On July 2, we purchased merchandise on account for $15,000 with credit terms of 2/10, n/30. On July 5, we returned $3,000 of the merchandise inventory. On July 10, we paid the amount due. We use the perpetual inventory method. The journal entry to reflect the payment will include (select all that apply):

Question 1 options:

	A credit to Purchase Discounts of $240.
	A credit to Merchandise Inventory of $240.
	A credit to Cash of $12,000.
	A debit to Accounts Payable of $11,760.
	A debit to Accounts Payable of $15,000.
	A debit to Accounts Payable of $12,000.
	A debit to Sales Discounts of $240.
	A credit to Cash of $11,760.

On May 2, we sell merchandise on account for $10,000 with credit terms of 3/10, n/90. On May 10, we receive the amount due. We use the periodic inventory method. The journal entry to reflect the receipt will include (select all that apply):

Question 2 options:

	A credit to Sales Discounts
	A debit to Sales Discounts
	A credit to Cash
	A credit to Sales
	A credit to Accounts Receivable
	A debit to Cash
	A debit to Accounts Receivable
	A debit to Sales

Based on the following data, the amount of gross profit reported on a multi-step income statement would be:

Sales	$360,000
Sales Returns	20,000
Cost of Goods Sold	150,000
Selling Expenses	40,000
Admin. and General Expenses	80,000

Your Answer:

Question 3 options:

Answer

Elvis Co. purchased merchandise with terms of 2/10, n/30, FOB shipping point. Elvis Co. uses the perpetual inventory system. When Elvis Co. records the freight chargers it will:

Question 4 options:

A)	Decrease Merchandise Inventory

B)	Increase Freight-in.

C)	Do nothing because the freight charges are the seller's responsibility.

D)	Increase Merchandise Inventory

E)	Do nothing because the freight charges are the purchaser's responsibility.

The Shania Company December 31, 2015, balance sheet contains the following. The company's quick ratio (this is not the same as the current ratio) to the nearest tenth is, _____ to 1.

Cash	$8,000
Account Receivable	12,000
Inventory	20,000
Equipment	60,000
Accumulated Depreciation	20,000
Accounts Payable	8,000
Salaries Payable	2,000
Notes Payable, due in 20 days	10,000
Mortgage Note Payable, due in 15 years	20,00
Twain, Capital	40,000

The periodic inventory system is used. A physical inventory at the end of the year shows $17,000 of merchandise inventory on hand. The account balances at the end of the year for selective accounts follow:

Merchandise Inventory (beginning)	$20,000
Purchase Discounts	$ 2,000
Purchase Returns and Allowances	$ 4,000
Purchases	$200,000
Transportation-In	$ 3,000

What is Cost of Goods Sold (COGS) for the period?

Your Answer:

Question 6 options:

Answer