20. The ‘Just in Time’ concept of inventory management is best illustrated by: A
ID: 2601579 • Letter: 2
Question
20. The ‘Just in Time’ concept of inventory management is best illustrated by:
A. Receiving deliveries of materials from suppliers just before the materials are used in the production process.
B. Completing the manufacturing process just before the deadline established by the customer
C. An automated factory that reduces production time below that of other companies in the industry
D. Selling finished products before they go out of style
21. An asset which costs $7,200 and has accumulated depreciation of $1,800 is sold for $4,500. What amount will be recognized when the asset is sold?
A. A gain of $900
B. A loss of $900
C A loss of $2,700
D. A gain of $2,700
22. Which depreciation method is most commonly used among publicly owned corporations?
A. Straight-Line
B. Double Declining Balance
C. Units of Output
D. All three are equally used
23. A bond that sells for 102 has a cost of
A. $1,002
B. $1,020
C. $1,200
D. $1,000
24. If a bond selling at 102, it is selling at
A. Maturity value plus 2% interest
B. A discount
C. A premium
D. $102 per bond
25. Most preferred stock have the following characteristics, EXCEPT:
A. To receive dividends on a preferred basis
B. Cumulative Dividends
C. Voting Rights
D. Callable at the option of the corporation
26. Cash dividends paid to stockholders will appear in which section of the statement of cash flows:
A. Operating
B. Investing
C. Financing
D. Discontinued
27. Which of the following would usually be the greatest amount?
A. The number of shares authorized
B. The number of shares issued
C. The number of shares outstanding
D. They must all be the same amount
28. Which of the following is an investing activity?
A. Purchase of equipment
B. Payment of interest
C. Issuing common stock
D. Issuing Long-term debt
29. Which of the following would indicate a cash disbursement?
A. Selling equipment at a loss
B. A decrease in accounts receivable
C. An increase in prepaId expenses
D. A decrease in inventory
30. The credit term 2/10, n/30 means
A. After 10 days 2% interest is charged
B. There is a 10% discount if payment is received within 30 days
C. There is a 2% discount if the payment is received within 10 days
D. There is a 10% discount if paid immediately and a 2% discount if paid within 30 days
Explanation / Answer
20
Answer : A. Receiving deliveries of materials from suppliers just before the materials are used in the production process.
JIT is mainly for eliminating non value added activities
Threw JIT planned t reduce warehouse costs
Hence A is the correct answer
21.
B. A loss of $900
Cost of asset $7200
Accumulated depreciation $1800
WDV $5400
Sold for $4500
Loss $900
22.
A. Straight-Line
Straight-Line depreciation method is most commonly used among publicly owned corporations.
23
Answer : B. $1,020
A price of 102 means 102 percent of par value. In this case, a $1,000 bond’s price would be $1,020.
24.
Answer : C. A premium
Here bond is selling above par value
Hence it is selling at premium.
25.
Answer : C. Voting Rights
Preferrd stock holders does not having voting rights
26.
Answer : C. Financing
Cash dividends paid to stockholders will appear in Financing activity of the statement of cash flows.
Financing activity related to sources and application of finance
Cash dividend is a application of finance.
27.
Answer : A. The number of shares authorized
Generally number of shares authorized is the greater amount.We can't say alauthorized shares are issued and subscribed.Hence authorized shares is the maximum.
28.
Answer : A. Purchase of equipment
Purchase of equipment is an investing activity
Remaining B,C&D are finnancing activities
29.
Answer : C. An increase in prepaId expenses
Since Prepaid expenses is an asset,if it increases it indicates cash disbursement.
Hence An increase in prepaId expenses indicates cash disbursement.
30.
Answer : C. There is a 2% discount if the payment is received within 10 days
2/10 idicates : There is a 2% discount if the payment is received within 10 days
n/30 indicates : If full payment is not done within 10 days next due date for payment is 30 days without discount
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