Question 1 (2 points) Saved When should a company report the cost of an insurance policy as an expense? Question 1 options: When the company first signs the policy. When the company receives the benefits from the policy over its period of coverage When the company receives payments from the insurance company for its insurance claims. When the company pays for the policy. Question 2 (2 points) If the Donkey Corp. writes down its inventory, its: Question 2 options: cost of goods sold will decrease. its current assets will decrease. its stockholders equity will increase. net income will increase. Question 3 (2 points) Which of the following accounts would normally have a debit balance? Question 3 options: Inventory Sales Returns and Allowances Sales Discounts All of the above Question 4 (2 points) Bs Clothing purchased goods on credit costing $50,000 with terms of 1/10 n/30. Payment is made to the seller 7 days after the purchase. How would the payment be recorded? Question 4 options: Debit Accounts Payable and credit Cash for $50,000 Debit Accounts Payable for $50,000 credit Cash for $49,500, and credit Inventory for $500 Debit Inventory for $500, debit Cash for $49,500, and credit Accounts Payable for $50,000 Debit Accounts Payable for $50,000, credit Cash for $49,500, and credit Cost of Goods Sold for $500 Question 5 (2 points) Donkey Company has a periodic inventory system and uses the LIFO method to assign costs to inventory and cost of goods sold. Consider the following information: Date Description # of units Cost per unit January 1 Beginning inventory 100 $5 October 2 Purchase 75 $4 December 5 Sales 150 What amounts would be reported as the cost of goods sold and ending inventory balances for the period? Question 5 options: Cost of goods sold $625; Ending inventory $175 Cost of goods sold $675; Ending inventory $125 Cost of goods sold $550; Ending inventory $250 Cost of goods sold $600; Ending inventory $200 Question 6 (2 points) Donkey Furniture Company carries three lines of sofas. Information about the sofa inventory as of the end of its most recent fiscal year follows. If LCM is applied to each separate product line, what is the amount of the adjustment that must be made to the companys inventory? Product Line Cost per Unit Market Value per Unit Quantity R $70 $72 100 M 60 50 200 C 82 95 250 Question 6 options: Credit Inventory $2,000, Debit A/P $2,000 No answer is correct Credit Inventory $200, Debit CGS $2,000 Debit LCM $2,000, Credit Inventory $200 Debit CGS $2,000, Credit Inventory $2,000 Question 7 (2 points) A fire destroyed some of Powell Companys records. Information from the documents found related to inventory is listed below. Ending Inventory 97,000 Cost of Goods Sold 445,000 Consigned Goods 87,000 Beginning Inventory 43,000 What was the amount of inventory that was purchased during the year? Question 7 options: $412,000 $565,000 $499,000 $478,000 Question 8 (2 points) A dance studio accepts $1,500 to provide a series of dance lessons to a youth group during the month of July. The studio decides to record the revenue in July. The studio incurs rent, utilities, and salaries expenses in July. The studio decides to record those expenses in August, when it pays for them. One or both of these decisions: Question 8 options: violate the expense recognition principle. violate the accounting equation. violate the revenue recognition principle. are an example of accrual accounting. Question 9 (2 points) The inventory costing method selected by a company can affect Question 9 options: all choices are correct The statement of retained earnings. The income statement. The balance sheet. Question 10 (2 points) Which of the following statements about the balance sheet is correct?