156.Which of the following statements is true regarding International Financial Reporting Standards (IFRS) and U.S. GAAP?
a.IFRS allows both the perpetual and periodic systems, but U.S GAAP permits only the perpetual system.
b.IFRS requires a single-step income statement, but U.S. GAAP allows either the
single-step or the multiple-step income statement.
c.U.S. GAAP allows operating expenses to be reported by either function or nature, IFRS requires reporting by function.
d.IFRS requires 2 years of income statements, U.S. GAAP requires 3 years of income statements.
157.Which of the following statements is true regarding the project to rework the structure of financial statements undertaken by the International Accounting Standard Board (IASB) and the Financial Accounting Standards Board (FASB)?
a.The proposed changes to the financial statements would result in considerably more detail than currently seen under IFRS and U.S. GAAP.
b.The proposed structure is meant to draw attention away from net income.
c.The proposed structure will adopt major groupings similar to those currently used by the statement of cash flows (operating, investing, and financial).
d.All of these answer choices are correct.
a158.Sampson Company's accounting records show the following for the year ending December 31, 2014:
Purchase Discounts ? 14,000
Freight-In 19,500
Purchases 500,025
Beginning Inventory 58,750
Ending Inventory 72,000
Purchase Returns 16,000
Using the periodic system, the cost of goods purchased is
a.?450,525.
b.?510,525.
c.?521,525.
d.?489,525.
a159.Sampson Company's accounting records show the following for the year ending December 31, 2014:
Purchase Discounts ? 14,000
Freight - In 19,500
Purchases 500,025
Beginning Inventory 58,750
Ending Inventory 72,000
Purchase Returns 16,000
Using the periodic system, the cost of goods sold is
a.?502,775.
b.?497,275.
c.?476,275.
d.?523,775.
a160.The following information is available for Norton Company:
Sales Revenue$390,000Freight-In$30,000
Ending Inventory36,000Purchase Returns and Allowances15,000
Purchases270,000Beginning Inventory45,000
Norton's cost of goods sold is
a.$345,000.
b.$330,000.
c.$294,000.
d.$285,000.
a161.At the beginning of September, 2014, GLF Company reported Inventory of $8,000. During the month, the company made purchases of $23,400. At September 30, 2014, a physical count of inventory reported $9,600 on hand. Cost of goods sold for the month is
a.$1,800.
b.$23,400.
c.$21,800.
d.$35,400.
a162.At the beginning of the year, Meng Company had an inventory of ¥500,000. During the year, the company purchased goods costing ¥2,000,000. If Meng Company reported ending inventory of ¥750,000 and sales of ¥2,500,000, the company’s cost of goods sold and gross profit rate must be
a.¥1,250,000 and 50%.
b.¥1,750,000 and 30%.
c.¥1,250,000 and 30%.
d.¥1,750,000 and 70%.
a163.During the year, Carla’s Pet Shop’s merchandise inventory decreased by $40,000. If the company’s cost of goods sold for the year was $600,000, purchases must have been
a.$640,000.
b.$560,000.
c.$520,000.
d.Unable to determine.
a164.Cost of goods available for sale is computed by adding
a.beginning inventory to net purchases.
b.beginning inventory to the cost of goods purchased.
c.net purchases and freight-in.
d.purchases to beginning inventory.
a
165.The Freight-In account
a.increases the cost of merchandise purchased.
b.is contra to the Purchases account.
c.is a permanent account.
d.has a normal credit balance.
a