1. Last year the Grace Company had net sales of $900,000 and a gross profit of $380,000. Cost of goods available for sale totaled $1,010,000, and ending inventory was $490,000. If purchases for the year were $800,000, what was the amount of beginning inventory. a. $520,000 b. $280,000 c. $210,000 d. $310,000 e. None of these.

2. Freight-in costs should be: a. borne by the buyer if the F.O.B. terms are destination b. borne by the buyer if the F.O.B. terms are shipping point c. borne by the seller regardless of F.O.B. terms d. equally shared by buyer and seller

3. Adjusting entries are made in order to satisfy the: a. consistency principle b. objectivity principle c. matching principle d. materiality principle e. adjustment principle