Multiple Choice Answers

Allowance for Doubtful Accounts has an unadjusted balance of $400 at the end of the year, and uncollectible accounts expense is estimated at 1% of net sales. If net sales are $300,000, the amount of the adjustment to record the provision for doubtful accounts is:

a. $3,000
b. $3,400
c. $400
d. $2,600

The recording of the jobs completed would decrease:

a. Factory Overhead
b. Finished Goods
c. Work in Process
d. Cost of Goods Sold

Which of the following manufacturing costs is an indirect cost of producing a product?

a. Oil lubricants used for factory machinery
b. Commissions for sales personnel
c. Hourly wages of an assembly worker
d. Memory chips for a microcomputer manufacturer

Based on the following data for the current year, what is the inventory turnover?
Net sales on account during year $1,000,000
Cost of merchandise sold during year 600,000
Accounts receivable, beginning of year 45,000
Accounts receivable, end of year 35,000
Inventory, beginning of year 90,000
Inventory, end of year 110,000

a. 6.0
b. 8.0
c. 16.0
d. 7.6

The effect on the accounts and the financial statements of the payment of an ordinary note is a(n):

a. decrease in Notes Payable, an increase in Interest Receivable, and a decrease in Cash
b. decrease in Notes Payable, an increase in Interest Expense, and a decrease in Cash
c. decrease in Accounts Payable and a decrease in Cash
d. increase in Cash and an increase in Notes Payable