5. Johnson discovered that $500 of inventory was destroyed by a fire. What account would be debited this case? A. inventory b. Accounts Payable c. Cost of Goods Sold d. Depreciation Expense 6. If Johnson purchases inventory for $750 with terms of 2/10, n/30, how much will Johnson pay to satisfy the liability, assuming he takes the discount? a. $500 b. $490 c.$680 d. $735 7. If Sales-$1,000 and COGS=$600, and operating expenses = $100, the gross profit percentage would be a. 50% b. 40% c. 20% d. 10% 8. Smith purchased inventory: 100 units @ $5 per unit and 100 units at $6 per unit. If Smith sells 130 units, the COGS under FIFO would be: a. $500 b. 620 c. $480 d.$680 9 Johnson had an average inventory this year of $15,000. The Cost of Goods Sold was $90,000 and Sales were $180,000. The inventory turnover would be: a. 6 times b. 12 times c. .5 d. 2 times 10. Johnson owns equipment costing $90,000 that currently has $10,000 of accumulated depreciation. The book value of the equipment is: a. $90,000 b. $100,000 11. c. $80,000 d. $60,000 Howard has current assets of $24,000 and current liabilities of $16,000. The current ratio would be: a. 2:1 b. 8:1 c.6:1 d. 1.5 to 1 12. In the closing process, one of these accounts does not get closed. Which one? a. Service Revenue b. Depreciation Expense c. Income Summary d. Smith Capital 13. Under the accrual system of accounting, when is revenue recognized and recorded? A. only when cash is received b. when the service or product has been delivered c. when an order has been received from a customer d. when the sales person contacts the customer 14 In a bank reconciliation, the items that require journal entries are the items on which side? A. the "books" side b. the "bank" side c. items on both sides 15. The adjustment for depreciation involves a debit to Depreciation Expense and a credit to: a. Cash b. Accounts Payable c. Equipment d. Accumulated Depreciation Equipment