Multiple Choice Accounting Questions (Simple)

Please answer the questions below

Question 12

For calendar year 2020, Gomez Corporation reported pre-tax income of $70,000.A recount of the companies inventory revealed the 2020 ending inventory was overstated by $10,000.What is Gomez's corrected pre-tax income for 2020?

Question 12 options:

a) $60,000

b) $70,000

c) $75,000

d) $80,000

Question 13

Which is true regarding zero interest bearing notes?

Question 13 options:

a) the note does not need to be recorded

b) the issuer will never be paid

c) the effective interest method of amortization should be used with a rate of 100%

d) an implicit rate should be considered to determine the present value

Question 14

During the year, Brownie Inc, who uses the allowance method, made an entry to write off a $2,000 uncollectible account. Before this entry was posted, the balance in accounts receivable was $40,000 and the balance in the allowance account was $3,500. The net realizable value of accounts receivable after the write-off entry was

Question 14 options:

a)$40,000.

b)$38,500.

c)$38,000.

d)$36,500