In: Accounting
Question 1 4 pts
The following account appears on the income statement of a merchandiser:
dividends |
cost of goods sold |
merchandise inventory |
retained earnings |
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Question 2 4 pts
Which of the following would we credit to record the purchase of merchandise inventory on account if the company uses a perpetual inventory system?
purchases |
cash |
accounts payable |
merchandise inventory |
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Question 3 4 pts
On April 1, our company purchases $1,000 worth of merchandise inventory on credit with the terms 2/10, n/30. What is the amount we would credit to cash if we pay this invoice on April 20?
$1,000 |
$998 |
$990 |
$980 |
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Question 4 4 pts
Under FOB shipping, title to merchandise passes to the purchaser when:
the sale is recorded |
merchandise is shipped to the purchaser |
merchandise is received by the purchaser |
payment is made |
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Question 5 4 pts
Our company sold merchandise on account with a cost of $700 for $1,000. Our company uses a perpetual inventory system. What account and amount would we credit to record the cost of the merchandise sold?
accounts receivable, $1,000 |
sales, $1,000 |
merchandise inventory, $700 |
cost of goods sold, $700 |
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Question 6 4 pts
Our company sold merchandise on account with a cost of $700 for $1,000. Our company uses a perpetual inventory system. What account and amount would we debit to record the cost of the merchandise sold?
accounts receivable, $1,000 |
sales, $1,000 |
merchandise inventory, $700 |
cost of goods sold, $700 |
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Question 7 4 pts
Which of the following appears on a multi-step income statement but not on a single-step income statement?
net sales |
cost of goods sold |
gross profit |
net income |
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Question 8 4 pts
What is the recommended inventory method for a company dealing in unique, high-priced inventory items?
first in, first out (FIFO) |
last in, first out (LIFO) |
specific identification |
weighted average |
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Question 9 4 pts
The two main inventory accounting systems are:
FIFO and LIFO |
perpetual and periodic |
cash method and accrual method |
weighted-average and specific identification |
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Question 10 4 pts
A company purchased 10 units for $5 on January 3. It purchased 10 units for $7 each on February 28. It sold 10 units on March 1. If the company uses the first in, first out (FIFO) inventory costing method, what is the dollar amount for ending inventory on the December 31 balance sheet, assuming that the company uses a perpetual inventory system?
$50 |
$60 |
$70 |
$120 |
PLEASE ANSWER ALL THE QUESTIONS ...ITS FOR THE EXAM THANK YOU
Solutions
1. Cost of goods sold is part of income statement, remaining are balance sheet items
2. Accounts payable
3. $ 1000. It is because amount due is to be paid on or before 10th april.
The term 2/10, n/30 is a typical credit term and means the following:
4. merchandise is shipped to the purchaser
5. merchandise inventory, $700
6. cost of goods sold, $700
7. Gross Profit
8. Specific identification method works well when the quantity of inventory a company has is limited and each inventory item is unique. The specific identification method can be practiced in businesses such as car dealerships, jewelers, and art galleries.
9.There are two main types of inventory accounting systems: the periodic system and the perpetual system
10. $ 70