uses the Statement of Financial Position approach in estimating uncollectible accounts expense. It has just completed an aging analysis of accounts receivable at December 31, 201Y . This analysis disclosed the following information:

What is the appropriate balance for Oceanside's Allowance for Impairment at December 31, 201Y

1. The application of the matching principle to depreciation of property, plant and equipment can best be described as:

1. Land is purchased for $256,000. Additional costs include a $15,300 fee to a broker, a survey fee of $2,400, $1,750 to construct a fence and a legal fee of $8,500. What is the cost of the land?

1. Capital expenditures are recorded as:

1. Revenue expenditures are recorded as:

1. Which of the following is not a capital expenditure?

1. Coca-Cola's famous name printed in distinctive typeface is an example of:

1. When a depreciable asset is sold at a price equal to its book value, a journal entry would include

1. All of the following assets are amortized except:

1. An asset which costs $18,800 and has accumulated depreciation of $6,000 is sold for $11,600. What amount of gain or loss will be recognized when the asset is sold?

1. The book value of PPE assets (other than land):

1. A company had a beginning balance in retained earnings of $65,000. Net profit for the current year was $122,000. A cash dividends of $8,500 was declared and to be paid out early next year. The ending balance in retained earnings equals:

1. A company so far has issued 900 shares at $2 par value for $2,000 cash. The total amount of contributed capital is:

1. Treasury share represents ___________________________.

1. Skyhigh Co. has 10,000 shares authorized of which 5,000 shares are issued and outstanding. Mr. Koo bought 1,000 shares of Skyhigh Co. from Mr. Chan at $25,000, this transaction will:

1. Tripod Co. has 100,000 authorized, issued and outstanding 6% cumulative preference shares, at par value $2. It also has 10,000 shares of $1 par value ordinary shares issued and outstanding. In the Company's first year of operations, no dividends were paid. During the second year, Tripod paid cash dividends of $18,000. The dividend should be distributed as:

1. Which of the following is not classified among the investing activities in a statement of cash flows?

1. Which of the following is a financing activity?

1. Which of the following is not classified among the financing activities in a statement of cash flows?

1. Which of the following would indicate a cash disbursement?

1. Profit for the year differs from net cash from operations because of all the following except:

1. Which of the following present financial information of parent and subsidiary companies as if they are a single business unit?

1. Which of the following ratios is not considered measure of liquidity?

1. All of the followings are an example of a quick asset except

1. Working capital is the excess of current assets over

1. Which of the following ratios is not considered measure of profitability?

1. Net Sales is total sales revenue less sales returns and sales discounts.

1. Inventories are assets that a company holds for sale in the ordinary course of business.

1. The income statements of merchandising companies have an additional expense item called Cost of Goods Sold.

1. When using a perpetual inventory system, the Purchases account is debited when goods is acquired.

1. In a periodic inventory system, the cost of goods sold is determined by the following end-of-period computation: Beginning Inventory + Purchases - Ending inventory = Cost of Goods Sold.

1. The physical count helps get the inventory records up to date to reflect what is actually on hand. Most companies take a physical count of inventory at least once a year.

1. In a perpetual inventory system, a detailed inventory record is maintained, recording each purchase and sale during the accounting period.

1. In a periodic inventory system, the Inventory and Cost of Goods Sold accounts are kept up-to-date throughout the accounting period.

1. A bank reconciliation explains the differences between the balance per bank statement and cash expected to be on hand according to the cash forecast.

1. When preparing bank reconciliation, the outstanding checks will be deducted from the balance per the bank statement.

1. When preparing bank reconciliation, the deposits in transit will be added to the balance per the depositor’s records.

1. An NSF check returned by the bank should be entered in the depositor’s accounting records by a debit to Accounts Payable.

1. Financial assets include cash, investments in securities and Inventories.

1. The Allowance for Impairment represents the difference between the face value of accounts receivable and the estimated collectible amount of accounts receivable.

1. Impairment Loss of Receivable is an estimate of uncollectible accounts and is an expense on the Income Statement.

1. To “write-off” an account receivable is to reduce the balance of the customer’s account to zero when an account is determined to be uncollectible.

1. To capitalise an expenditure means charging it to an asset account.

1. Charging an expenditure directly to an expense account is based on the assumption that the benefits of that expenditure have been used up in the current period.

1. It is an acceptable accounting practice to treat an expenditure that is not material in dollar amount as an expense of the current period even though the expenditure may benefit several periods.

1. Book value represents the market value of an asset.

1. The term PPE assets refer to long-lived assets acquired for use in business operations in multiple periods.

1. A liability that is known to exist but the precise dollar amount is not known is called a possible liability.

1. A contingent liability is recorded in the accounting records when it is probable that a loss has been incurred even the amount of the loss cannot be estimated.

1. Liabilities that fall due within one year or within the operating cycle are classified as current liabilities.

1. Contingent liabilities stem from past events.

1. Treasury shares are shares issued and are currently owned by shareholders.

1. The purchase of treasury share creates an asset for the corporation.

1. A corporation continues in existence even if a shareholder dies or withdraws from the organisation.

1. Outstanding shares are issued shares that are owned by shareholders.

1. The purchase of treasury share for cash causes no change in total assets.

1. When par value share is issued, share capital is credited with the par value of the shares issued, regardless of whether the issuance price is equal to par, more than par, or less than par.

1. Preference shareholders are owners of the corporation and have rights to receive the same dividends as the ordinary shareholders.

1. Preference shares have priority over ordinary shares in dividend distributions and distribution of assets in liquidation.

1. For cumulative preference shares, dividends in arrears must be paid before dividends may be paid on ordinary shares.

1. Preference shareholders generally have the same voting rights as ordinary shareholders in a corporation do.

1. Dividends paid belong in the operating section of the statement of cash flows.

1. The purchase of equipment for the manufacturing of inventory belongs in the operating section of the statement of cash flows.

1. All cash receipts and cash payments not classified as investing or financing activities are classified as indirect activities.

1. The indirect method of computing net cash from operating activities convert accrual-based income statement amounts into cash flows.

1. Under the indirect method, when machinery is sold at a gain, the gain is added in the operating section of the statement of cash flows.

1. Comparative financial statements show side-by-side financial data for two or more companies.

1. The gross profit rate is gross profit expressed as a percentage of net sales.

1. The trend in ratios is usually more useful than looking at a single year’s ratio.

1. Working capital is the excess of current assets over current liabilities.

1. Inventory is an example of a quick asset.

1. The lower the current ratio, the more liquid the company appears.

1. The acid test ratio is generally lower than the current ratio because inventory is not regarded as quick asset.

1. From a creditor’s point of view, the lower the debt ratio; the safer the creditor’s position.