Question
12. The inventory system employing accounting records that continuously disclose the amount of inventory is called A. periodic B. perpetual C. physical D. retail 13.
12. The inventory system employing accounting records that continuously disclose the amount of inventory is called
A. periodic
B. perpetual
C. physical
D. retail
13. Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. The Pound Co. paid the invoice within the discount period. What is the sales amount to be recorded in the above transactions?
a.$25,500
b.$26,010
c.$24,990
d.$16,000
14. Calculate income from operations for Jonas Company based on the following data:
Sales | $764,000 |
Operating expenses | 52,500 |
Cost of merchandise sold | 538,000 |
a.$173,500
b.$226,000
c.$711,500
d.$485,500
15. Calculate the gross profit for Jefferson Company based on the following:
Sales | $764,000 |
Selling Expenses | 42,500 |
Cost of Merchandise Sold | 538,000 |
a.$226,000
b.$721,500
c.$495,500
d.$183,500
16. Which of the following is not a difference between a retail business and a service business?
A. the inclusion of gross profit on the income statement
B. merchandise inventory included on the balance sheet
C. accounting equation
D. in what is sold
17. Who is responsible for the freight costs when the terms are FOB shipping point?
A. the buyer
B. the seller
C. the ultimate customer
D. either the seller or the buyer
18. Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a
A. credit to Sales
B. credit to Accounts Payable
C. debit to Cost of Merchandise Sold
D. credit to Merchandise Inventory
19. The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be
A. Jan. 1 Office Supplies 1,500 Cash 1,500
B Jan. 1 Merchandise Inventory 1,500 Cash 1,500
C. Jan. 1 Purchases 1,500 Accounts Payable 1,500
D. Jan. 1 Cash 1,500 Accounts Receivable 1,500
20. During the current year, merchandise is sold for $137,500 cash and $425,600 on account. The cost of the merchandise sold is $322,325.
What is the amount of the gross profit? $_______
21. The control environment in an internal control structure is the overall attitude of management and employees about the importance of internal control.
True or False
22. Businesses who have several bank accounts, petty cash, and cash on hand, would maintain a separate ledger account for each type of cash.
True or False
23. In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.
True or False
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