Question Completion Status: Take rest. mventory signment Test Information Description Complete this assignment and submit it for grading when you are finished. If you intend to work on this assignment on more than one occasion, be sure to save your answers at the end of each session. Do not submit until your last session this assignment can only be submitted once Reading Assignment: Sections 1-3 (gray book) Instructions Multiple Attempts Force Completion Not allowed. This test can only be taken once. This test can be saved and resumed later. Your answers are saved automatically. QUESTION 1 ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB shipping point. If both companies use a perpetual inventory system, which company records the transportation, and which account is debited to record the amount of the transportation? XYZ records with a debit to Freight-In XYZ records with a debit to Delivery Expense ABC records with a debit to Freight-In ABC records with a debit to Delivery Expense ABC records with a debit to Merchandise Inventory XYZ records with a debit to Merchandise Inventory QUESTION 2 Under the periodic method, the year-end adjusting entry for inventory affects: only the income statement. only the balance sheet. Oboth the income statement and the balance sheet 2 points Saved 2 points Saved QUESTION 3 2 points Saved Your company purchases $10,000 of inventory 2/10, n/30. At the time of purchase, your firm debits Inventory for $10,000 and credits Account Payable for $10,000. If your company pays for the merchandise before the discount period lapses, you will Odebit Purchase Discounts for $200. credit Inventory for $200. debit Account Payable for $9,800. credit Purchase Discounts for $200. debit Purchase Discounts Lost for $200 QUESTION 4 If your company uses the periodic method, you record a sale on account by: debiting Sales and crediting Account Receivable only, you do not make an entry to update Inventory. Odebiting Account Receivable crediting Sales in entry 1; debiting COGS and crediting Inventory in entry 2 debiting Account Receivable and crediting Sales only: you do not make an entry to update Inventory. debiting Account Receivable and crediting Sales in entry 1; debiting COGS and crediting Purchases in entry 2. QUESTION 5 ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB destination. If both companies use a perpetual inventory system, which company records the transportation, and which account is debited to record the amount of the transportation? OXYZ records with a debit to Merchandise Inventory ABC records with a debit to Freight-In XYZ records with a debit to Delivery Expense OXYZ records with a debit to Freight-In ABC records with a debit to Merchandise Inventory ABC records with a debit to Delivery Expense QUESTION 6 AcmeCo purchased inventory for $10,000, 2/10, n/30. At the time of purchase, Acme Co debited Purchases for $9,800 and credited Account Payable for $9,800. If AcmeCo pays for the merchandise after the discount period has lapsed, they will: Odebit Inventory for $200. debit Purchase Discounts Lost for $200. credit Purchase Discounts Lost for $200 debit Accounts Payable for $10,000. Ocredit Inventory for $200 QUESTION 7 Big-Co, which uses the periodic method and records purchases at net, has beginning inventory of $200,000. Big-Co's data for 20X1 includes the following: Purchases Freight-in Purchase discounts lost $150,000 8,000 7.000 Purchase retums If Big-Co's ending inventory is $110,000, what is the amount of COGS in the 20X1 year-end adjusting journal entry? $232,000 $240,000 $233,000 $226,000 $343,000 2 points Saved 2 points Saved 2 points Saved 2 points Saved QUESTION 8 2 points Saved BendCo, which uses the periodic method, purchases inventory for $2,500 cash. What is the journal entry to book the return of goods for $600 cash? Odebit Cash; credit Cost of Goods Sold debit Cash; credit Purchase Returns and Allowances Odebit Cash; credit Sales debit Cash; credit Merchandise Inventory QUESTION 9 2 points Saved ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB destination. If both companies use a periodic inventory system, which company records the transportation, and which account is debited to record the amount of the transportation? OXYZ records with a debit to Merchandise Inventory ABC records with a debit to Freight-In ABC records with a debit to Delivery Expense ABC records with a debit to Merchandise Inventory XYZ records with a debit to Freight-In OXYZ records with a debit to Delivery Expense QUESTION 10 your firm debits Your company purchases $10.000 of inventory, the merchandise hate the discount new Purchases for $10,000 and credits Account Payable for $10,000. If your o 2/10, n/30. At the time of purch pays for t you will debit Purchase Discounts for $200. debit Purchase Discounts Lost for $200. credit Inventory for $200. debit Accounts Payable for $9,800. credit Purchase Discounts for $200. QUESTION 11 If a company uses the periodic method, which of the following accounts should have a zero balance after the end-of-period adjusting entry is made? Freight-in Beginning Inventory Purchase Returns All of the above should have a zero balance after the adjusting entry is made. None of the above (they should all have a dollar balance after the adjusting entry is made) QUESTION 12 ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB destination. If ABC uses a periodic inventory system, the entry required to purchase the inventory at gross would include a debit to Purchases for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 a debit to Merchandise Inventory for $10,000 and a credit to Account Payable for $10,000 a debit to Purchases for $10,000 and a credit to Account Payable for $10,000 a debit to Purchases for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 a debit to Merchandise Inventory for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 a debit to Merchandise Inventory for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 2 points Saved 2 points Saved 2 points Saved QUESTION 13 The following account balances appear on a year-end trial balance: Merchandise Inventory, $65,000; $600,000; Freight-in, St 0; Sales R 2 points Saved Returns and Alancer $2000 and Purchase Retums and i you; Po0.000, Sales, $4.000. Ending inventory is $45,000. What is the cost of goods sold? $234,500 $325.500 $867,500 $874,500 $318,500 $274,500 QUESTION 14 In its first year, FiCo, which uses the perpetual method and records purchases at net, buys two lots of sweaters, both have terms of 1/10, n/30. One lot was purchased on March 10 for $4,000, paying the invoice on March 16. A second lot was purchased on June 25 for $2,000, paying the invoice on July 9. If no sweaters are sold from March through July, what is the balance in FiCo's Inventory account on July 317 $5,940 $6,000 $5,980 $5,960 QUESTION 15 Your company, which uses the perpetual method, sells inventory on account for $15,000. If the cost of the inventory is $9,000, you will O credit Inventory for $9,000. debit COGS for $9,000. credit Sales Revenue for $15,000. debit Account Receivable for $15,000 all of the above 2 points 2 points Saved QUESTION 16 inventory for AameCo purchased in 2 points Saved o debited Inventory for $9,800 and credited y for $10.000, 2/10, 30. At the time of purchase, A Account Payable for $9,800. If AcmeCo pays for the merchandise after the discount period has lapsed, they will: debit Purchase Discounts Lost for $200. Odebit Inventory for $200. credit Purchase Discounts Lost for $200 debit Accounts Payable for $10,000. credit Inventory for $200 QUESTION 17 Your company, which uses the perpetual method, does a year-end physical count of inventory. If there has been shrinkage, the adjustment will include: a credit to an income statement account. a credit to a liability account Oa debit to a liability account. O a debit to an asset account. a credit to an asset account. QUESTION 18 recorded $10,000 of merchandise on account from XYZ Company, terms are 3/10, n/30, FOB destination. If ABC ABC Company Coperiod." the purchase at gross and the invoice is not paid within the discount p d, which of the following statements is true? ABC would need to record the $300 lost discount as a debit to the Discount Lost account ABC would record the payment with a debit to Account Payable for $10,000 and a credit to cash for $10,000 if they use the perpetual method (the entry would be different if they use the periodic method) ABC would need to record the $300 lost discount as a credit to the Discount Lost account ABC would record the payment with a debit to Account Payable for $10,000 and a credit to cash for $10,000 if they use the periodic method (the entry would be different if they use the perpetual method) ABC would record the payment with a debit to Account Payable for $10,000 and a credit to cash for $10,000 regardless of the inventory method they use (perpetual of periodic) QUESTION 19 ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30. Assume both companies use a perpetual inventory system and the buyer recorded the purchase at gross. If the invoice is paid within the discount period, how is the payment recorded by each company? ABC debits Account Receivable for $9,700; XYZ credits Account Payable for $10,000 ABC debits Account Payable for $9,700; XYZ credits Account Receivable for $10,000 ABC debits Account Payable for $9,700; XYZ credits Account Receivable for $9,700 ABC debits Account Payable for $10,000; XYZ credits Account Receivable for $10,000 ABC debits Account Receivable for $9,700; XYZ credits Account Payable for $9,700 ABC debits Account Receivable for $10,000; XYZ credits Account Payable for $10,000 2 points Saved 2 points Saved 2 points Saved QUESTION 20 2 points Saved Your firm, which uses the perpetual method, purchases $10,000 of inventory, 2/10, n/30. At the time of purchase, you debit Inventory for $9,800 and credit Account Payable for $9,800. If the merchandise is paid for within the discount period, you will: credit Inventory for $200 debit Account Payable for $10,000 debit Account Payable for $9,800 Odebit Purchase Discounts Lost for $200 Ocredit Purchase Discounts Lost for $200 Ocredit Purchase Discounts for $200 QUESTION 21 2 points Saved Your company, which uses the perpetual method, purchases inventory for $7,000 on account. Before paying the invoice, your firm returns damaged goods for a $650 credit. What is the joumal entry to record this return? Odebit Cost of Goods Sold; credit Inventory debit Purchase Returns and Allowances; credit Accounts Payable debit Accounts Payable; credit Inventory debit Accounts Payable; credit Cost of Goods Sold debit Accounts Payable; credit Purchase Returns and Allowances QUESTION 22 2 points Saved Merchandise on hand at the end of the year (i.e. ending inventory) appears on the balance sheet as a current asset. The cost of the merchandise sold during the year appears on the income statement as an expense. True False QUESTION 23 ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB destination. If ABC uses a periodic inventory system, the entry required to purchase the inventory at net would include: a debit to Purchases for $9,700 and a credit to Account Payable for $9,700 a debit to Merchandise Inventory for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 a debit to Merchandise Inventory for $9,700 and a credit to Account Payable for $9,700 a debit to Merchandise Inventory for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 a debit to Purchases for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 a debit to Purchases for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 QUESTION 24 ABC Company purchased $15,000 of merchandise on account from XYZ Company; terms are 1/15, nieom, FOB shipping point. Assume both companies use a perpetual inventory system and the buyer recorded the purchase at gross. If the invoice is paid within the discount period, how is the discount recorded by each company? ABC debits Purchase Discounts; XYZ credits Sales Discounts ABC debits Sales Discounts; XYZ credits Merchandise Inventory ABC credits Purchase Discounts; XYZ debits Sales Discounts ABC debits Sales Discounts; XYZ credits Purchase Discounts ABC credits Merchandise Inventory; XYZ debits Sales Discounts ABC debits Merchandise Inventory; XYZ credits Sales Discounts 2 points Saved 2 points Saved QUESTION 25 2 points ABC Company purchased $10 $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB destination. If ABC uses a perpetual inventory system, the entry required to purchase the inventory at gross would include: a debit to Purchases for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 a debit to Merchandise Inventory for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 a debit to Merchandise Inventory for $10,000 and a credit to Account Payable for $10,000 a debit to Merchandise Inventory for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 a debit to Purchases for $10,000 and a credit to Account Payable for $10,000 a debit to Purchases for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 QUESTION 26 2 points ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB shipping point. If both amount of the transportation? companies use a periodic inventory system, which company records the transportation, and which account is debited to record the ABC records with a debit to Merchandise Inventory ABC records with a debit to Delivery Expense ABC records with a debit to Freight-In XYZ records with a debit to Merchandise Inventory OXYZ records with a debit to Delivery Expense OXYZ records with a debit to Freight-In QUESTION 27 2 points Saved ABC Company purchases inventory on account from XYZ; ABC records the cost of the inventory purchase: Owhen the order is placed when the invoice is received when the merchandise has been delivered on the purchase date specified in the purchase agreement Owhen legal title passes from XYZ to ABC QUESTION 28 ABC Company purchased $15,000 of merchandise on account from XYZ Company; terms are 1/15, n/eom, FOB destination. Assume both companies use a periodic inventory system and the buyer recorded the purchase at gross. If the invoice is paid within the discount period, how is the discount recorded by each company? ABC credits Merchandise Inventory; XYZ debits Sales Discounts ABC debits Purchase Discounts; XYZ credits Sales Discounts ABC credits Purchase Discounts; XYZ debits Sales Discounts ABC debits Sales Discounts; XYZ credits Merchandise Inventory ABC debits Sales Discounts; XYZ credits Purchase Discounts ABC debits Merchandise Inventory; XYZ credits Sales Discounts 2 points Saved QUESTION 29 2 points ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30. Assume both companies use a periodic inventory system and the buyer recorded the purchase at net. If the invoice is paid within the discount period, how is the payment recorded by each company? ABC debits Account Payable for $9,700; XYZ credits Account Receivable for $10,000 ABC debits Account Payable for $9,700; XYZ credits Account Receivable for $9,700 ABC debits Account Receivable for $9,700; XYZ credits Account Payable for $10,000 ABC debits Account Payable for $10,000; XYZ credits Account Receivable for $10,000 ABC debits Account Receivable $9,700; XYZ credits Account Payable for $9,700 ABC debits Account Receivable $10,000; XYZ credits Account Payable for $10,000 QUESTION 30 2 points Saved ABC Company purchased $10,000 of merchandise on account from XYZ Company; terms are 3/10, n/30, FOB destination. If ABC uses a perpetual inventory system, the entry required to purchase the inventory at net would include: a debit to Merchandise Inventory for $9,700 and a credit to Account Payable for $9,700 a debit to Purchases for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 a debit to Purchases for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 a debit to Merchandise Inventory for $10,000; a credit to Purchase Discount for $300; and a credit to Account Payable for $9,700 a debit to Purchases for $9,700 and a credit to Account Payable for $9,700 a debit to Merchandise Inventory for $9,700; a debit to Purchase Discount for $300; and a credit to Account Payable for $10,000 Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit