June 12

P. Mathia
BAT4M
Exam Review
Name _________________________

1. Service revenue minus oeratin! exenses e"ua#s !ross ro$it.
a. True %. &a#se
2. The stes in the accountin! c'c#e are (i$$erent $or a merchan(isin!
coman' than $or a service enterrise.
a. True %. &a#se
). The cost o$ !oo(s so#( (urin! a erio( is a#wa's e"ua# to the
cash ai( $or urchases (urin! the same erio(.
a. True %. &a#se
4. *ross ro$it is a measure o$ the overa## ro$ita%i#it' o$ a coman'.
a. True %. &a#se
+. A eretua# inventor' s'stem re"uires a h'sica# inventor' count to
(etermine the cost o$ !oo(s so#(.
a. True %. &a#se
,. The matchin! rinci#e a#ies to merchan(isin! comanies %'
reco!ni-in! the cost o$ !oo(s when the' are so#(.
a. True %. &a#se
.. A eretua# inventor' s'stem resu#ts in a summari-e( inventor'
recor( o$ inventor' items an( is on#' u(ate( at 'ear en(.
a. True %. &a#se
/. *ain on sa#e o$ e"uiment an( interest exense are reorte( un(er
other revenues an( !ains in a mu#ti#e0ste income statement.
a. True %. &a#se
1. *ST is a sin!#e0sta!e tax co##ecte( $rom $ina# consumers on !oo(s
an( services.
a. True %. &a#se
12. 3n a wor4 sheet5 %e!innin! merchan(ise inventor' wi## %e shown in
the tria# %a#ance 67r.85 a(9uste( tria# %a#ance 67r.8 an( income
statement 67r.8 co#umns.
a. True %. &a#se
11. *oo(s that have %een urchase( &:B (estination %ut are in transit5
shou#( %e exc#u(e( $rom a h'sica# count o$ !oo(s %' the se##er.
a. True %. &a#se
12. 3$ a coman' uses the &3&: cost assumtion5 the cost o$ !oo(s so#(
$or the erio( wi## %e the same un(er a eretua# or erio(ic
inventor' s'stem.
a. True %. &a#se
Exam Review00Pa!e 2
1). ;n(er a erio(ic inventor' s'stem5 $rei!ht in on merchan(ise
urchase( shou#( %e (e%ite( to Merchan(ise 3nventor'.
a. True %. &a#se
14. Merchan(ise inventor' consists o$ !oo(s that are rea(' to %e so#( to
customers.
a. True %. &a#se
1+. The %a#ance in the Merchan(ise 3nventor' account5 when usin! a
erio(ic inventor' s'stem5 re"uires two c#osin! entries.
a. True %. &a#se
1,. 3$ a coman' chan!es its inventor' va#uation metho(5 the e$$ect o$
the chan!e on net income shou#( %e (isc#ose( in the $inancia#
statements.
a. True %. &a#se
1.. A coman' ma' use more than one inventor' costin! metho(
concurrent#'.
a. True %. &a#se
1/. Net Purchases is (etermine( %' su%tractin! urchase returns an(
a##owances $rom tota# urchases.
a. True %. &a#se
11. ;n(er a eretua# inventor' s'stem5 the cost o$ !oo(s so#( an(
en(in! inventor' are continuous#' u(ate(.
a. True %. &a#se
22. ;se o$ the <3&: inventor' va#uation metho( is not ermitte( $or
income tax uroses.
a. True %. &a#se
21. =he"ues receive( in the mai# shou#( %e imme(iate#' stame( >NS&> to
revent unauthori-e( cashin! o$ the che"ues.
a. True %. &a#se
22. A (eosit tic4et is a ne!otia%#e instrument that can %e trans$erre(
to another art' %' en(orsement.
a. True %. &a#se
2). &or e$$icienc' o$ oerations an( %etter contro# over cash5 a coman'
shou#( maintain on#' one %an4 account.
a. True %. &a#se
24. 3nterna# contro# is main#' concerne( with the amount o$ authorit' a
suervisor exercises over a su%or(inate.
a. True %. &a#se
2+. =ash re!isters are an imortant interna# contro# (evice use( in
contro##in! over0the0counter receits.
a. True %. &a#se
Exam Review00Pa!e )
2,. The ett' cash $un( e#iminates the nee( $or a %an4 che"uin! account.
a. True %. &a#se
2.. =ash re!ister overa!es are (eosite( in the ett' cash $un( an( cash
shorta!es are ma(e0u $rom the ett' cash $un(.
a. True %. &a#se
2/. :n#' #ar!e comanies nee( to %e concerne( with a s'stem o$ interna#
contro#.
a. True %. &a#se
21. The resonsi%i#it' $or or(erin!5 receivin!5 an( a'in! $or
merchan(ise shou#( %e assi!ne( to (i$$erent in(ivi(ua#s.
a. True %. &a#se
)2. The custo(ian o$ the ett' cash $un( has the authorit' to ma4e an'
a'ments $rom the $un(5 re!ar(#ess o$ whether or not the
(is%ursements con$orm to rescri%e( mana!ement o#icies.
a. True %. &a#se
)1. The two 4e' arties to a note are the ma4er an( the a'ee.
a. True %. &a#se
)2. A note receiva%#e is a written romise %' the ma4er to the a'ee to
a' a seci$ie( amount o$ mone' at a (e$inite time.
a. True %. &a#se
)). Accounts receiva%#e are the resu#t o$ cash an( cre(it sa#es.
a. True %. &a#se
)4. 3$ a coman' uses the a##owance metho( to account $or unco##ecti%#e
accounts5 the entr' to write o$$ an unco##ecti%#e account on#'
invo#ves %a#ance sheet accounts.
a. True %. &a#se
)+. ;n(er the a##owance metho(5 the net rea#i-a%#e va#ue o$ receiva%#es
is the same %oth %e$ore an( a$ter an account has %een written o$$.
a. True %. &a#se
),. A $actor urchases receiva%#es $rom %usinesses $or a $ee an( ma'
co##ect the remittances (irect#' $rom customers.
a. True %. &a#se
).. An a!ein! sche(u#e is reare( on#' $or o#( accounts receiva%#es
that have %een ast (ue $or more than one 'ear.
a. True %. &a#se
)/. Both accounts receiva%#e an( notes receiva%#e reresent c#aims that
are execte( to %e co##ecte( in cash.
a. True %. &a#se
)1. A##owance $or 7ou%t$u# Accounts is a contra asset account.
a. True %. &a#se
Exam Review00Pa!e 4
42. Receiva%#es are va#ue( an( reorte( in the %a#ance sheet at their
!ross amount #ess an' sa#es returns an( a##owances.
a. True %. &a#se
41. Two cate!ories o$ exenses in merchan(isin! comanies are
a. cost o$ !oo(s so#( an( $inancin! exenses.
%. oeratin! exenses an( $inancin! exenses.
c. cost o$ !oo(s so#( an( oeratin! exenses.
(. sa#es an( cost o$ !oo(s so#(.
42. A h'sica# inventor' shou#( %e ta4en
a. a$ter ever' urchase o$ merchan(ise.
%. a$ter ever' sa#e.
c. at or near the %a#ance sheet (ate.
(. on#' i$ a manua# accountin! s'stem is use(.
4). 3n rearin! c#osin! entries $or a merchan(isin! coman'5 the
:wner?s =aita# account wi## %e (e%ite( $or the %a#ance o$ the
a. Sa#es Revenue account.
%. =ost o$ *oo(s So#( account.
c. En(in! 3nventor' account.
(. =ash account.
44. 3$ a @)22 sa#es return an( a##owance 6#us @21 *ST an( @24 PST8 is
!rante(5 the se##er?s entr' to recor( the cre(it memoran(um wi##
re"uire the $o##owin! entr'A
a. Sa#es Returns an( A##owances ............ )22
*ST Pa'a%#e ............................. 21
PST Pa'a%#e ............................. 24
Accounts Receiva%#e .................. )4+

%. Sa#es ................................... )4+
Accounts Receiva%#e .................. )4+

c. Sa#es Returns an( A##owances ............ )22
Accounts Receiva%#e .................. )22

(. Sa#es Returns an( A##owances ............ )4+
*ST Pa'a%#e .......................... 21
PST Pa'a%#e .......................... 24
Accounts Receiva%#e .................. )22
4+. 3$ a urchaser returns !oo(s urchase( on account to the su#ier
un(er a eretua# inventor' s'stem5 the urchaser wou#( (e%it
a. =ost o$ *oo(s So#(.
%. Accounts Pa'a%#e.
c. 3nventor'.
(. Purchase Returns.
Exam Review00Pa!e +
4,. 3$ a coman' (etermines cost o$ !oo(s so#( each time a sa#e occurs5
it
a. must have a comuter accountin! s'stem.
%. uses a com%ination o$ the eretua# an( erio(ic inventor'
s'stems.
c. uses a erio(ic inventor' s'stem.
(. uses a eretua# inventor' s'stem.
4.. :n a c#assi$ie( %a#ance sheet5 merchan(ise inventor' is c#assi$ie(
as a
a. current #ia%i#it'.
%. caita# asset.
c. current asset.
(. #on!0term investment.
4/. 3$ Sara9evo?s Bi(eo Store?s accountin! recor(s show5 usin! a
eretua# inventor' s'stem5 an en(in! inventor' %a#ance o$ @2+5222
an( a h'sica# count shows a %a#ance o$ @2)52225 it is imortant to
a. (e%it 'our inventor' recor(s.
%. urchase a((itiona# inventor'.
c. remove the nonexistent inventor' $rom 'our recor(s.
(. cre(it =ost o$ *oo(s So#(.
41. A "uantit' (iscount is
a. an incentive $or customers to a' "uic4#'.
%. recor(e( as a contra revenue account.
c. consi(ere( to %e a sa#es a##owance.
(. a cash savin!s to the urchaser.
+2. The entr' $or a retai# store5 usin! a eretua# inventor' s'stem5 to
recor( @)22 o$ inventor' returne( 6inc#u(in! PST85 #us @21 *ST is
a. Accounts Receiva%#e ..................... )21
*ST Recovera%#e ...................... 21
Merchan(ise 3nventor' ................ )22

%. Accounts Pa'a%#e ........................ )21
Merchan(ise 3nventor' ................ )21

c. Accounts Pa'a%#e ........................ )21
*ST Recovera%#e ...................... 21
Merchan(ise 3nventor' ................ )22

(. Accounts Pa'a%#e ........................ )21
*ST Recovera%#e ...................... 21
Sa#es Returns an( A##owances ......... )22
Exam Review00Pa!e ,
+1. &or a merchan(isin! coman'5 the net rea#i-a%#e va#ue o$ its
inventor' is
a. the ori!ina# cost o$ the inventor'.
%. the current se##in! rice.
c. the current se##in! rice #ess an' costs re"uire( to ma4e the
!oo(s rea(' $or sa#e.
(. the ori!ina# cost o$ the inventor' #ess an' costs re"uire( to
ma4e the !oo(s rea(' $or sa#e.
+2. Two comanies reort the same cost o$ !oo(s avai#a%#e $or sa#e %ut
each em#o's a (i$$erent inventor' costin! metho(. 3$ the rice o$
!oo(s has increase( (urin! the erio(5 then the coman' usin!
a. <3&: wi## have the hi!hest en(in! inventor'.
%. &3&: wi## have the hi!hest cost o$ !oo( so#(.
c. &3&: wi## have the hi!hest en(in! inventor'.
(. <3&: wi## have the #owest cost o$ !oo(s so#(.
+). Se#ection o$ an inventor' costin! metho( %' mana!ement (oes not
usua##' (een( on
a. the $isca# 'ear0en(.
%. income statement e$$ects.
c. %a#ance sheet e$$ects.
(. tax e$$ects.
+4. The seci$ic i(enti$ication metho( o$ costin! inventories is use(
when the
a. h'sica# $#ow o$ units cannot %e (etermine(.
%. coman' se##s #ar!e "uantities o$ re#ative#' #ow cost homo!eneous
items.
c. coman' se##s #ar!e "uantities o$ re#ative#' #ow cost
hetero!eneous items.
(. coman' se##s a #imite( "uantit' o$ hi!h0unit cost items.
++. The #east conservative va#uation o$ inventories on the %a#ance sheet
is o%taine( %' a#'in! the #ower o$ cost an( mar4et %asis to
a. the avera!e inventor'.
%. tota# inventor'.
c. ma9or inventor' cate!ories.
(. in(ivi(ua# inventor' items.
+,. A coman' has !oo(s avai#a%#e $or sa#e (urin! a erio( at cost an(
at retai# o$ @125222 an( @1+252225 resective#'. 3$ sa#es (urin! the
erio( amounte( to @12252225 an estimate o$ the en(in! inventor' at
cost at the en( o$ the erio( un(er the retai# metho( is
a. @4/5222.
%. @.25222.
c. @1/5222.
(. @)25222.
Exam Review00Pa!e .
+.. 3nventoria%#e costs ma' %e thou!ht o$ as a oo# o$ costs consistin!
o$ which two e#ementsC
a. The cost o$ %e!innin! inventor' an( the cost o$ en(in! inventor'
%. The cost o$ en(in! inventor' an( the cost o$ !oo(s urchase(
(urin! the 'ear
c. The cost o$ %e!innin! inventor' an( the cost o$ !oo(s urchase(
(urin! the 'ear
(. The (i$$erence %etween the costs o$ !oo(s urchase( an( the cost
o$ !oo(s so#( (urin! the 'ear
+/. The cost o$ !oo(s avai#a%#e $or sa#e is a##ocate( %etween
a. %e!innin! inventor' an( en(in! inventor'.
%. %e!innin! inventor' an( cost o$ !oo(s on han(.
c. en(in! inventor' an( cost o$ !oo(s so#(.
(. %e!innin! inventor' an( cost o$ !oo(s urchase(.
+1. The most common ractice in a#'in! the #ower o$ cost an( mar4et to
inventor' va#uation is to use
a. avera!e inventories.
%. ma9or cate!ories o$ inventor'.
c. in(ivi(ua# inventor' items.
(. tota# inventories.
,2. The #ower o$ cost an( mar4et %asis o$ va#uin! inventories is an
exam#e o$
a. comara%i#it'.
%. the cost rinci#e.
c. conservatism.
(. consistenc'.
,1. The use o$ remittance a(vices $or mai# receits is an exam#e o$
a. (ocumentation roce(ures.
%. other contro#s.
c. h'sica# contro#s.
(. in(een(ent interna# veri$ication.
,2. A che"ue returne( %' the %an4 mar4e( >NS&> means
a. no service $ee.
%. no si!nature $oun(.
c. not satis$actori#' $i##e( out.
(. not su$$icient $un(s.
,). A ett' cash $un( shou#( %e re#enishe(
a. ever' (a'.
%. at the en( o$ ever' accountin! erio(.
c. once a 'ear.
(. as soon as an exense is ai( $rom the $un(.
,4. Dhen reortin! cash5 man' comanies com%ine cash with
a. short0term investments.
%. %an4 over(ra$ts.
c. caita# assets.
(. accounts receiva%#e.
Exam Review00Pa!e /
,+. Proer contro# $or over0the0counter cash receits inc#u(es
a. a cash re!ister with tota#s visi%#e to the customer.
%. usin! e#ectronic cash re!isters with no taes.
c. cash count sheets re"uirin! on#' the suervisor?s si!nature.
(. cash count sheets re"uirin! on#' the cashier?s si!nature.
,,. Dhich one o$ the $o##owin! is not an o%9ective o$ a s'stem o$
interna# contro#sC
a. Sa$e!uar( coman' assets
%. :verstate #ia%i#ities in or(er to %e conservative
c. Enhance the accurac' an( re#ia%i#it' o$ accountin! recor(s
(. Re(uce the ris4s o$ errors
,.. An a(9ustin! entr' is not re"uire( $or
a. outstan(in! che"ues.
%. co##ection o$ a note %' the %an4.
c. NS& che"ues.
(. %an4 service char!es.
,/. An excetion to (is%ursements %ein! ma(e %' che"ue is acceta%#e
when cash is ai(
a. to an owner.
%. to em#o'ees as wa!es.
c. $rom ett' cash.
(. to em#o'ees as #oans.
,1. Ban4 errors
a. occur %ecause o$ time #a!s.
%. must %e correcte( %' (e%its.
c. are in$re"uent in occurrence.
(. are correcte( %' ma4in! an a(9ustin! entr' on the (eositor?s
%oo4s.
.2. =ontro# over cash (is%ursements is !enera##' more e$$ective when
a. a## %i##s are ai( in cash.
%. (is%ursements are ma(e %' the accounts a'a%#e su%si(iar' c#er4.
c. a'ments are ma(e %' che"ue.
(. a## urchases are ma(e on cre(it.
.1. The sa#e o$ receiva%#es %' a %usiness
a. in(icates that the %usiness is in $inancia# (i$$icu#t'.
%. is !enera##' the ma9or revenue item on its income statement.
c. is an in(ication that the %usiness is owne( %' a $inance coman'.
(. can %e a "uic4 wa' to !enerate cash $or oeratin! nee(s.
.2. Retai#ers o$ten a(( a $inancin! char!e to a customer?s accounts
receiva%#e %a#ance
a. i$ the customer $ai#s to urchase a((itiona# merchan(ise.
%. i$ the customer a's more than the re"uire( amount.
c. i$ the account is not ai( within a reasona%#e erio( o$ time.
(. i$ the account is not ai( within $ive (a's.
Exam Review00Pa!e 1
.). The $ace va#ue o$ a note re$ers to the amount
a. that can %e receive( i$ so#( to a thir( art'.
%. %orrowe( #us interest receive( at maturit' $rom the ma4er.
c. that is i(enti$ie( on the $orma# instrument o$ cre(it.
(. remainin! a$ter a $inance char!e has %een (e(ucte(.
.4. A## o$ the $o##owin! arties are invo#ve( when cre(it car(s are use(
to ma4e a retai# sa#e excet
a. an in(een(ent cre(it car( issuer.
%. the retai#er.
c. the customer?s %an4.
(. the customer.
.+. The ercenta!e o$ sa#es %asis o$ estimatin! execte( unco##ecti%#es
a. emhasi-es the matchin! o$ exenses with revenues.
%. emhasi-es %a#ance sheet re#ationshis.
c. emhasi-es net rea#i-a%#e va#ue.
(. is not !enera##' accete( as a %asis $or estimatin! %a( (e%ts.
.,. 3$ a (eartment store $ai#s to ma4e the entr' to accrue the $inance
char!es (ue $rom customers5
a. accounts receiva%#e wi## %e overstate(.
%. interest revenue wi## %e un(erstate(.
c. interest exense wi## %e overstate(.
(. interest exense wi## %e un(erstate(.
... The (i$$erence %etween a (e%it car( an( a cre(it car( is that a
(e%it car(
a. a##ows customers to sen( on#' what is in their %an4 account.
%. is use( on#' $or the urchase o$ services.
c. is use( ver' in$re"uent#' in =ana(a.
(. is a car( on#' issue( %' (eartment stores.
./. Dhich o$ the $o##owin! wou#( re"uire a comoun( 9ourna# entr'C
a. To recor( merchan(ise returne( that was revious#' urchase( on
account in a eretua# inventor' s'stem.
%. To recor( sa#es o$ merchan(ise on account.
c. To recor( cash urchases o$ inventor'.
(. To recor( co##ection o$ accounts receiva%#e.
.1. 3$ a coman' $ai#s to recor( estimate( %a( (e%ts exense5
a. net rea#i-a%#e va#ue is un(erstate(.
%. exenses are un(erstate(.
c. revenues are un(erstate(.
(. receiva%#es are un(erstate(.
/2. 3$ an account is co##ecte( a$ter havin! %een revious#' written o$$5
a. the a##owance account shou#( %e (e%ite(.
%. on#' the contro# account nee(s to %e cre(ite(.
c. %oth income statement an( %a#ance sheet accounts wi## %e
a$$ecte(.
(. there wi## %e %oth a (e%it an( a cre(it to accounts receiva%#e.
Exam Review00Pa!e 12
/1. :n Setem%er 15 Stanton Su#' ha( an inventor' o$ 1+ %ac4 ac4s at
a cost o$ @22 each. The coman' uses a eretua# inventor' s'stem.
7urin! Setem%er5 the $o##owin! transactions an( events occurre(.

Set. ) Purchase( 42 %ac4 ac4s at @22 each $rom Jan-en. Receive(
a 12E vo#ume (iscount.

Set. , Receive( cre(it o$ @.2 $or the return o$ 4 %ac4 ac4s
urchase( on Set. ) that were (e$ective.

Set. . Pai( $or the Setem%er ) urchase.

Set. 1 So#( 22 %ac4 ac4s $or @)2 each to Mc*i## Boo4s.

Set. 1) So#( 1+ %ac4 ac4s $or @)2 each to =a#vin :$$ice Su#'.

Set. 21 Purchase( 2+ %ac4 ac4s at @1/ each $rom =o#eman =oman'.

Set. )2 A h'sica# inventor' count in(icate( an en(in! inventor'
%a#ance o$ @)22.

3NSTR;=T3:NS
Journa#i-e the Setem%er transactions $or Stanton Su#'5 usin! a
eretua# inventor' s'stem.
Exam Review00Pa!e 11
/2. Mc*uire =oman' uses the erio(ic inventor' metho( an( ha( the
$o##owin! inventor' in$ormation avai#a%#eA

;nits ;nit =ost Tota# =ost
FFFFF FFFFFFFFF FFFFFFFFFF
1G1 Be!innin! 3nventor' 122 @4 @ 422
1G22 Purchase 422 @+ 25222
.G2+ Purchase 222 @. 15422
12G22 Purchase )22 @/ 25422
FFFFF FFFFFF
15222 @,5222

A h'sica# count o$ inventor' on 7ecem%er )1 revea#e( that there
were 422 units on han(.

3NSTR;=T3:NS
Answer the $o##owin! in(een(ent "uestions an( show ca#cu#ations
suortin! 'our answers.

1. Assume that the coman' uses the &3&: metho(. The va#ue o$ the
en(in! inventor' at 7ecem%er )1 is @__________.

2. Assume that the coman' uses the Avera!e =ost metho(. The va#ue
o$ the en(in! inventor' on 7ecem%er )1 is @__________.

). Assume that the coman' uses the <3&: metho(. The va#ue o$ the
en(in! inventor' on 7ecem%er )1 is @__________.

4. 7etermine the (i$$erence in the amount o$ income that the coman'
wou#( have reorte( i$ it ha( use( the &3&: metho( instea( o$ the
<3&: metho(. Dou#( income have %een !reater or #essC
Exam Review00Pa!e 12
/). McHni!ht =oman' ha( a @.22 cre(it %a#ance in A##owance $or
7ou%t$u# Accounts at 7ecem%er )15 22225 %e$ore the current 'ear?s
rovision $or unco##ecti%#e accounts. An a!ein! o$ the accounts
receiva%#e revea#e( the $o##owin!A
Estimate( Percenta!e
;nco##ecti%#e
FFFFFFFFFFFFFFFFFFFF
=urrent Accounts @1225222 1E
20)2 (a's ast (ue 125222 )E
)10,2 (a's ast (ue 125222 ,E
,1012 (a's ast (ue +5222 12E
:ver 12 (a's ast (ue /5222 )2E
FFFFFFFF
Tota# Accounts Receiva%#e @1++5222

3NSTR;=T3:NS
6a8 Preare the a(9ustin! entr' on 7ecem%er )15 22225 to reco!ni-e
%a( (e%ts exense.
6%8 Assume the same $acts as a%ove excet that the A##owance $or
7ou%t$u# Accounts account ha( a @+22 (e%it %a#ance %e$ore the
current 'ear?s rovision $or unco##ecti%#e accounts. Preare
the a(9ustin! entr' $or the current 'ear?s rovision $or
unco##ecti%#e accounts.
6c8 Assume that the coman' has a o#ic' o$ rovi(in! $or %a( (e%ts
at the rate o$ 1E o$ Sa#es5 that Sa#es $or 2222 were @,2252225
an( that A##owance $or 7ou%t$u# Accounts ha( a @++2 cre(it
%a#ance %e$ore a(9ustment. Preare the a(9ustin! entr' $or the
current 'ear?s rovision $or %a( (e%ts.
/4. =hrist' =oman' uses the a##owance metho( $or estimatin!
unco##ecti%#e accounts. Preare 9ourna# entries to recor( the
$o##owin! transactionsA

Januar' + So#( merchan(ise to Am' &er!en%aum $or @152225 terms
nG1+.

Ari# 1+ Receive( @222 $rom Am' &er!en%aum on account.

Au!ust 21 Drote o$$ as unco##ecti%#e the %a#ance o$ the Am'
&er!en%aum account when she (ec#are( %an4rutc'.

:cto%er + ;nexecte(#' receive( a che"ue $or @2+2 $rom Am'
&er!en%aum.
Exam Review00Pa!e 1)
/+. Pa#mer Boat =oman' o$ten re"uires customers to si!n romissor'
notes $or ma9or cre(it urchases. Journa#i-e the $o##owin!
transactions $or Pa#mer Boat =oman'.

&e%. 12 Accete( a @2+52225 12E5 20month note $rom Jac4 7haum $or
a 110$oot motor%oat %ui#t to his seci$ications.

Ari# 14 Receive( noti$ication $rom Jac4 7haum that he was una%#e
to honour his romissor' note %ut that he exects to a'
the amount owe( in Ma'.

Ma' 2, Receive( a che"ue $rom Jac4 7haum $or the tota# amount
owe(.

June 12 Receive( noti$ication %' the %an4 that Jac4 7haum?s che"ue
was %ein! returne( >NS&> an( that Mr. 7haum ha( (ec#are(
ersona# %an4rutc'.
Exam Review00Pa!e 14 June 12
ANSDER HEI
P. Mathia BAT4M
J0000000J000000J00000000J000000J00000000J00000000J00000000J00000000J000000J
K Text K Ban4 K Exam K K K Lues K 7i$$ K St(' K K
K=haterK Re$ KLuestionKAnswerK T'e K Tax K <v# K :%9 K Min. K
J0000000J000000J00000000J000000J00000000J00000000J00000000J00000000J000000J
K + ) 1 % TG& H 1 K
K + 2 2 % TG& = 1 K
K + 4 ) % TG& = 2 K
K + 2) 4 % TG& H , K
K + / + % TG& = 2 K
K + , , a TG& = 2 K
K + 1) . % TG& H 4 K
K + 1. / % TG& = + K
K + )1 1 % TG& H / K
K + )) 12 a TG& = 1 K
K , 4 11 % TG& H 1 K
K , ). 12 a TG& = 1 K
K , 12 1) % TG& H 2 K
K , + 14 a TG& = 1 K
K , 22 1+ a TG& H 4 K
K , ), 1, a TG& H , K
K , )4 1. a TG& = , K
K , 1, 1/ a TG& = ) K
K , ) 11 a TG& H 1 K
K , )+ 22 a TG& H , K
K / 1. 21 % TG& = ) K
K / 24 22 % TG& H , K
K / 1+ 2) % TG& = ) K
K / 1 24 % TG& H 1 K
K / 1, 2+ a TG& H ) K
K / 22 2, % TG& = + K
K / 2) 2. % TG& = + K
K / 12 2/ % TG& = 2 K
K / 11 21 a TG& = 2 K
K / 21 )2 % TG& H + K
K 1 2. )1 a TG& H + K
K 1 2+ )2 a TG& H + K
K 1 , )) % TG& H 2 K
K 1 / )4 a TG& = ) K
K 1 1, )+ a TG& = ) K
K 1 21 ), a TG& H 4 K
K 1 1/ ). % TG& H ) K
K 1 ) )/ a TG& = 1 K
K 1 12 )1 a TG& H ) K
K 1 4 42 % TG& H 2 K
K + )1 41 c M=hoice H 1 K
K + /) 42 c M=hoice = 4 K
K + 124 4) % M=hoice = 4 K
K + 114 44 a M=hoice A / K
K + .1 4+ % M=hoice H ) K
K + ,1 4, ( M=hoice = 2 K
K + 12, 4. c M=hoice H + K
K + +2 4/ c M=hoice A 2 K
J0000000000000000000000000000000000000000000000000000000000000000000000000J
Exam Review00Pa!e 1+ June 12
J0000000J000000J00000000J000000J00000000J00000000J00000000J00000000J000000J
K Text K Ban4 K Exam K K K Lues K 7i$$ K St(' K K
K=haterK Re$ KLuestionKAnswerK T'e K Tax K <v# K :%9 K Min. K
J0000000J000000J00000000J000000J00000000J00000000J00000000J00000000J000000J
K + .+ 41 ( M=hoice H ) K
K + 11, +2 c M=hoice A / K
K , 112 +1 c M=hoice H / K
K , 12 +2 c M=hoice = , K
K , 11 +) a M=hoice H , K
K , 1+ +4 ( M=hoice H + K
K , 124 ++ % M=hoice H / K
K , 112 +, c M=hoice A 12 K
K , ,1 +. c M=hoice H ) K
K , .1 +/ c M=hoice H ) K
K , 12/ +1 ( M=hoice H / K
K , 12+ ,2 c M=hoice H / K
K / ,2 ,1 a M=hoice H ) K
K / /+ ,2 ( M=hoice H , K
K / .4 ,) % M=hoice H + K
K / 12, ,4 a M=hoice H / K
K / +1 ,+ a M=hoice H ) K
K / )1 ,, % M=hoice H 1 K
K / 122 ,. a M=hoice = . K
K / ,4 ,/ c M=hoice = + K
K / 11 ,1 c M=hoice H . K
K / ,) .2 c M=hoice = 4 K
K 1 .1 .1 ( M=hoice H 4 K
K 1 42 .2 c M=hoice = 2 K
K 1 1/ .) c M=hoice H , K
K 1 /2 .4 c M=hoice H 4 K
K 1 ++ .+ a M=hoice H ) K
K 1 4, ., % M=hoice N 2 K
K 1 /1 .. a M=hoice H 4 K
K 1 41 ./ % M=hoice = 2 K
K 1 41 .1 % M=hoice N ) K
K 1 .1 /2 ( M=hoice = ) K
K + 12, /1 Exercise A 2 1+ K
K , 121 /2 Exercise N + 22 K
K 1 11) /) Exercise N ) 22 K
K 1 11. /4 Exercise A ) 12 K
K 1 12+ /+ Exercise A / 1+ K
J0000000000000000000000000000000000000000000000000000000000000000000000000J
Exam Review00Pa!e 1, June 12
/1. 61+ min.8
Set. ) 3nventor' ............................... .22
Accounts Pa'a%#e ...................... .22

Set. , Accounts Pa'a%#e ........................ .2
3nventor' ............................. .2

Set. . Accounts Pa'a%#e ........................ ,4/
=ash .................................. ,4/

Set. 1 Accounts Receiva%#e ..................... ,22
Sa#es ................................. ,22

=ost o$ *oo(s So#( ...................... 422
3nventor' ............................. 422

Set. 1) Accounts Receiva%#e ..................... 4+2
Sa#es ................................. 4+2

=ost o$ *oo(s So#( ...................... )22
3nventor' ............................. )22

Set. 21 3nventor' ............................... 4+2
Accounts Pa'a%#e ...................... 4+2

Set. )2 <oss 7ue to 3nventor' Shorta!e .......... 1/
3nventor' ............................. 1/
Exam Review00Pa!e 1. June 12
/2. 622 min.8
1. &3&:A En(in! inventor' @)5122
)22 units M@/ N @25422
122 units M@. N .22
FFFFFFFFFFFFF FFFFFF
422 units @)5122


2. Avera!e =ostA En(in! inventor' @251.2
@,5222 O 15222 N @,.22 er unit x 422 units N @254/2


). <3&:A En(in! 3nventor' @15122
122 units M@4 N @ 422
)22 units M@+ N 15+22
FFFFFFFFFFFFF FFFFFF
422 units @15122


4. &3&:A =ost o$ !oo(s so#( @)5122
122 units M@4 N @ 422
422 units M@+ N 25222
122 units M@. N .22
FFFFFFFFFFFFF FFFFFF
,22 units @)5122


<3&:A =ost o$ !oo(s so#( @45)22
)22 units M@/ @25422
222 units M@. 15422
122 units M@+ +22
FFFFFFFFFFFFF FFFFFF
,22 units @45)22


3ncome wou#( have %een @15222 6@45)22 vs. @)51228 greater i$ the
coman' use( &3&: instea( o$ <3&:.
/). 622 min.8
6a8 Ba( 7e%ts Exense ............................... 454,2
A##owance $or 7ou%t$u# Accounts 6@+51,2 0 @.228 454,2
To a(9ust the a##owance account to tota#
estimate( unco##ecti%#e.

6%8 Ba( 7e%ts Exense ............................... +5,,2
A##owance $or 7ou%t$u# Accounts 6@+51,2 J @+228 +5,,2
To a(9ust the a##owance account to tota#
estimate( unco##ecti%#e.

6c8 Ba( 7e%ts Exense 6@,225222 x 1E8 ............... ,5222
A##owance $or 7ou%t$u# Accounts ............... ,5222
To recor( estimate( %a( (e%ts $or 'ear.
Exam Review00Pa!e 1/ June 12
/4. 612 min.8
Januar' + Accounts Receiva%#e ...................... 15222
Sa#es .................................. 15222

Ari# 1+ =ash ..................................... 222
Accounts Receiva%#eFFA. &er!en%aum ..... 222

Au!ust 21 A##owance $or 7ou%t$u# Accounts .......... /22
Accounts Receiva%#eFFA. &er!en%aum ..... /22

:cto%er + Accounts Receiva%#eFFA. &er!en%aum ....... 2+2
A##owance $or 7ou%t$u# Accounts ........ 2+2

=ash ..................................... 2+2
Accounts Receiva%#eFFA. &er!en%aum ..... 2+2
/+. 61+ min.8
&e%. 12 Notes Receiva%#e ........................ 2+5222
Sa#es ................................. 2+5222

Ari# 14 Accounts Receiva%#eFFJ. 7haum ........... 2+541.
Notes Receiva%#e ...................... 2+5222
3nterest Revenue ...................... 41.
6@2+5222 x 12E x 2G128

Ma' 2, =ash .................................... 2+541.
Accounts Receiva%#eFFJ. 7haum ......... 2+541.

June 12 Accounts Receiva%#eFFJ. 7haum ........... 2+541.
=ash .................................. 2+541.

A##owance $or 7ou%t$u# Accounts ......... 2+541.
Accounts Receiva%#eFFJ. 7haum ......... 2+541.