1. Question 1 A sales invoice for $1,000 was dated October 4 and carried cash discount terms of 2/10, n/30. How much cash will be received if the invoice is paid on October 13?
2. A.$1,000
3. B.$ 960
4. C.$1,020
5. D.$ 980

2 points

Question 2

1. A classified income statement is also called a multi-step income statement.
2. True
3. False

2 points

Question 3

1. Net sales is calculated by deducting sales discounts and sales returns and allowances from:
2. A.credit sales.
3. B.credit sales less cash sales.
4. C.cash sales.
5. D.gross sales.

2 points

Question 4

1. The "Operating Expenses" section of the classified income statement is typically subdivided into:
2. A.selling expenses and advertising expenses.
3. B.administrative expenses and other expenses.
4. C.selling expenses and administrative expenses.
5. D.selling expenses and other expenses.

2 points

Question 5

1. Net sales is an approximate measure of the assets flowing into a company from its customers.
2. True
3. False

2 points

Question 6

1. Interest expense and interest revenue should be shown under the:
2. A."Non operating Revenues and Expenses" section.
3. B."Cost of Goods Sold" section.
4. C."Operating Revenues" section.
5. D."Operating Expenses" section.

2 points

Question 7

1. The periodic inventory procedure provides tight internal control over inventories by showing at all times the units of merchandise that should be on hand.
2. True
3. False

2 points

Question 8

1. Net sales revenue is equal to:
2. A.Sales - Sales Discounts - Trade discounts - Sales Returns and Allowances.
3. B.Sales - Sales Discounts + Sales Returns and Allowances.
4. C.Revenues + Sales Discounts - Sales Returns and Allowances.
5. D.Sales - Sales Discounts - Sales Returns and Allowances.

2 points

Question 9

1. On November 4, a sale of $1,000 of merchandise was made to a customer on account, with terms of 1/10, n/30. On November 6 the customer returned $200 of merchandise as defective and was given credit. What entry would be used to record receipt of payment by the customer on November 10?
2. A.Cash
3. 792
5. Sales Discounts
6. 8
8. Accounts Receivable
10. 800
12. B.Cash
13. 800
15. Accounts Receivable
17. 800
19. C.Cash
20. 790
22. Sales Discounts
23. 10
25. Accounts Receivable
27. 800
29. D.Cash
30. 800
32. Sales Discounts
33. 200
35. Accounts Receivable
37. 1,000

2 points

Question 10

1. Given the following information, what is the gross margin percentage?
2. Sales
3. $129,400
4. Sales discounts
5. 6,100
6. Sales returns and allowances
7. 4,700
8. Transportation-In
9. 5,900
10. Cost of goods sold
11. 58,800
13. A.55.4%.
14. B.47.8%
15. C.54.6%
16. D.50.4%

2 points

Question 11

1. The difference between an unclassified and a classified income statement is that the classified income statement is:
2. A.shorter.
3. B.simpler.
4. C.sectioned.
5. D.compressed.

2 points

Question 12

1. The Sales Returns and Allowances account is an expense account.
2. True
3. False

2 points

Question 13

1. Inventory turnover is computed by dividing cost of goods sold by the average inventory.
2. True
3. False

2 points

Question 14

1. The lower-of-cost-or-market (LCM) method for pricing ending inventory can be applied using:
2. A.either the unit or the total inventory basis.
3. B.either the class or the total inventory basis.
4. C.either the unit or the class basis.
5. D.either the unit, class, or total inventory basis.

2 points

Question 15

1. A perpetual inventory system provides better control over inventory items than a periodic inventory system.
2. True
3. False

2 points

Question 16

1. Included among the unique advantages of the specific identification method is (are) the ability to:
2. A.be used in situations where all units are identical with no distinguishing features.
3. B.precisely match costs and revenues.
4. C.significantly reduce record keeping costs.
5. D.More than one of the other answers are correct.

2 points

Question 17

1. Inventories should be recorded at cost unless market value is lower.
2. True
3. False

2 points

Question 18

1. When inventory purchase costs change during the accounting period:
2. A.specific identification must be used in order to properly determine the amount of ending inventory.
3. B.the accountant must make an assumption about the flow of costs through the business in order to determine the cost of ending inventory.
4. C.all units in ending inventory should be accounted for at the most recent price paid for the inventory units.
5. D.inventories must be adjusted to reflect increases or decreases in market prices for all units on hand at the end of the period.

2 points

Question 19

1. Generally, inventory cost would include all costs necessary to get goods ready for sale.
2. True
3. False

2 points

Question 20

1. Under FIFO, costs flow through the company as if the oldest goods were the first goods sold.
2. True
3. False

2 points

Question 21

1. The specific identification method's advantages include the company's ability to use this method with:
2. A.little concern for actual prices paid for purchases.
3. B.basically identical units.
4. C.no concern that income will be manipulated.
5. D.items of high value with unique characteristics like automobiles.

2 points

Question 22

1. During several years of constantly rising prices, the Stetson Company used the LIFO method of inventory valuation, the Mott Company used the FIFO method of inventory valuation, and the Smith Company used the weighted-average method of inventory valuation. In which company would the balance sheet figure for inventory be closer to the current replacement cost of the merchandise on hand?
2. A.Mott Company
3. B.Smith Company and Mott Company would be similar in this regard.
4. C.Smith Company
5. D.Stetson Company

2 points

Question 23

1. The sale of merchandise under the perpetual inventory procedure results in a debit to Cost of Goods Sold.
2. True
3. False

2 points

Question 24

1. If inventory was substantially destroyed by a fire, which of the following methods would be most useful in filing a claim with the insurance company?
2. A.Periodic inventory procedure
3. B.Gross margin method
4. C.Specific identification method
5. D.Value of the insurance policy method

2 points

Question 25

1. Items of high value with unique characteristics (and/or serial numbers) often are inventoried using:
2. A.last-in, first-out (LIFO).
3. B.specific identification.
4. C.first-in, first-out (FIFO).
5. D.weighted-average.

2 points

Question 26

1. In The Profit's Inventoryclips video,the new inventory system at Unique Salon writes down products that are used and also scans the products for re-ordering.
2. True
3. False

2 points

Question 27

1. In The Profit's Inventoryclips video,what percentage of Unique Salon's revenue comes from color?
2. 70%
3. 30%
4. 50%
5. 80%

2 points

Question 28

1. In The Profit's Inventoryclips video,which company hasn't done an inventory in three years?
2. Worldwide Trailers
3. Unique Salons
4. West End Coffee
5. Planet Popcorn

2 points

Question 29

1. In The Profit's Inventoryclips video, Worldwide Trailers is missing how much in inventory?
2. $50,000
3. $80,000
4. $100,000
5. $0

2 points

Question 30

1. In The Profit's Inventoryclips video,which company doesn't put product on the shelf because the product disappears and there is no inventory system in place?
2. Worldwide Trailers
3. Coffee
4. Fred's
5. Unique Salon