Which of the following is true about financial accounting?
It provides information to investors and creditors on the whole company.
It reports detailed information for segments of the company.
It provides detailed reports as needed.
It provides guarantees required that the company will be able to pay debt.
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Question 2
4 pts
A service company has:
no inventory account
one inventory account
two inventory accounts
three inventory accounts
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Question 3
4 pts
Which of the following is most likely a merchandising company?
a real estate office
an accounting office
a shoe store
a custom home builder
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Question 4
4 pts
Which of the following would appear on the balance sheet of a merchandiser but not on the balance sheet of a service company?
cost of goods sold
merchandise inventory
gross profit
work in process inventory
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Question 5
4 pts
Our company is a manufacturer and has the following data available for the current year:
- sales, $550,000;
- sales discounts, $20,000;
- sales returns and allowances, $15,000; and
- cost of goods sold, $200,000.
What is the amount reported on the income statement for net sales?
$530,000
$515,000
$500,000
$330,000
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Question 6
4 pts
Which type of company would report merchandise inventory as a line item on their balance sheet?
service company
merchandising company
manufacturing company
nonprofit entity
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Question 7
4 pts
Our company is a manufacturer and has the following data available for the current year:
- sales, $550,000;
- cost of goods manufactured, $250,000;
- finished goods beginning inventory, $30,000; and
- finished goods ending inventory, $20,000.
What is the amount reported on the income statement for cost of goods sold?
$260,000
$240,000
$290,000
$310,000
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Question 8
4 pts
Our company is a manufacturer of sunglasses. Depreciation for equipment at the manufacturing facility would most likely be classified as:
direct materials
indirect materials
direct labor
indirect labor
other factory overhead
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Question 9
4 pts
Prime costs include:
direct labor and indirect labor
direct materials and direct labor
direct labor and factory overhead
direct materials and factory overhead
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Question 10
4 pts
Which of the following would be both a prime cost and a conversion cost?
direct labor
direct materials
factory overhead
indirect labor