QUESTION 11 1. Referring to the following table, what is Net sales revenue? Sales revenue $460,000 Cost of goods sold 300,000 Operating expenses 85,000 Sales discounts 20,000 Sales returns and allowances 15,000 Interest revenue 5,000 2. A. $400,000 B. $455,000 C. $425,000 D. $415,000 QUESTION 12 1. Which of the following states that a company must perform strictly proper accounting ONLY for items that are significant to the business's financial statements? A. Consistency principle B. Disclosure principle C. Accounting conservatism D. Materiality concept QUESTION 13 1. Under which of the following inventory costing methods is the Cost of goods sold based on the cost of the oldest purchases? A. Specific-unit-cost B. Last-In, First-Out C. Average-cost D. First-In, First-Out QUESTION 14 1. Using the perpetual inventory system, discounts taken on an invoice, such as 3/10, n/30, would be: A. debited to Inventory. B. credited to Cost of goods sold. C. debited to Cost of goods sold. D. credited to Inventory. QUESTION 15 1. Beginning inventory is $28,000. Purchases for the year are $110,000. Sales revenues are $180,000. The company's normal gross profit percent is 60%. How much is estimated ending inventory? A. $30,000 B. $246,000 C. $66,000 D. $72,000 QUESTION 16 1. Which of the following requires that financial statements should report the LEAST favorable figures? A. Materiality concept B. Consistency principle C. Accounting conservatism D. Disclosure principle QUESTION 17 1. Which inventory valuation model serves as a middle-of-the-road approach for taxes and income? A. Average-cost B. Specific-unit-cost C. Last-In, First-Out D. First-In, First-Out QUESTION 18 1. What is the difference between a sales return and a sales allowance? A. A sales return reduces the amount receivable from the customer, but an allowance does not. B. A sales return involves an adjustment to Inventory, but a sales allowance does not. C. A sales return requires a debit to Sales returns and allowances, but a sales allowance does not. D. A sales allowance is deducted from Sales revenue to calculate net sales, but a sales return is not. QUESTION 19 1. A company that uses the perpetual inventory system sold $1,000 of goods to a customer on account. Which of the following journal entries correctly records the Sales revenue? A. Cost of goods sold 1,000 Sales revenue 1,000 B. Inventory 1,000 Cost of goods sold 1,000 C. Accounts receivable 1,000 Cash 1,000 D. Accounts receivable 1,000 Sales revenue 1,000 QUESTION 20 1. Which of the following inventory costing methods yields the highest gross profit when costs are rising during the accounting period? A. Specific-unit-cost B. First-In, First-Out C. Average-cost D. Last-In, First-Out