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In: Accounting

Question 1 4 pts The following account appears on the income statement of a merchandiser: dividends...

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

Expert Solution

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:

  • "2" shows the discount percentage offered by the seller.
  • "10" indicates the number of days (from the invoice date) within which the buyer should pay the invoice in order to receive the discount.
  • "n/30" states that if the buyer does not pay the (full) invoice amount within the 10 days to qualify for the discount, then the net amount is due within 30 days after the sales invoice date.

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


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