A company determines the cost of goods sold each time a sale occurs in a a periodic inventory system only a perpetual inventory system only b, B on July 1 with credit terms 10, n/30. Company A returns $1,200 of the merchandise on July S. On July lL Company B received full payment from Company A. The amount of the payment on July 7. CompanyA purchases $2,500 of merchandise from Company 1 1 is a. $1,300. b. $1,255 c. $1,265. d. $1,248 mple-step income statement distinguishes between operating and non-operating activities. 9. The existing balance in Allowance for Doubtful Accounts is considered in computing bad debt expense in the a. percentage-of-receivables basis b. percentage-of-sales basis. c. percentage-of-receivables and percentage-of-sales basis d. direct write-off method. 10. Financial information that is capable of making a difference in a decision is a faithfully representative. b. relevant. c. convergent. d. generally accepted. 11. The unearned revenue adjusting entry for $5,000 was not posted. What impact will this have on the financial statement? a. Asset and Expenses will be overstated. b. Revenue and Owner's Equity will be understated. c. Owner's Equity will be overstated. d. Liabilities and Expenses will be understated. 12. When the current replacement cost of inventory is less than its cost, it is written down to a. LIFO value. b. average-cost value. c. market value. d. FIFO value CCOUNTING 101 SPRING 2018 PAGE |2