Question

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25. Which of the following is not true regarding intangible assets: a) They have physical substance b) They do not have physical substance c) They represent rights such as patents or copyrights d) Amortization is the term used when depreciating an intangible asset 26. Which of the following occurs when a company deems it necessary to write-off an accounts receivable accounts? a) Both accounts receivable and allowance for doubtful accounts will decrease. b) Bad debt expense will increase c) Both allowance for doubtful accounts and bad debt expense will increase d) The cash realizable value of accounts receivable will decrease. 27. According to the article, Sarbanes-Oxley (SOX) Act of 2002, the four principal areas that the new law set our reforms on included the following except. a) Tax compliance b) Accounting regulations c) Increased criminal punishment d) Corporate responsibility 28. Which of the following is true about LIFO? a) Ending inventory and cost of goods sold reflect an average of inventory costs b) Cost of goods sold represents the oldest costs c) Cost of goods old represents the most recent costs d) Ending inventory represents the most recent costs 29. During a period of increasing costs, FIFO: a) Results in ending inventory on the balance sheet being valued close to current costs. b) Overstates cost of goods sold expenses on the income statement c) Most closely matches current costs of inventory items in cost of goods sold d) Understates the value of ending inventory on the balance sheet

Answer 1

Ans 25 - A

They have physical substance. This statement bis wrong about intengible Assets . Because intengible Assets do not have any physical substance.

Tangible assets have physical substance

Ans 26 - C

Both bad debt allowance and bad debts expenses increase.

The entry to write off a bad account affects only balance sheet accounts: a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. No expense or loss is reported on the income statement because this write-off is "covered" under the earlier adjusting entries for estimated bad debts expense

Ans 27 - A

Tax compliance is not a principal of this Act

four principal areas:

:-Corporate responsibility

:-Increased criminal punishment

:-Accounting regulation

:-New protections

Ans 28 C

Cost of good sold represent most recent cost

The Last-In, First-Out (LIFO) method assumes that the last unit to arrive in inventory or more recent is sold first.