Inventory turnover measures ________.

the time period for inventory to become obsolete

how rapidly merchandise inventory is purchased

the days' sales in inventory ratio

how rapidly merchandise inventory is sold

Pioneer's adjusted trial balance as of December 31, 2018 is given below:

	Debit	Credit
Cash	$13,000
Accounts Receivable	8,000
Prepaid Rent	7,000
Prepaid Insurance	2,100
Office Supplies	3,300
Land	45,000
Building	57,000
Accumulated DepreciationlongBuilding		$12,000
Equipment	32,000
Accumulated DepreciationlongEquipment		7,500
Accounts Payable		5,500
Salaries Payable		4,500
Interest Payable		2,000
Mortgage Payable (long term)		5,000
Common Stock		14,000
Dividends	5,500
Service Revenue		229,500
Salaries Expense	46,500
Insurance Expense	3,000
Rent Expense	12,500
Utilities Expense	15,500
Advertising Expense	9,700
Depreciation Expenselong Building	10,900
Depreciation Expenselong Equipment	7,900
Supplies Expense	1,100	?????????????????
Total	$280,000	$280,000

Compute the current ratio. (Round your answer to two decimal places.)

A.8.16

B.2.78

C.2.36

D.1.75

Each inventory costing method matches the flow of inventory costs in a business and is used to determine ending inventory and cost of goods sold.

True

False

Refer to the following adjusted trial balance after the first year of operations.

Accounts	Debit	Credit
Cash	$1,900
Accounts Receivable	8,900
Office Supplies	200
Equipment	22,300
Accumulated Depreciation Equipment		$2,000
Accounts Payable		1,000
Salaries Payable		850
Unearned Revenue		400
Common Stock		3,600
Dividends	3,000
Service Revenue		55,150
Salaries Expense	23,000
Supplies Expense	2,000
Depreciation Expense Equipment	1,700	??????????????
Total	$63,000	$63,000

What will the balance of the Retained Earnings account be after the closing entries are posted?

A.$32,050

B.$31,450

C.$28,450

D.$25,450

The key difference in the closing process under the periodic and perpetual inventory systems is how merchandise inventory is handled.

True

False

A merchandiser uses a perpetual inventory system. The beginning Retained Earnings balance of the merchandiser was $95,000. During the year, Sales Revenue amounted to $75,000, Cost of Goods Sold was $30,000, and all other expenses totaled $12,000. The company declared and paid $19,000 as dividends. The last step in the closing process would include ________.

A. a credit to Income Summary for $19,000

B. a debit to the Retained Earnings account for $33,000

C. a debit to Income Summary for $33,000

D. a debit to the Retained Earnings account for $19,000

When inventory costs are declining, which of the following inventory costing method will result in the lowest ending merchandise inventory?

A. last ? in, first?out

B. first? in, first?out

C. weighted?average

D. specific identification

The operating cycle is the process by which companies produce their financial statements for a specific period.

True

False

Complete Electronics Inc. sells a point?of?sale computer with a two?year service contract. Complete collects $1,000 cash for the selling price of the computer and $480 for the two?year service contract. How is revenue recognized?

A. Complete will record Sales Revenue of $1,000 when the computer is delivered and Service Revenue of

$20 per month for 24 months.

B. Complete will record Sales Revenue of $1,480 when the computer is delivered to the customer.

C. Complete will record Sales Revenue of $1,000 when the computer is delivered and will record

revenue for the service contract as service calls are made.

D. Complete will record Sales Revenue of $740 per year for two years.

A balance sheet prepared in the report form lists the assets on the left and the liabilities and stockholders' equity on the right.

True

False

On the balance sheet, Merchandise Inventory is listed above Accounts Receivable.

True

False

Carpenter, Inc. generated sales revenues of $1,400,000 in 2019. Its cost of goods sold amounted to

$560,000. Calculate Carpenter's gross profit percentage.

A.167%

B. 250%

C. 60%

D. 40%

A company purchased inventory for $2,500 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid the shipper $200 cash for freight in. The company then returned damaged goods worth $400. The invoice was then paid eight days after the invoice date. Assuming that there was no beginning inventory balance, the cost of inventory would be ________. (Assume a perpetual inventory system.)

A. $2,450

B. $2,258

C. $2,300

D. $2,058

In a multi?step income statement, interest revenue and interest expense are included in operating income.

True

False

For the year ended December 31, 2019, Davidson Mart had sales of $600,000 and cost of goods sold of

$450,000. Davidson estimates that approximately 33 % of the merchandise sold will be returned. The adjusting journal entry on December 31, 2019, would include a _______.

A. credit to Estimated Returns Inventory for $ 13 comma 500$13,500

B. debit to Cost of Goods Sold for $ 13 comma 500$13,500

C. debit to Sales Revenue for $ 4 comma 500$4,500

D. credit to Refunds Payable for $ 18 comma 000

The accounting principles followed for a $5,000 cost in a small company must be the same as the accounting principles followed for a $5,000 cost in a large company.

True

False

Better Deals, Inc. has 66 units in inventory on December 31. The units were purchased in November for

$165 each. The price lists from the suppliers indicate that the same items would now cost the company a total of

$1,020. What would be the amount reported as ending Merchandise Inventory on the balance sheet?

A. $2,010

B. $335

C. $1,020

D. $990

For all four inventory costing methods, cost of goods sold is always equal to the sum of beginning inventory plus net purchases.

True

False

Reversing entries are ________.

A. required according to GAAP

B. dated the last day of the new period

C. the exact opposite of a prior adjusting entry

D. expensive to record and time consuming

Which of the following is true of a completed worksheet?

A.The total of all the debit columns is equal to the total of all the credit columns.

B.The total debits in the income statement column equal the total debits in the balance sheet column.

C.The total debits in the unadjusted trial balance column equal the total debits in the adjusted trial balance column.

D.The total debits in the income statement column equal the total credits in the balance sheet column.