Accounting Answers for BUS 475 Final Exam 2017

Which of the following is not a current liability on December 31, 2014?

 A Note Payable due December 31, 2015

Explanation: The next fiscal year will start on Jan 1st, 2015. A current liability must be payable in full within 1 year or less. Therefore, the note payable is the correct response because it is due in more than one year. In practice, accounts that start with “note” will usually refer to a long term account.

 
  • Student: Barry Tadworth
  • Textbook: Multiple Textbooks Combined
  • Course: BUS 475 (2017-18)
 

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows.

Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows.

 Operating activities section.

Explanation: The operating activities section would be responsible for representing the decreases or increase in current assets, including accounts receivable.

Which trial balance will consist of the greatest number of accounts?

 Adjusted trial balance

Explanation: The adjusted trial balance will contain more accounts because it will have all the accounts on the initial trial balance, as well as adjustment accounts. In most, this will result in significantly more accounts that the initial trial balance or the post closing trial balance.

GAAP, compared to IFRS, tends to be more:

 rules-based

Explanation: According to AICPA, the GAAP system is based on a complex set of rules, while the IRFS system is based on simple core principles. GAAP has been around for a longer amount of time and has created may special-case rules for specific industries and situations.

Trumpeting Trumpets has the following inventory data:

  • July 1: Beginning inventory 30 units at $120
  • July 5: Purchases 180 units at $112
  • July 14: Sale 120 units
  • July 21: Purchases 90 units at $115
  • July 30: Sale 84 units

Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis?

 $23,088

 

Explanation: With FIFO, it is necessary to liquidate inventory in order of first-in-first-out. In this example, we can use the following  formula: (30 x 120) + [(120 + 84 – 30) x 112]

On March 1st, Candy, Inc. had supplies on hand of $1,500.

During the month, Candy purchased supplies of $2,900 and used supplies of $2,800.  The March 31st balance sheet should report what balance in their supplies account?

 $1,600

Explanation: Assuming all transactions have been recorded, we expect supplies to have a balance equal to total purchases minus total usage. It can be solved by added initial supplies to new supplies, then subtracting the total usage. (1500+2900) – 2800 = 1600

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