Question : 51. Cumberland, Inc. has applied to its bank for a loan. : 1229748

Accounting

51. Cumberland, Inc. has applied to its bank for a loan. The bank asks Cumberland’s controller about the total amount of the company’s accounts receivable. Assuming that all accounting records are up-to-date, the controller can best answer this question by referring to:
A. The Income Statement.
B. The Accounts Receivable controlling account.
C. The Accounts Receivable subsidiary ledger.
D. Last year’s Balance Sheet.

52. In a perpetual inventory system:
A. Merchandising transactions are recorded as they occur.
B. No effort is made to record the Cost of Goods Sold until year-end.
C. Entries are made in the Cost of Goods Sold account whenever merchandise is purchased or sold.
D. The need for ever taking physical inventory is eliminated.

53. Net sales is calculated by:
A. Subtracting cost of sales from sales.
B. Subtracting sales returns and sales discounts from sales.
C. Subtracting sales returns, cost of sales, and sales discounts from sales.
D. Subtracting gross profit from sales.

54. In a perpetual inventory system, two entries usually are made to record each sales transaction. The purposes of these entries are best described as follows:
A. One entry recognizes the sales revenue, and the other recognizes the cost of goods sold.
B. One entry records the purchase of the merchandise, and the other records the sale.
C. One entry records the cost of goods sold, and the other reduces the balance in the Inventory account.
D. One entry updates the general ledger, and the other updates the subsidiary ledgers.

55. In a periodic inventory system, which of the following accounts may be closed by debiting Cost of Goods Sold?
A. Sales, Inventory (beginning), and Gross Profit.
B. Inventory (beginning) and Purchases.
C. Purchases and Inventory (ending).
D. Sales, Inventory (beginning), and Cost of Goods Available for Sale.

56. In comparing a perpetual inventory system with a periodic inventory system, which of the following statements is not correct?
A. Most large companies use perpetual inventory systems.
B. A periodic system does not include an inventory subsidiary ledger.
C. The perpetual method is easier to apply in a manual accounting system.
D. Regardless of the system in use, most businesses take a physical inventory at least once a year.

57. Hicksville’s Department Store uses a perpetual inventory system. At year-end, the balance in the Inventory controlling account is $1,200,000. Assuming that the inventory records have been maintained properly, a year-end physical inventory:
A. Is unnecessary.
B. Is needed to establish the ending inventory, as the $1,200,000 balance in the Inventory controlling account represents the beginning inventory.
C. Probably will indicate more than $1,200,000 in merchandise on hand.
D. Probably will indicate less than $1,200,000 in merchandise on hand.

58. Jayson Products uses a perpetual inventory system. At year-end, the Inventory account had a balance of $280,000, but a complete year-end physical inventory indicated goods on hand costing only $273,000. Jayson should:
A. Reduce its cost of goods sold by $7,000.
B. Record a $7,000 current liability.
C. Reduce the balance in its Inventory controlling account and inventory subsidiary ledger by $7,000.
D. Reduce the balance in the Inventory controlling account and record a current liability, both in the amount of $7,000.

59. The cost of delivering merchandise to the customer is:
A. Part of cost of goods sold.
B. Used in the calculation of net sales.
C. An operating expense.
D. A reduction of gross profit.

60. In a periodic inventory system, the cost of goods sold is:
A. Recorded as sales transactions occur.
B. Determined by a computation which is performed at year-end, after the taking of a complete physical inventory.
C. Equal to the beginning inventory, plus purchases made during the period, less sales revenue for the period.
D. Determined by subtracting the balance in the Gross Profit account from the amount of net sales.

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July 1, 2023

Distinguishing Inductive and Deductive Reasoning

Required Resources
Read/review the following resources for this activity:

· Textbook: Chapter 8, 9, 17 (Introduction)

· Lesson

· Minimum of 1 scholarly source (in addition to the textbook)

Click on the following tabs to review the concepts that will be addressed in this activity:

A valid structure is the way in which an argument is put together that assures it will pass the test of logical strength.

Deductive: In deductive arguments, the speaker asserts that her premises are true and, therefore, her conclusion must be accepted. Remember that in a deductive argument, logical strength does not depend on the literal truth of the premises. When we test for logical strength, we assume the premises are true. Once we determine that the argument is logically valid, we can then look at the actual – not presumed – truth of the premises.

Inductive: In inductive arguments, the speaker presents evidence that she claims support the probable truth of her conclusion – that her conclusion is the most likely true – and so you should accept it.

The Basic Structure of Deductive and Inductive Arguments
Argument examples:

Deductive Argument Example: “Tightening laws restricting the use and possession of firearms does not protect average law-abiding citizens; it only puts them at greater risk. Enforcing licensing restrictions, trigger locks, and waiting periods makes it more difficult for law-abiding citizens to defend themselves, and, as a result, encourages criminal activity. Only criminals benefit when ordinary citizens are deprived of their right to own a firearm and protect themselves, their homes, and their families" (Lott, 2000, p. 169)

Lott, J., (2000). More guns, less crime: Understanding crime and gun-control laws. University of Chicago Press.

The argument boils down to this:

· Laws that are obeyed by ordinary citizens and not obeyed by criminals are laws that put ordinary citizens at risk.

· Tight gun laws are laws that are obeyed only by ordinary citizens.

· Tight gun laws put ordinary citizens at risk.

However, the argument itself is composed of three intertwined syllogisms:

Only ordinary citizens are persons who respect tight gun laws.
Criminal persons are not ordinary citizens.
Therefore, criminals do not respect tight gun laws.

Tight gun laws restrict only ordinary citizens.
No criminal is an ordinary citizen.
No criminal is restricted by tight gun laws.

Laws that disfavor the good are laws that favor the bad.
Tight gun laws favor the bad.
Therefore, tight gun laws disfavor the good.

Notice that you cannot remove any of the “legs” and maintain the claim. Notice, also, that the reasons are closely connected and depend on or follow from each other. Notice, also, that the first premise (called the major premise) must be accepted as true, or the entire argument fails.

Inductive Argument: The United States is too dependent upon foreign oil. According to the U.S. Department of Energy, we rely on imported foreign oil for about 45% of our needs. Of the imported oil, most comes from Canada, but 22% comes from countries in the Middle East. Undeniably, this dependence shapes our foreign policy. We have vast oil reserves that could make us energy independent. Development of these resources would produce much-needed jobs, many of them in areas of the country suffering most from the recession. We should be developing an energy policy that makes us energy independent.

· Reason: We import 45% of our oil.

· Reason: Middle East oil imports shape our foreign policy.

· Reason: Our vast oil reserves could make us energy independent.

· Reason: Development of oil reserves could produce much needed jobs.

· Conclusion: For any or all of the above, independent reasons, we should become energy independent.

Notice that any one of these reasons, standing alone, could support the conclusions; they are not logically related to one another as they would be in a syllogism.

Initial Post Instructions
For the initial post, address the following:

· Find and post examples of deductive and inductive arguments. Do NOT use an argument example which clearly indicates it is an example of an inductive/deductive argument.

· For each example, evaluate its logical strength, using the concepts and ideas presented in the textbook readings, the lesson, and any other source you find that helps you to evaluate the validity (deductive) or strength (inductive) of the argument. You can use examples from the text, or you can find examples elsewhere.

oEditorials and opinion columns are a good source, as are letters to the editor. Blogs will also often be based on arguments.

oUse mapping and evaluative techniques to make sure it is an argument.

· Is it inductive or deductive? Explain why.

· Does it pass the tests of validity and strength? Explain.