Accounting Analysis Essay

2923 Words Nov 6th, 2012 12 Pages
1.When a specific account receivable is written off, the entry A) increases net income.
B) decreases net income.
C) can either decrease or increase net income.
D) has no effect on net income.2.Echo Company's 2011 beginning and ending accounts receivable balances were $72,500 and $41,250 respectively. During 2011, the company's sales (all on credit) amounted to $857,250. Per Echo's 2011 cash flow statement, $873,500 was collected from customers while $18,750 related to uncollectible accounts was listed among the "non-cash expenses." If Echo's beginning balance in the allowance for uncollectibles was , the ending balance in this account must be A) $15,000
B) 21,350
C) $36,350
D) $17,6003.An analyst notes that ABC Inc.'s allowance for
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D) is whether any gain or loss related to the transfer is recognized in earnings.14.Reasons why companies might accelerate cash collections include the following except: A. B. Generally accepted accounting principles permit "off-balance sheet" treatment of factored receivables and collateralized borrowings, thus enabling management to "window dress" the company's financial position.C. D. A) The company may have an immediate need for cash but be short of it.
B) Generally accepted accounting principles permit "off-balance sheet" treatment of factored receivables and collateralized borrowings, thus enabling management to "window dress" the company's financial position.
C) There may be an imbalance between the credit terms of the company's suppliers and the time required to collect customer receivables.
D) Competitive conditions require credit sales but the company is unwilling to bear the cost of processing and collecting receivables.15.Manufacturing costs not considered to be closely associated with production are called A) period costs.
B) product costs.
C) absorption costs.
D) variable costs.16.The carrying cost of inventory should include all of the following costs except A) purchase costs.
B) sales taxes and transportation costs paid by the purchaser.
C) general administrative costs associated with the purchase of inventory.
D) insurance and storage costs.17.When a company uses absorption costing A) only fixed costs are inventoried.
B) only

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