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In distinguishing between sales and collateralized borrowings using receivables, the critical issue A) is whether the terms regarding the transfer were initiated by the transferor or transferee.
B) is whether the transferor surrenders control over the receivables.
C) comes down to how clearly the rights, etc. being retained are specified in the transfer agreement.
D) is whether any gain or loss related to the transfer is recognized in earnings.14.Reasons why companies might accelerate cash collections include the following except: A. B. Generally accepted accounting principles permit "off-balance sheet" treatment of factored receivables and collateralized borrowings, thus enabling management to "window dress" the company's financial position.C. D. A) The company may have an immediate need for cash but be short of it.
B) Generally accepted accounting principles permit "off-balance sheet" treatment of factored receivables and collateralized borrowings, thus enabling management to "window dress" the company's financial position. C) There may be an imbalance between the credit terms of the company's suppliers and the time required to collect customer receivables. D) Competitive conditions require credit sales but the company is unwilling to bear the cost of processing and collecting receivables.15.Manufacturing costs not considered to be closely associated with production are called A) period costs. B) product costs. C) absorption costs. D) variable costs.16.The carrying cost of inventory should include all of the following costs except A) purchase costs. B) sales taxes and transportation costs paid by the purchaser. C) general administrative costs associated with the purchase of inventory. D) insurance and storage costs.17.When a company uses absorption costing A) only fixed costs are inventoried. B) only variable costs are inventoried. C) all production costs are inventoried. D) fixed costs are expensed as incurred.18.The mechanics of absorption costing can lead to year-to-year income changes A) whenever inventory levels remain fairly constant. B) if the productivity of factory workers improves. C) whenever production and sales are not parallel. D) when raw material prices are increasing.19.The input cost changes that occur after the purchase of inventory items in a current cost accounting system are recognized as A) realized gains and losses. B) unrealized holding gains and losses. C) extraordinary gains and losses. D) costs of goods sold.20.The conversion of a LIFO inventory to approximate the inventory at FIFO is accomplished through application of which one of the following formulas? …show more content…
A) FIFO inventory = LIFO inventory X LIFO reserve
B) FIFO inventory = LIFO inventory/LIFO reserve
C) FIFO inventory = LIFO inventory - LIFO reserve
D) FIFO inventory = LIFO inventory + LIFO reserve21.The Xano Company reported merchandise inventory at LIFO of $450,000 on the year-end financial statements. The company also reported a LIFO reserve of $34,000. An estimate of the inventory balance if the inventory had been reported using the FIFO assumption is A) $382,000.
B) $416,000.
C) $461,000.
D) $484,000.22.As a firm liquidates old LIFO layers of inventory, the lower costs of the LIFO layers are matched against current sales dollars resulting in a profit margin that is A) inflated.
B) deflated.
C) lower than normal.
D) always the same as under FIFO.23.When the income effect of a LIFO liquidation is material, the SEC requires that the 10-K report disclose A) the dollar impact of LIFO liquidation on both a before- and after-tax basis.
B) the dollar impact of LIFO liquidation on the year-end inventory balance.
C) this fact following a prescribed format. D) the dollar impact of LIFO liquidation on net income.24.Firms that use FIFO inventory cost assumptions always include some realized holding gains in reported income in periods of A) level prices. B) deflation. C) falling prices. D) rising prices.25.TAD, Inc. uses the lower of cost or market method to value inventory. If the inventory value is replacement cost, which one of the following statements is true? A) Historical cost is less than replacement cost. B) Replacement cost is greater than net realizable value less a normal profit margin. C) Replacement cost is greater than historical cost. D) Net realizable value is greater than historical cost.26.When applying the lower of cost or market method, market value cannot exceed the A) floor. B) net realizable value. C) net realizable value less a normal profit margin. D) replacement cost.27.The dominant method under GAAP for measuring long-lived assets is the A) expected benefit approach. B) discounted present value approach. C) historical cost approach. D) replacement cost approach28.Which one of the
B) is whether the transferor surrenders control over the receivables.
C) comes down to how clearly the rights, etc. being retained are specified in the transfer agreement.
D) is whether any gain or loss related to the transfer is recognized in earnings.14.Reasons why companies might accelerate cash collections include the following except: A. B. Generally accepted accounting principles permit "off-balance sheet" treatment of factored receivables and collateralized borrowings, thus enabling management to "window dress" the company's financial position.C. D. A) The company may have an immediate need for cash but be short of it.
B) Generally accepted accounting principles permit "off-balance sheet" treatment of factored receivables and collateralized borrowings, thus enabling management to "window dress" the company's financial position. C) There may be an imbalance between the credit terms of the company's suppliers and the time required to collect customer receivables. D) Competitive conditions require credit sales but the company is unwilling to bear the cost of processing and collecting receivables.15.Manufacturing costs not considered to be closely associated with production are called A) period costs. B) product costs. C) absorption costs. D) variable costs.16.The carrying cost of inventory should include all of the following costs except A) purchase costs. B) sales taxes and transportation costs paid by the purchaser. C) general administrative costs associated with the purchase of inventory. D) insurance and storage costs.17.When a company uses absorption costing A) only fixed costs are inventoried. B) only variable costs are inventoried. C) all production costs are inventoried. D) fixed costs are expensed as incurred.18.The mechanics of absorption costing can lead to year-to-year income changes A) whenever inventory levels remain fairly constant. B) if the productivity of factory workers improves. C) whenever production and sales are not parallel. D) when raw material prices are increasing.19.The input cost changes that occur after the purchase of inventory items in a current cost accounting system are recognized as A) realized gains and losses. B) unrealized holding gains and losses. C) extraordinary gains and losses. D) costs of goods sold.20.The conversion of a LIFO inventory to approximate the inventory at FIFO is accomplished through application of which one of the following formulas? …show more content…
A) FIFO inventory = LIFO inventory X LIFO reserve
B) FIFO inventory = LIFO inventory/LIFO reserve
C) FIFO inventory = LIFO inventory - LIFO reserve
D) FIFO inventory = LIFO inventory + LIFO reserve21.The Xano Company reported merchandise inventory at LIFO of $450,000 on the year-end financial statements. The company also reported a LIFO reserve of $34,000. An estimate of the inventory balance if the inventory had been reported using the FIFO assumption is A) $382,000.
B) $416,000.
C) $461,000.
D) $484,000.22.As a firm liquidates old LIFO layers of inventory, the lower costs of the LIFO layers are matched against current sales dollars resulting in a profit margin that is A) inflated.
B) deflated.
C) lower than normal.
D) always the same as under FIFO.23.When the income effect of a LIFO liquidation is material, the SEC requires that the 10-K report disclose A) the dollar impact of LIFO liquidation on both a before- and after-tax basis.
B) the dollar impact of LIFO liquidation on the year-end inventory balance.
C) this fact following a prescribed format. D) the dollar impact of LIFO liquidation on net income.24.Firms that use FIFO inventory cost assumptions always include some realized holding gains in reported income in periods of A) level prices. B) deflation. C) falling prices. D) rising prices.25.TAD, Inc. uses the lower of cost or market method to value inventory. If the inventory value is replacement cost, which one of the following statements is true? A) Historical cost is less than replacement cost. B) Replacement cost is greater than net realizable value less a normal profit margin. C) Replacement cost is greater than historical cost. D) Net realizable value is greater than historical cost.26.When applying the lower of cost or market method, market value cannot exceed the A) floor. B) net realizable value. C) net realizable value less a normal profit margin. D) replacement cost.27.The dominant method under GAAP for measuring long-lived assets is the A) expected benefit approach. B) discounted present value approach. C) historical cost approach. D) replacement cost approach28.Which one of the