Assume that the net price method of recording purchases is used and the business uses the perpetual method of inventory recording.Record the purchase of goods for $4,000 on credit, on terms of 2/10, n/30.Ignore GST.

Select one:

a.Debit Inventory $3,920; credit Accounts payable $3,920

b.Debit Purchases $4,000; credit Accounts payable $3,920; credit discount allowed $80.

c.Debit Inventory $4,000; credit Accounts payable $4,000

d.

Debit Inventory $3,920; Debit Discount Allowed $80:credit Accounts payable $4,000

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Arizona sells toys. At the beginning of April 100 trains 168H were on hand for which the firm had paid $10 each. Purchases and sales for the month were:

DatePurchasesUnit CostSales

unitsunits

April 3120$11

10150$12

29180

If Arizona uses a periodic system with a LIFO cost flow assumption April's cost of sales for the 168H trains is:

Select one:

a.$2130

b.$2020

c.$2160

d.$1880

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The primary purpose of (cash) settlement discounts is to:

Select one:

a.Facilitate the quoting of prices to different customer groups

b.Encourage the customer to settle their account early

c.Convince the customer to buy the goods on credit

d.Reduce the invoice price of the goods

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Florida Inc uses a periodic inventory system with the weighted average method of cost assignment. The following data are available:

DateUnitsUnitCostTotal

Cost

Beginning InventoryJan 12000$6$12000

PurchaseMar 134000$7$28000

PurchaseJune 206000$8$48000

Ending InventoryDec 311000

The cost of the ending inventory to the nearest dollar is:

Select one:

a.$8333

b.$8000

c.$7300

d.$6000

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Kappa uses the FIFO assumption with the periodic inventory method.

UnitsUnitTotal

CostCost

Beginning Inventory10$10$100

Purchase10$12$120

Purchase8$9$72

Sales during year were 14 units.What was the value assigned to the closing stock of this item at the end of the period?

Select one:

a.$144

b.$98

c.$84

d.$108

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Under the perpetual inventory system inventory purchased is debited to which account?

Select one:

a.Purchases

b.Current assets

c.Prepaid expenses

d.Inventory

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Under IAS 2the costing method that isnotpermitted is:

Select one:

a.LIFO

b.Weighted/moving average

c.Specific identification

d.FIFO

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Sales Returns and Allowances is what type of account?

Select one:

a.Contra to sales revenue

b.Liability

c.Expense

d.Contra to an asset

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Simon sold goods to Lauren for $3,300 including GST.Lauren paid her account within the discount period and received a settlement discount of 2%.Using the gross method the entry in Simon's books to record the payment from Lauren is

Select one:

a.Debit bank $3,234, debit discount allowed $66, debit GST collections $6; credit accounts receivable $3,306

b.Debit bank $3,234, debit discount allowed $60, debit GST collections $6; credit accounts receivable $3,300

c.

Debit bank $3,234, debit discount allowed $66; credit accounts receivable $3,300

d.Debit bank $3,240, debit discount allowed $60; credit accounts receivable $3,300

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These are the purchases and sales of Commodity C during the month of August. A perpetual inventory system is used.

Balance on hand 1 August: 10 units @ $10 each.

Purchases:

Aug 310 units @ $12

Aug 126 units @ $13

Aug 2512 units @ $10

Sales:

Aug 714 units

Aug 2710 units

The value of the stock of Commodity C at 31 August using the FIFO method of costing inventory is:

Select one:

a.$140

b.$182

c.$168

d.$146