QUESTION 1 Merchandise inventory was mistakenly understated in the current year What is the effect of this error on the current year's financial statements Assets on the balance sheet are understated Cost of goods sold is understated Gross profit is overstated Net income is overstated 1 points QUESTION 2 A company uses the perpetual inventory system and reports the following data Units sold were 15 and 30 units remain in ending inventory What is the cost of ending inventory under the first in, first out (FIFO) method Date Activity Units Cost Sales Cost Available for Sale Cost of Goods Sold Ending Inventory Dec 7 Purchase 10 units $ 3 $ 30 Dec 14 Purchase 20 units $ 6 $120 Dec 15 Sale 15 units $10 $150 Dec 31 Purchase 15 units $ 7 $105 Totals $160 $165 $180 $195 1 points QUESTION 3 What journal entry does a company make to record a cash investment by the owner in exchange for common stock Debits Cash and credits Common Stock Debits Cash and credits Dividends Debits Common Stock and credits Cash Debits Dividends and credits Cash 1 points QUESTION 4 Revenues are $80,000, expenses are $60,000, and dividends are $30,000 What is net income or net loss $10,000 net loss $20,000 net income $30,000 net loss $50,000 net income 1 points QUESTION 5 What financial statement reports a company's financial position by listing the types and amounts of assets, liabilities, and equity at a point in time Balance Sheet Income Statement Statement of Cash Flows Statement of Retained Earnings 1 points QUESTION 6 What are the resources a business owns and controls called Assets Expenses Equity Liabilities 1 points QUESTION 7 Temporary accounts closed at the end of an accounting period include which of the following Assets, dividends, expenses Assets, liabilities, common stock, retained earnings Common stock, liabilities, retained earnings, revenues Dividends, expenses, income summary, revenues 1 points QUESTION 8 Which of the following is the correct entry for closing a company expense accounts Debit Common Stock for total expenses and credit each expense account for its balance Debit each expense account for its balance and credit Income Summary for total expenses Debit each expense account for its balance and credit Retained Earnings for total revenues Debit Income Summary for total expenses and credit each expense account for its balance 1 points QUESTION 9 What inventory system continually updates accounting records for merchandising transactions during the period gross profit method periodic method perpetual method retail method 1 points QUESTION 10 A company sells merchandise to a customer for $1,000 with terms 2 10, n 30 on January 1 What amount of cash will the merchandiser receive if the customer pays within the discount period $800 $980 $1,020 $1,200

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 18, 2024

QUESTION 1 Merchandise inventory was mistakenly understated in the current year. What is the effect of this error on the current year's financial statements? Assets

QUESTION 1

Merchandise inventory was mistakenly understated in the current year. What is the effect of this error on the current year's financial statements?

Assets on the balance sheet are understated.

Cost of goods sold is understated.

Gross profit is overstated.

Net income is overstated.

1 points

QUESTION 2

A company uses the perpetual inventory system and reports the following data. Units sold were 15 and 30 units remain in ending inventory. What is the cost of ending inventory under the first-in, first-out (FIFO) method?

Date	Activity	Units/Cost	Sales	Cost Available for Sale	Cost of Goods Sold	Ending Inventory
Dec. 7	Purchase	10 units @ $ 3 = $ 30
Dec. 14	Purchase	20 units @ $ 6 = $120
Dec. 15	Sale	15 units @ $10 = $150
Dec. 31	Purchase	15 units @ $ 7 = $105
Totals			?	?	?	?

		$160
		$165
		$180
		$195

1 points

QUESTION 3

What journal entry does a company make to record a cash investment by the owner in exchange for common stock?

Debits Cash and credits Common Stock

Debits Cash and credits Dividends

Debits Common Stock and credits Cash

Debits Dividends and credits Cash

1 points

QUESTION 4

Revenues are $80,000, expenses are $60,000, and dividends are $30,000. What is net income or net loss?

$10,000 net loss

$20,000 net income

$30,000 net loss

$50,000 net income

1 points

QUESTION 5

What financial statement reports a company's financial position by listing the types and amounts of assets, liabilities, and equity at a point in time?

Balance Sheet

Income Statement

Statement of Cash Flows

Statement of Retained Earnings

1 points

QUESTION 6

What are the resources a business owns and controls called?

Assets

Expenses

Equity

Liabilities

1 points

QUESTION 7

Temporary accounts closed at the end of an accounting period include which of the following?

		Assets, dividends, expenses
		Assets, liabilities, common stock, retained earnings
		Common stock, liabilities, retained earnings, revenues
		Dividends, expenses, income summary, revenues

1 points

QUESTION 8

Which of the following is the correct entry for closing a company expense accounts?

		Debit Common Stock for total expenses and credit each expense account for its balance
		Debit each expense account for its balance and credit Income Summary for total expenses
		Debit each expense account for its balance and credit Retained Earnings for total revenues
		Debit Income Summary for total expenses and credit each expense account for its balance

1 points

QUESTION 9

What inventory system continually updates accounting records for merchandising transactions during the period?

gross profit method

periodic method

perpetual method

retail method

1 points

QUESTION 10

A company sells merchandise to a customer for $1,000 with terms 2/10, n/30 on January 1. What amount of cash will the merchandiser receive if the customer pays within the discount period?

$800

$980

$1,020

$1,200