A method of allocating merchandise cost requiring each item sold and each item remaining in inventory to be separately identified with respect to its purchase cost is called the?

a.last-in, first-out method.

b.first-in, first-out method.

c.specific identification method.

d.weighted-average method.

Costs of goods sold may include all of the following EXCEPT?

a.insurance.

b.manufacturing costs.

c.shipping costs.

d.management salaries.

Which of the following indicates that the purchaser will pay the transportation costs?

a.4/10, EOM

b.FOB destination

c.FOB shipping point

d.COD

Which of the following indicates that the seller must pay all transportation costs?

a.FOB shipping point

b.4/10, EOM

c.COD

d.FOB destination

Sales Returns and Allowances is debited for the selling price, including sales tax, of any merchandise returned by customers?

True

False

The inventory system whereby the merchandise inventory account balance is merely a record of the most recent physical inventory count is called?

a.periodic.

b.perpetual.

c.LIFO.

d.FIFO.

When merchandise is acquired on account and the perpetual system of inventory is used, the journal entry for the purchase would include?

a.debiting Accounts Payable and crediting Merchandise Inventory.

b.debiting Accounts Payable and crediting Purchases.

c.debiting Purchases and crediting Accounts Payable.

d.debiting Merchandise Inventory and crediting Accounts Payable.

Sales Tax Payable is a liability account?

True

False

A method of allocating merchandise cost that assumes the first merchandise bought was the first merchandise sold is called the?

a.last-in, first-out method.

b.specific identification method.

c.average cost method.

d.first-in, first-out method.

If the seller permits merchandise to be returned or an allowance to be made, it is customary for the seller to issue a(n)?

a.debit memorandum.

b.return memorandum.

c.allowance memorandum.

d.credit memorandum.

A method of allocating merchandise cost that assumes the sales in the period were made from the recently purchased merchandise and its earliest merchandise bought remains in the inventory is called the?

a.last-in, first-out method.

b.specific identification method.

c.first-in, first-out method.

d.weighted-average method.

If any merchandise has been returned, the sales discount is calculated on the net sales amount?

True

False

A method of allocating merchandise cost that is based on the average cost of identical units is called the?

a.last-in, first-out method.

b.weighted-average method.

c.first-in, first-out method.

d.specific identification method.

Which of the following credit terms allows a discount of 2% if payment is made within 10 days with the total amount of the invoice due within 60 days?

a.2/10, n/60

b.10/2, n/60

c.2/10, n/30

d.2/10, EOM/60

The terms on an invoice are 4/15, n/30. This means that?

a.a discount of 4% will be allowed if payment is made by the 15th of the month.

b.a discount of 15% will be allowed if payment is made by the 4th day after the date of the invoice.

c.a discount of 15% will be allowed if payment is made with 4 days from the date of the invoice.

d.a discount of 4% will be allowed if payment is made within 15 days from the date of the invoice.

Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The sales account should be credited for?

a.$90.00.

b.$93.60.

c.$95.40.

d.$84.60.

Which of the following accounts is NOT used to account for merchandise sales transactions?

a.Sales Tax Payable

b.Sales

c.Sales Returns and Allowances

d.Accounts Payable