1. Management must confront which of the following considerations when accounting for inventory:
Select one: a. Costing (valuation) method. b. Inventory system (perpetual or periodic). c. Items to be included and their cost. d. Use of lower of cost or market or other estimate. e. All of these.
2. Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is:
Select one:
a. Accounts Receivable - P. Best.... 3,000
Allowance for Doubtful Accounts... 3,000
Cash.... 3,000
Accounts Receivable - P. Best.... 3,000b. Cash....3,000
Bad Debts Expense.....3,000c. Accounts Receivable - P. Best.... 3,000
Bad Debts Expense... 3,000
Cash.... 3,000
Accounts Receivable - P. Best.... 3,000d. Allowance for Doubtful Accounts....3,000
Accounts Receivable - P. Best.... 3,000
Cash.... 3,000e. Cash.... 3,000
Accounts Receivable - P. Best ....3,000
3. Accounts receivable information for specific customers is important because it reveals:
Select one: a. How much each customer has purchased on credit. b. How much each customer has paid. c. How much each customer still owes. d. The basis for sending bills to customers. e. All of these.