Reference no: EM132972264

Problem 1: If goods shipped FOB destination are in transit at the end of the year, they should be included in the inventory balance of the:

a) Seller

b) Common carrier

c) Buyer

d) Bank

Problem 2: Which method may be used to record a loss on inventory write-down to NRV?

a) Loss method

b) Accrual method

c) Cost of goods sold method

d) Loss method and cost of goods sold method

Problem 3: An entity received a one-year note receivable bearing interest at the market rate, on October 1 of the current year. The face amount of the note receivable as well as the entire amount of the interest are due on September 30 of the following year. The interest receivable on December 31 of the current year would consist of an amount representing?

a) Three months of accrued interest income.

b) Nine months of accrued interest income.

c) Twelve months of accrued interest income.

d) The excess on October 1 of the present value of the note receivable over its face amount.