Question 5

Not yet answered

Points out of 1

Flag question

Question text

Under the perpetual inventory system, the journal entries to record sales returns (the original sale was on account) would be:

Select one:

a.

Accounts Receivable	XX
Sales		XX
Sales	XX
Cost of Goods Sold		XX

b.

Accounts Payable	XX
Merchandise Inventory		XX
Merchandise Inventory	XX
Cost of Goods Sold		XX

c.

Sales Returns and Allowances	XX
Accounts Receivable		XX
Merchandise Inventory	XX
Cost of Goods Sold		XX

d.

Cost of Goods Sold	XX
Merchandise Inventory		XX
Merchandise Inventory	XX
Accounts Payable		XX

Question 6

Not yet answered

Points out of 1

Flag question

Question text

Gross profit represents the mark-up on ________.

Select one:

a. transportation cost

b. sales revenue

c. operating expenses

d. merchandise inventory

Question 7

Not yet answered

Points out of 1

Flag question

Question text

Refer to the following trial balance.

	Debit	Credit
Cash	$16,000
Accounts Receivable	42,000
Merchandise Inventory	62,000
Supplies	15,000
Land	330,000
Accounts Payable		$2,000
Notes Payable		25,000
Common Stock		296,000
Retained Earnings		24,000
Dividends	6,000
Sales Revenue		480,000
Sales Returns and Allowances	9,000
Sales Discounts	8,000
Cost of Goods Sold	200,000
Salaries Expense	17,000
Utilities Expense	65,000
Rent Expense	53,000
Interest Expense	4,000	________
Totals	$827,000	$827,000

How much is the net sales revenue?

Select one:

a. $479,000

b. $463,000

c. $141,000

d. $145,000

Question 8

Not yet answered

Points out of 1

Flag question

Question text

Which of the following is subtracted from net sales revenue to arrive at gross profit on a multi-step income statement?

Select one:

a. operating expenses

b. cost of goods sold

c. sales discounts and sales returns and allowances

d. cost of goods available for sale

Question 9

Not yet answered

Points out of 1

Flag question

Question text

Calculate the cost of goods sold for a merchandiser using the periodic inventory system from the following details.

Purchases	$510,000
Beginning Merchandise Inventory	175,000
Purchase Returns and Allowances	50,000
Purchase Discounts	12,000
Freight In	18,000
Ending Merchandise Inventory	160,000

Select one:

a. $481,000

b. $510,000

c. $801,000

d. $499,000

Question 10

Not yet answered

Points out of 1

Flag question

Question text

A merchandiser purchased inventory on account for $10,000. Under the periodic inventory system, the journal entry to record the purchase would include ________.

Select one:

a. a debit to Purchases for $10,000 and a credit to Accounts Payable for $10,000

b. a debit to Accounts Payable for $10,000 and a credit to Purchases for $10,000

c. a debit to Merchandise Inventory for $10,000 and a credit to Accounts Payable for $10,000

d. a debit to Accounts Payable for $10,000 and a credit to Merchandise Inventory for $10,000

Question 11

Not yet answered

Points out of 1

Flag question

Question text

Which of the following states that the business should use the same accounting methods from period to period?

Select one:

a. consistency principle

b. materiality concept

c. conservatism

d. disclosure principle

Question 12

Not yet answered

Points out of 1

Flag question

Question text

Which of the following inventory costing methods requires the calculation of a new average cost after each purchase?

Select one:

a. weighted-average

b. specific identification

c. last-in, first-out

d. first-in, first-out

Question 13

Not yet answered

Points out of 1

Flag question

Question text

A company that uses the perpetual inventory system sold goods to a customer on account for $2,100. The cost of the goods sold was $1,050. Which of the following journal entries correctly records this transaction?

Select one:

a.

Accounts Receivable	2,100
Sales Revenue		2,100
Costs of Goods Sold	1,050
Merchandise Inventory		1,050

b.

Accounts Receivable	2,100
Cash		2,100
Costs of Goods Sold	1,050
Merchandise Inventory		1,050

c.

Merchandise Inventory	2,100
Costs of Goods Sold		2,100

d.

Cost of Goods Sold	2,100
Sales Revenue		2,100

Question 14

Not yet answered

Points out of 1

Flag question

Question text

A company purchased 110 units for $30 each on January 31. It purchased 200 units for $25 each on February 28. It sold 200 units for $50 each from March 1 through December 31. If the company uses the first-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

Select one:

a. $8300

b. $5000

c. $5550

d. $3300

Question 15

Not yet answered

Points out of 1

Flag question

Question text

Which of the following remains the same regardless of the inventory costing method used by a company? Assume the cost of inventory is rising.

Select one:

a. cost of goods sold

b. purchases

c. net income

d. ending merchandise inventory

Question 16

Not yet answered

Points out of 1

Flag question

Question text

Which of the following inventory valuation methods minimizes income tax expense during a period of rising inventory costs?

Select one:

a. weighted-average

b. last-in, first-out

c. specific identification

d. first-in, first-out

Question 17

Not yet answered

Points out of 1

Flag question

Question text

Ending inventory for the current accounting period is overstated by $2,700. What effect will this error have on Cost of Goods Sold and Net Income for the current accounting period?

Select one:

a.

Cost of Goods Sold	Net Income
Understated	Overstated

b.

Cost of Goods Sold	Net Income
Understated	Understated

c.

Cost of Goods Sold	Net Income
Overstated	Understated

d.

Cost of Goods Sold	Net Income
Overstated	Overstated

Question 18

Not yet answered

Points out of 1

Flag question

Question text

Which of the following is the correct formula to calculate inventory turnover?

Select one:

a. Inventory turnover = Cost of goods sold Average merchandise inventory

b. Inventory turnover = Cost of goods sold + Average merchandise inventory

c. Inventory turnover = Cost of goods sold / Average merchandise inventory

d. Inventory turnover = Cost of goods sold - Average merchandise inventory

Question 19

Not yet answered

Points out of 1

Flag question

Question text

Which of the following amounts could differ if a company, using the LIFO inventory costing method, shifts from a periodic inventory system to a perpetual inventory system?

Select one:

a. ending merchandise inventory

b. purchases

c. sales revenue

d. purchase returns

Question 20

Not yet answered

Points out of 1

Flag question

Question text

A company uses the weighted-average method of inventory valuation under a periodic inventory system. The company began the year with a zero inventory balance. They had the following transactions during the year. 1. Purchased 64 units at $5 per unit 2. Purchased 110 units at $5 per unit 3. Sold 90 units at $10 per unit 4. Purchased 55 units at $6 per unit 5. Sold 90 units at $13.50 per unit At the end of the year, the company counted the inventory and found 49 units remaining. Calculate the cost of goods sold for the year. (Round the unit costs to two decimal places and total costs to the nearest dollar.)

Select one:

a. $5

b. $257

c. $943

d. $1,200