Question:6 Which of the following is true of the Allowance for Uncollectible Accounts account? It is

Question:6

Which of the following is true of the Allowance for Uncollectible Accounts account?

It is a “nominal” or income statement account

It is a contra-revenue account

It may have a debit balance at year end following the adjustment for estimated uncollectible accounts receivable

Its balance following the year end adjustment should reflect an estimate of the amount of ending accounts receivable that will ultimately prove to be uncollectible

none of these

17

A debit balance in the Allowance for Uncollectible Accounts account before the year end adjustment for the current year’s uncollectible accounts expense means

that the prior year’s estimated uncollectible accounts receivable must have been overestimated

that the prior year’s estimated uncollectible accounts receivable must have been underestimated

that the current year’s write-offs of uncollectible accounts receivable were less than the prior year’s ending allowance for uncollectible accounts balance

that the direct write-off rather than the allowance method was used to account for uncollectible receivables

The following information is for Raisa Company

Original Cost Net Realizable Value Normal Profit Replacement Cost

Inventory Item A$3,900 $3,800 $400 $3,300

After making any necessary lower-of-cost-or-market adjustment, at what amount will Item A be reported in Raisa’s books?

3,400

3,900

3,800

3,300

Use the following information for the next 3 questions Jimbo’s buys spicy hot dogs in bulk and sells them to street vendors The owner’s January inventory transactions are as follows:

1/1Beginning inventory2,000 cases at $10/case

1/8Sales1,700 cases

1/11Purchases1,000 cases at $11/case

1/14Sales1,100 cases

1/21Purchases1,200 cases at $12/case

1/26Sales1,100 cases

Assuming the perpetual LIFO inventory method is used from inception, the amount of Cost of Goods Sold for the 1/14 sale would be

$11,000

$11,800

$12,100

$13,200

none of these

13

Assuming the perpetual LIFO inventory method is used from inception, determine the cost of Jimbo’s ending January inventory

$300

$3,000

$3,200

$3,600

none of these

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