1.

Adjusting entries are needed

Select one:

a. only under the cash basis of accounting.

b. only under a perpetual inventory system

c. only under IFRS

d. to produce relevant financial information for users.

e. to update accounts at the beginning of the accounting period.

2.

Walmarts sells $6,250 of goods on account in the current year and collects $3,250 of this. It incurs $4,200 in expenses on account during the current year and pays $2,600 of them. Walmart would report what amount of net income under the cash and accrual bases of accounting, respectively?

Select one:

a. $3,250 on the cash basis and $4,200 on the accrual basis

b. $3,000 on the cash basis and $1,600 on the accrual basis

c. $650 on the cash basis and $2,050 on the accrual basis

d. $2,050 on the cash basis and $3,000 on the accrual basis

e. Impossible to answer unless we know if the company is also using a perpetual inventory system.

3.

Inventory that originally cost $11,200 was written down to its net realizable value of $9,400 at the end of 2021. At the end of 2022, the net realizable value is determined to be $11,700. At what amount should the inventory be reported on the December 31, 2022 statement of financial position?

Select one:

a. $9,700

b. $11,700

c. $11,200

d. This question cannot be solved without knowing whether the company uses specific identification, FIFO, or average cost

e. $9,400

4.

For 2022, Superplus Inc. reported $48,000 beginning inventory and $52,000 ending inventory. Sales were $320,000 and gross profit was $110,000 for the same period. Based on these figures, days in inventory for 2022 was

Select one:

a. Unable to determine without more information.

b. 57 days.

c. 87 days.

d. 59 days.

e. 83 days.

5.

Griffin Inc. started the year with $1,000 of supplies on hand. It purchased supplies costing $4,250 on March 15 and debited Supplies for the full amount. At the end of the accounting period, a physical count of supplies revealed $2,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

Select one:

a. debit Supplies Expense, $2,100; credit Supplies, $2,100.

b. debit Supplies, $5,250; credit Supplies Expense, $4,250, Credit Accounts Payable $1,000 (d) debit Supplies, $2,100; credit Supplies Expense, $2,100.

c. It depends upon whether the company was following IFRS or ASPE

d. debit Supplies, $4,250; credit Supplies Expense, $4,250.

e. debit Supplies Expense, $3,150; credit Supplies, $3,150.