Which of the following is true about financial accounting?

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