exercise1-25

1. A company's net sales were 5676,600, its cost of goods sold was $236,810 and its net profit was 533,750. Its gross margin ratio equals: Multiple Choice (4 Points) A.5" B.35% C.9.6% 0.65% 2. Axmo Corporation uses a weighted- average perpetual inventory system, August 2, 10 units were purchased at $12 per unit. August 18, 15 units were purchased at $14 por u nit. August 29, 12 units were sold. What was the amount of the cost of goods sold for this sale? Multiple-Choice (4 Points) A. $148.00 B. $150.50 C. $210.00 D. $158.40 3. A company had net sales of $31,500 and ending accounts receivable of $2,700 for the current period. Its days' salos uncollected equals: Multiple-Choice (4 Points) A. 23. 3 days O 8.313 days C.11.7 days D.425 days 4. A company has inventory of 10 units at a cost of $10 each on June 1. On June 3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO perpetual inventory method, what is the cost of the 12 units that were sold? Multiple-Cholo (4 points) A 5124 B. 5120 C. $128 D$130 -Ch05-07 Progress: 1/25 5. Tepsi's accounts receivable turnover was 9.9 for this year and 11.0 for last year. Craig's turnover was 9.3 for this year and 9.3 for last yo ar. These results imply that: Multiple-Choloo (4 Points) A. Craig has the better turnover for both years. B. Tepsi has the better tumover for both years. C. Craig's credit policies are too loose D. Craig's turnover in improving 6. Damaged and obsolete goods that can be sold: Multiple-Choice (4 Points) CA Are included in inventory at their full cost. B. Are never counted as inventory C. Should be disposed of immediately D. Are included in inventory at their not realizable value 7. A buyer failed to take advantage of the vendor's credit terms of 2/15, n/45, but instead paid the invoice in full at the end of 60 days. By n of taking advantage of the cash discount, the buyer lost the equivalent of annual interest on the amount of the purchase. Multiple-Choice (4 Points) A. 18.9% B. 12.2% C. 16.2% D. 24.3% 8. I a check correctly written and paid by the bank for $794 is incorrectly recorded in the company's books for $749, how should this error b e treated on the bank reconciliation? Multiple-Choice (4 Points) A. Add 45 to the book balance B. Add $45 to the bank's balance C. Subtract 845 from the bank's balance. D. Subtract $45 from the book balance, 9. A company borrowed $10,000 by signing a 180-day promissory note at 11%. The maturity value of the note is: Multiple-Choice (4 Points) A. $12,050 B. $12.825 C. $10,550 D. $12,275 10. Teller purchased merchandise from Tech Com on October 17 of the current year and Tech om accepted Teller's $4,800, 90- day, 10% note. What entry should Tech Com make on January 15 of the next year when the note is paid? Multiple-Choice (4 Points) A. Doble Notes Receivable 54,800; debit Interest Receivable $120, credit Sales 84,920. B. Debit Cash $4,920: Credit Notes Receivable $4,920. C. Debit Cash $4.920: credit interest Revenue $20; credit Interest Receivable $100 Credit Notes Receivable $ 4.800 D. Debit Cash $4,920: credit Interest Revenue $100; credit interest Receivable $20, credit Notes Receivable $ 4,800 Ch05-07 Progress: 1/25 11. At the end of the day, the cash register's record shows $1,250, but the count of cash in the cash register is $1.245. The correct entry tor ecord the cash sales is Multiple-Cholco (4 points) A. Debit Cash 1.245. Credit Sales1,245. B. Debit Cash 1.250;credit Salex1,245, Credit Cash Over and Short $5. C. Debit Cash 1.250;creditSales1,250 D. Debit Cash 1,245, dehitCashOverand Short5 credit Sales $1,250. 12. The inventory valuation method that results in the lowest taxable profit in a period of inflation is: Multiple-Choice (4 Points) A Weighted-average cost method B. Specific dentification method C. FIFO method D.LIFO method 13. Tops had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory turnover of $1,965 million. Its da ys' sales in inventory equals days. Multiple-Choice (4 Points) A 809 B.4.79 0.4.51 D. 0.21 Progress: 1/25 14. A company normally sells its product for $20 per unit. However, the selling price has fallen to $15 per unit. This company's current invent ory consists of 200 units purchased at $16 per unit. Net realizable value has now fallen to $13 per unit Calculate the value of this compa ny's inventory at the lower of cost and not realizable value. Multiple-Choice (4 Points) B.62,700 C.$2,800 A $3.000. D. $2.550 15. A company factored $45,000 ot its accounts receivable and was charged a 3% factoring too. The journal entry to record this transaction would include a: Multiple-Choice (& Points) A Debt to Cath of $40,350 and a credit to Account Receivable of $46,350 B. Debit to Cath of $45,000 and a credt to Accounts receivable of 45,000 C. Dobit to Coah of $45,000, a dobit to Factoring Foo expense of $1,350, and credit to Accounts Receivable of $43,650 D. Debit to Cash of $43,660, a debit to Factoring Foo Expanse of 1.350, and a credit to Accounts Receivable of $45,000 16. The amount due on the maturity date of a $6,000, 60-day 8%, note receivable is: Multiple-Choion (4 Points A 55,520 B. 58.480 CS5.080 D. 56.000 h05-07 Progress 125 17. During the month of September, Norris Industries issued a check in the amount of $845 to a supplier on account. The check cleared the bank during September. The disbursement was recorded incorrectly as $854. The journal entry to correct this mistake when discovered will include: Multiple-Choico (4 Points) A. A credit to Accounts Payable for $9. B.Adobe to Accounts Payable for $454 C. A credit to Cash for 5854 D. A credit to Cath for 80 18. Goods in transit are included in a purchaser's inventory: Multiple-Choice (4 Points) A. Ater the hall way point between the buyer and seler But the goods are shipped FOB destination C. When the supplier is responsible for freight charges D. When the purchaser is responsible for paying freight charges 19. The credit terms 2/10,n/30 are interpreted as: Multiple-Choice (4 Points) A 30% discount it paid within 2 days B. 90% discount it paid within 10 days. C10% cash discount if the amount is paid within 2 days, or the balance due in 30 days. D.2% cash discount if the amount is paid within 10 days, or the balance due in 30 days 20. Beginning inventory plus not purchases is: Multiple-Choico (4 Ponts A Cost of goods old B Sales Ending inventory D. Marchandise available for sale 21. A 90-day note issued on April 10 matures on Multiple-Choice (4 Point) A. Jun 11 B. Juty 12 CCM D. Buy 10 22. The current period's ending inventory is: Matple-Choice ( Points) A. The current period's cost of goods sold The current period's beginning wentary C. The prior periods beginning inventory D. The next period's beginning inventory 05-07 Progress: 1/25 23. The understatement of the beginning inventory balance causes: Multiple-Choice (4 points) A Cost of goods sold to be overstated and not profit to be understated, B.Cont of goods sold to be understated and not profit to be overstated. C. Cost of goods sold to be understated and not profit to be understand. D. Cost of goods sold to be overstated and net profit to be overstated. 24. A company that uses the net method of recording invoices made a purchase of $400 with terms of 2/10, 1/30. The entry to record the pur chase would include: Multiple-Cholo (4 points) A. A credit to Cash for $392 B. A debit to Discounts Lost for $8 C. A debit to Merchandise Inventory for $392. D. A credit to Discounts Lost for $8. 25. Dart reported net sales of $8,739 million and average accounts receivable of $864 million. Its accounts receivable turnover is: Multiple-Choice (4 Points) A 500 B. 10.1 C. 0.90 D. 36.1