Consider the following statements about absorption costing and variable costing: I.Variable costing is consistent with contribution reporting and cost-volume-profit analysis.II.Absorption costing must be used for external financial reporting.III.A number of companies use both absorption costing and variable costing.Which of the above statements is (are) true?
A. I only.
B. II only.
C. III only.
D. I and II.
E. I, II, and III.
Answer: E
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When merchandise is sold and the periodic system of inventory is used, the journal entry for a sale could include
a. debiting Accounts Receivable and crediting Sales; b. debiting Accounts Receivable and crediting Merchandise Inventory; c. debiting Cost of Goods Sold and crediting Merchandise Inventory; d. debiting Cost of Goods Sold and crediting Sales; e. A & C
Lisa Larue operated a beauty parlour under the name You Look Marvelous. Initially it was a sole proprietorship, but after being in business for a year, Lisa decided to incorporate as YLM Ltd
The bank with which she had been dealing for the past year demanded that she now sign a demand promissory note, which she did, as "Lisa Larue". When the note was not paid by YLM, the bank sued Lisa personally. Which of the following is TRUE? A) Lisa is not liable. The whole point of incorporating was to obtain limited liability. B) Lisa is liable because she did not make clear in the note that she was signing on behalf of YLM Ltd. C) Lisa is not liable because the bank knew that Lisa had incorporated and therefore intended not to assume personal liability for the business's debts. D) Lisa is liable because she is the sole shareholder E) Lisa is not liable as the promissory note is void due to mistake
Which of the following statements about quantity discounts is FALSE?
A) The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. B) In inventory management, item cost becomes relevant to order quantity decisions when a quantity discount is available. C) If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. D) The larger the annual demand, the less attractive a discount schedule will be. E) The smaller the ordering cost, the less attractive a discount schedule will be.
On January 1, 2017, Anodel, Inc acquired a machine for $1,010,000
The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $62,000. Calculate the depreciation expense per year using the straight-line method. A) $202,000 B) $189,600 C) $251,600 D) $252,500