A company changed its inventory costing formula from weighted average to FIFO this year, and did not disclose the reason and effect of the change on its financial statements. Which of the following is correct?

Question 66 options:

a)	comparable - violated

b)	faithful - followed

c)	going concern - violated

d)	unit-of-measure - violated

e)	timely - followed

Which of the following transactions does NOT change the net realizable value of accounts receivable? Select all that apply.

Question 67 options:

a)	a sales return, where the original sale was on account

b)	writing off an account receivable

c)	recording bad debt expense

d)	receiving a cheque from a customer whose account receivable was previously written off

e)	cash sales

Question 68 (1 point)

Which of the following questions would the owner of a business be most likely to ask?

Question 68 options:

a)	Can the business pay its existing bank loan, or borrow more?

b)	Has the business filed its income tax returns correctly and on time?

c)	Can the business pay the increased wages that the union is demanding?

d)	Has the company followed GAAP in preparing its financial statements?

e)	Is the business profitable enough to pay dividends?

Question 69 (3 points)

Which of the following transactions does NOT affect bad debt expense? Select all that apply. (3 marks)

Question 69 options:

a)	using the aging method to estimate the required Allowance for Doubtful Accounts

b)	writing off an account receivable

c)	a sales return, where the original sale was on account

d)	giving a cash refund to a customer who returned an item that he had already paid for

e)	receiving a cheque from a customer whose account receivable was previously written off

Question 70 (2 points)

Why might the Allowance for Doubtful Accounts have a positive balance before recording the year's bad debt expense? Select all that apply.

Question 70 options:

a)	Write-offs in the year were higher than expected.

b)	The previous allowance was overestimated.

c)	Write-offs in the year were lower than expected.

d)	The previous allowance was underestimated.

e)	There were more cash sales and fewer credit sales in the year than expected.