Answer the following statements true (T) or false (F)
1. Counting inventory that is in transit on December 31 that was shipped from the supplier FOB shipping point would not cause any error in the final inventory valuation.
2. Inventory errors cancel out after two periods
3. Accidentally double-counting inventory would result in an overstatement of net income for that same period.
4. Ending inventory can be estimated by subtracting the estimated cost of goods available for sale from the Cost of Goods Sold.
5. The historical gross profit percentage can be used to estimate the current period's gross profit.
1. TRUE
2. TRUE
3. TRUE
4. TRUE
5. FALSE
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A firm is required to estimate a liability for repairs for products sold with a warranty. If the firm's accountants later find that the estimated amount for repairs has been overstated, the correct accounting procedure is to
a. make an adjusting entry to reduce the amount of estimate. b. make a correcting entry because the overstatement is an error. c. show the amount of overstatement on the income statement as a loss. d. do nothing for the year in question and modify the next year's estimate.
A ________ brings buyers and sellers together and facilitates transactions, typically charging a fee after a transaction is completed
A) cash-and-carry wholesaler B) broker C) retailer D) wholesaler E) commission merchant
Criticism of 3BL suggests 3BL is comparable to
A. PR rather than organizational values. B. a public confession. C. a marketing campaign rather than a product. D. a code of ethics hanging on the wall in every office: it does not lead to ethical behavior.
One of the differences between capital budgeting for domestic and foreign operations is that the:?
A. ?cash flow estimation is simple for foreign operations. B. ?repatriation of earnings does not occur for foreign operations. C. ?cash flows for foreign operations are subject to future exchange rate changes. D. ?foreign operations are free from taxes imposed by home-country and host-country. E. ?foreign operations are always less riskier than domestic operations.