QUESTION 1

1. Better Buy has six CD players in inventory on December 31. The players were purchased in November for $170 each. Price lists from Better Buy's supplier indicate that the same CD player would now cost the company $175 each. The current sales price for each of the CD players is $320. What would be the amount reported as Inventory on the balance sheet?

	A.	$1,920
	B.	$1,050
	C.	$1,020
	D.	$1,035

QUESTION 2

1. An adjusted trial balance is shown below.

	Debit	Credit
Cash	$12,600
Accounts receivable	2,400
Prepaid rent	800
Inventory	28,000
Accounts payable		$4,200
Salary payable		1,000
Notes payable		800
Capital		13,800
Drawing	1,000
Sales revenue		96,000
Sales returns and allowances	1,600
Sales discounts	400
Cost of goods sold	25,000
Salary expense	21,000
Rent expens	14,000
Depreciation expense	8,500
Supplies expense	500
Total	$115,800	$115,800

2. What will the final balance in Capital be after the closing entries?

	A.	$24,00
	B.	$12,700
	C.	$37,800
	D.	$36,800

QUESTION 3

1. Which of the following assets does a merchandising company, but NOT a service company, need?

	A.	Accounts receivable
	B.	Equipment
	C.	Merchandise inventory
	D.	Prepaid insurance

QUESTION 4

1. A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold 150 units for $45 each from March 1 through December 31. If the company uses the average-cost inventory costing method, what is the amount of ending inventory on December 31?

	A.	$1,500
	B.	$1,250
	C.	$1,000
	D.	$2,250

QUESTION 5

1. Which of the following describes Net sales revenue?

	A.	Sales less Sales discounts
	B.	Sales less Sales discounts less Sales returns and allowances
	C.	Sales less Cost of goods sold
	D.	Sales less Sales returns and allowances

QUESTION 6

1. A high rate of inventory turnover indicates which of the following?

	A.	The company is making high net income.
	B.	The company is losing inventory to shrinkage.
	C.	The company is experiencing a rapid decline in inventory levels.
	D.	The company sells its inventory rapidly.

QUESTION 7

1. A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10, n/30. Which of the following entries would be made to record the payment if it is made within 10 days?

	A.	$20 debit to Inventory, a $1,000 debit to Accounts payable and a $1,020 credit to Cash
	B.	$1,000 debit to Accounts payable and a $1,000 credit to Cash
	C.	$980 debit to Accounts payable, a $20 debit to Inventory and a $1,000 credit to Cash
	D.	$1,000 debit to Accounts payable, a $20 credit to Inventory and a $980 credit to Cash

3.4 points

QUESTION 8

1. Changing from the LIFO (Last-In, First-Out) to specific-identification method of valuing inventory ignores the:

	A.	principle of conservatism.
	B.	principle of consistency.
	C.	principle of disclosure.
	D.	concept of materiality.

QUESTION 9

1. Revenue is $400,000 and Cost of goods sold is $100,000. How much is the gross profit percent?

	A.	40%
	B.	75%
	C.	60%
	D.	25%

QUESTION 10

1. Please refer to the following trial balance.

	Debit	Credit
Cash	$5,000
Accounts receivable	14,000
Inventory	20,000
Supplies	5,000
Land	100,000
Accounts payable		$3,000
Notes payable		25,000
Capital		90,000
Drawing	1,000
Sales revenues		160,000
Sales returns and allowances	2,000
Sales discounts	3,000
Cost of goods sold	80,000
Salary expense	5,000
Utility expense	23,000
Rent expense	18,000
Interest expense	2,000
Totals	$278,000	$278,000

2. How much is the Gross profit percentage?

3.

	A.	50%
	B.	51.6%
	C.	48.4%
	D.	46.8%