1.Lincoln Glass Company sold goods for $5,000 to Olivia Company on March 12 on credit. Terms of the sale were 3/10, n/30. At the time of the sale, Lincoln recorded the transaction by debiting accounts receivable for $5,000 and crediting sales revenue for $5,000 while Olivia debited Purchases for $5,000 and credited Accounts Payable for $5,000. Olivia paid the balance due, less the discount, on March 21. To record the March 21 transaction, Lincoln would debit which of the following?

Cash $4,850

None of the others alternatives are correct

Discount gained $150

Discount lost $150

Cash $5,000

2.When a company uses the perpetual inventory system in accounting for its merchandise inventory, which of the following is true?

None of the others alternatives are correct

The inventory account is updated throughout the year as purchases are made.

Cost of goods sold is computed at the end of the accounting period rather than at each sale.

Purchases are recorded in the cost of goods sold account.

The inventory account is updated after each sale

3.On January 1, 20X7, the ledger of Conglomo Corporation correctly showed supplies inventory of $900. During 20X7, supplies purchases amounted to $6,000. A count (inventory) of supplies on hand at December 31, 20X7, showed $1,800. The 20X7 Balance Sheet statement should report supplies amounting to:

$5,100

$1,800

$6,000

$6,900

None of the others alternatives are correct

4.The following amounts have been extracted from the accounts of Sell-It at its year-end, December 31, 20x9:

Sales $50,000

Cost of Goods Sold $35,000

Inventory $10,000

Account Payable $8,000

If an error were made computing Sell-its ending inventory and inventory were overstated by $5,000 then

liabilities are understated by $5,000

gross profit is understated by $5,000

Cost of goods sold is overstated by $5,000

net income is overstated by $5,000

None of the others alternatives are correct

5.The cost of goods sold (COGS) in a periodic inventory system is found by

deducting the cost of ending inventory from the cost of goods available for sale

adding the net cost of purchases to the ending inventory

deducting the cost of the ending inventory from the net cost of purchases

None of the others alternatives are correct

deducting the cost of beginning inventory from the cost of goods available for sale

6.A company purchases $25,000 of inventory in January 20X6 and will pay for it in March 20X6, which of the following statements is false?

None of the others specific alternatives are correct

None of the others alternatives are correct

The statement of cash flows will report an operating cash outflow of $25,000 in March 2016

The income statement will report the $25,000 as cost of goods sold in January 2016 when they are purchased

The company will report accounts payable of $25,000 in February 2016

7.A company reports its 20X4 cost of goods sold at $10 million. Its ending inventory for 20X4 is $1.5 million and for 20X3, ending inventory was $1.2 million. How much inventory did the company purchase during 20X4?

$12.7 million

None of the others alternatives are correct

$10.3 million

$13.3 million

$13.0 million

8.A company purchases $25,000 of inventory in January 20X6, pays for it in March 20X6 and sells them in May 20X6. The accounting period ends on December 31st. Which of the following statements is correct?

None of the others alternatives are correct

The 20X6 Statement of Retained Earnings will not be affected by this transaction

The statement of cash flows for 20X6 will report an operating cash outflow of $25,000

The 20X5 income statement will report the $25,000 as cost of goods sold

The company will report accounts payable of $25,000 in 20X6 Balance Sheet

9.A company reports its 20X4 purchases at $13 million. Its ending inventory for 20X4 is $1.5 million and for 20X3, ending inventory was $1.2 million. How much cost of goods sold did the company report in 20X4?

$13.3 million

$12.7 million

$10.3 million

None of the others alternatives are correct

$13.0 million

10.

Atkinson Corporation sold merchandise with an invoice price of $3,000 to Zoltan, Inc., with terms of 4/10, n/30. In the books of Zoltan, which of the following is the correct entry to record the payment by Zoltan within the 10 days if the company uses the periodic inventory system and the gross method to record purchases? O Dr. Cash 2,88 Dr. Sales Discount 120 Cr. Accounts Receivable 3,000 O None of the others alternatives are correct O Dr. Accounts Payable 2,880 Cr. Cash 2,880 O Dr. Accounts Payable 3,000 Cr. Cash 2,880 Cr. Purchase Discount 120 O Dr. Purchases 2,880 Cr. Cash 2,880