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A company purchased $6,600 of merchandise inventory on account. Which of the journal entries would be required to record this transaction?

Select one:

a.

Accounts Payable	$6,600
Purchases		$6,000

b.

Cost of Good Sold	$6,600
Accounts Payable		$6,600

c.

Inventory	$6,600
Accounts Payable		$6,600

d.

Accounts Payable	$6,600
Inventory		$6,600

Question 7

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Which of the following businesses is most likely to use a specific identification cost flow method?

Select one:

a. Hardware Store

b. Grocery Store

c. Car Dealership

d. Roofing Company

Question 8

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A company purchased inventory at a cost of $65. It later sold the inventory to a customer for $100 cash. What is the journal entry to record the sale of the inventory?

Select one:

a.

Cash	$65
Revenue		$65
Cost of Goods Sold	$100
Inventory		$100

b.

Cash	$100
Revenue		$100
Cost of Goods Sold	$65
Inventory		$65

c.

Inventory	$100
Cash		$100

d.

Inventory	$65
Cash		$65

Question 9

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A company reported the following inventory transactions during the year:

1/1/2015	Beginning Inventory	20 units	@ $24
3/17/2015	Purchase	60 units	@ $28
7/28/2015	Purchase	40 units	@ $30
9/12/2015	Sale	100 units	@ $50

What is the ending inventory using the weighted average cost flow method?

Select one:

a. $600

b. $560

c. $547

d. $480

Question 10

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Using the weighted average cost flow method for the below transactions, calculate gross margin at year end:

1/1/2015	Beginning Inventory	20 units	@ $24
3/17/2015	Purchase	60 units	@ $28
7/28/2015	Purchase	40 units	@ $30
9/12/2015	Sale	100 units	@ $50

Select one:

a. $2,187

b. $2,240

c. $2,120

d. $2,200

Answer 1

QUESTION NO: 6

JOURNAL ENTRY

INVENTORY A/C DR $6600

TO ACCOUNTS PAYABLE A/C $6600

QUESTION NO : 7

CAR DEALERSHIP BUSINESS IS MOST LIKELY TO USE A SPECIFIC IDENTIFICATION COST FLOW METHOD.

QUESTION NO : 8

JOURNAL ENTRY

B) CASH A/C DR $100

TO REVENUE A/C $100

COST OF GOODS SOLD A/C DR $65

TO INVENTORY A/C $65

QUESTION NO : 9

B). $560

Stores ledger card ( under weighted average method) AMOUNT IN DOLLARS ($)
DATE	PURCHASES			SALES			BALANCE
	QTY	RATE	AMOUNT	QTY	RATE	AMOUNT	QTY	RATE	AMOUNT
01.01.2015	20	24	480				20	24	480
17.03.2015	60	28	1680				80	27	2160
28.07.2015	40	30	1200				120	28	3360
12.09.2015				100	50	5000	20	28	560

CLOSING INVENTORY IS 20 UNITS @ $28 = $560

QUESTION NO : 10

D). $2,200

Stores ledger card ( under weighted average method) AMOUNT IN DOLLARS ($)
DATE	PURCHASES			SALES			BALANCE
	QTY	RATE	AMOUNT	QTY	RATE	AMOUNT	QTY	RATE	AMOUNT
01.01.2015	20	24	480				20	24	480
17.03.2015	60	28	1680				80	27	2160
28.07.2015	40	30	1200				120	28	3360
12.09.2015				100	50	5000	20	28	560
SALES			$5000
COST OF GOODS SOLD			$2800
	GROSS MARGIN		$2200