Question 1

Sales Returns & Allowances is a ______ account and is ______ when goods are returned by customers for a refund.

Accepted Answer

A)  contra-asset; debited 
B)  contra-revenue; credited 
C)  contra-revenue; debited 
D)  contra-asset; credited 
A)  contra-asset; debited 
B)  contra-revenue; credited 
C)  contra-revenue; debited 
D)  contra-asset; credited

Question 2

Assume that a company uses a perpetual inventory system and records the return of inventory previously purchased on account a debit to Accounts Payable and a credit to Inventory.This entry is:

Accepted Answer

A)  incorrect and will cause assets to be overstated 
B)  incorrect and will cause assets to be understated 
C)  incorrect and will cause liabilities to overstated 
D)  correct 
A)  incorrect and will cause assets to be overstated 
B)  incorrect and will cause assets to be understated 
C)  incorrect and will cause liabilities to overstated 
D)  correct

Question 3

In a perpetual inventory system,only one journal entry is required to record the sale of inventory.

Accepted Answer

A) True 
 B)False

Question 4

To determine cost of goods sold for the period requires:

Accepted Answer

A)  subtracting ending inventory from the goods available to sell, which is the beginning inventory plus purchases 
B)  adding ending inventory to the goods available to sell, which is the beginning inventory plus purchases 
C)  subtracting beginning inventory from the goods available to sell, which is the ending inventory plus purchases 
D)  adding beginning inventory to the goods available to sell, which is the ending inventory plus purchases 
A)  subtracting ending inventory from the goods available to sell, which is the beginning inventory plus purchases 
B)  adding ending inventory to the goods available to sell, which is the beginning inventory plus purchases 
C)  subtracting beginning inventory from the goods available to sell, which is the ending inventory plus purchases 
D)  adding beginning inventory to the goods available to sell, which is the ending inventory plus purchases

Question 5

Pixie Products reported net sales revenue of $18.8 billion and cost of goods sold of $5.6 billion,while Stardust Inc.reported net sales revenue of $22.3 billion and cost of goods sold of $9.3 billion.Which of the following statements is correct?

Accepted Answer

A)  While Stardust Inc. generated more revenue than Pixie Inc., Stardust Inc. generated a lower gross profit percentage. 
B)  Pixie Inc. generated a lower gross profit percentage because its sales revenue was lower. 
C)  Stardust Inc. did a better job of controlling product costs as a percentage of sales than did Pixie Inc. 
D)  The selling price of the products sold by Pixie Inc. must have been higher than the price of products sold by Stardust Inc. 
A)  While Stardust Inc. generated more revenue than Pixie Inc., Stardust Inc. generated a lower gross profit percentage. 
B)  Pixie Inc. generated a lower gross profit percentage because its sales revenue was lower. 
C)  Stardust Inc. did a better job of controlling product costs as a percentage of sales than did Pixie Inc. 
D)  The selling price of the products sold by Pixie Inc. must have been higher than the price of products sold by Stardust Inc.

Question 6

Beginning inventory plus purchases equals:

Accepted Answer

A)  ending inventory. 
B)  cost of goods sold. 
C)  goods available for sale. 
D)  net purchases. 
A)  ending inventory. 
B)  cost of goods sold. 
C)  goods available for sale. 
D)  net purchases.

Question 7

BetterBuy uses a perpetual inventory system.BetterBuy sells a computer from inventory for $599 on credit.BetterBuy originally bought the computer from IBM for $395.What journal entry (entries)will BetterBuy prepare to record the sale?

Accepted Answer

A)  Debit Cash and credit Sales Revenue for $599; debit Cost of Goods Sold and credit Inventory for $395 
B)  Debit Accounts Receivable for $599, credit Inventory for $395, and credit Gross Profit for $204 
C)  Debit Accounts Receivable and credit Sales Revenue for $599; debit Cost of Goods Sold and credit Inventory for $395 
D)  Debit Inventory for $395, debit Cost of Goods Sold for $204, and credit Accounts Receivable for $599 
A)  Debit Cash and credit Sales Revenue for $599; debit Cost of Goods Sold and credit Inventory for $395 
B)  Debit Accounts Receivable for $599, credit Inventory for $395, and credit Gross Profit for $204 
C)  Debit Accounts Receivable and credit Sales Revenue for $599; debit Cost of Goods Sold and credit Inventory for $395 
D)  Debit Inventory for $395, debit Cost of Goods Sold for $204, and credit Accounts Receivable for $599

Question 8

Intel makes microchips from raw materials acquired from suppliers.Intel is a:

Accepted Answer

A)  service company. 
B)  retail company. 
C)  manufacturer. 
D)  merchandising company. 
A)  service company. 
B)  retail company. 
C)  manufacturer. 
D)  merchandising company.

Question 9

A company reported a gross profit percentage of 25% with net sales of $347,800.What is the amount of cost of goods sold?

Accepted Answer

A)  $86,950 
B)  $260,850 
C)  $326,063 
D)  $108,688 
A)  $86,950 
B)  $260,850 
C)  $326,063 
D)  $108,688

Question 10

Sinton Inc.uses a periodic inventory system.During the current year,its beginning inventory was $5,200 and net purchases amounted to $24,600.At the end of the year,after counting its inventory,the company determined that the dollar valuation of its ending inventory was $4,100.
Required:
Part a.Calculate cost of goods available for sale.
Part a.Calculate cost of goods sold.

Accepted Answer

The answer of Sinton Inc.uses a periodic inventory system.During the...

Sales Returns & Allowances is a account and is when goods are returned by customers for a refund.

Assume that a company uses a perpetual inventory system and records the return of inventory previously purchased on account a debit to Accounts Payable and a credit to Inventory.This entry is:

In a perpetual inventory system,only one journal entry is required to record the sale of inventory.

To determine cost of goods sold for the period requires:

Pixie Products reported net sales revenue of $18.8 billion and cost of goods sold of $5.6 billion,while Stardust Inc.reported net sales revenue of $22.3 billion and cost of goods sold of $9.3 billion.Which of the following statements is correct?

Beginning inventory plus purchases equals:

BetterBuy uses a perpetual inventory system.BetterBuy sells a computer from inventory for $599 on credit.BetterBuy originally bought the computer from IBM for $395.What journal entry (entries)will BetterBuy prepare to record the sale?

Intel makes microchips from raw materials acquired from suppliers.Intel is a:

A company reported a gross profit percentage of 25% with net sales of $347,800.What is the amount of cost of goods sold?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 6: Internal Control and Financial Reporting for Cash and Merchandising Operations

Sales Returns & Allowances is a ______ account and is ______ when goods are returned by customers for a refund.

Assume that a company uses a perpetual inventory system and records the return of inventory previously purchased on account a debit to Accounts Payable and a credit to Inventory.This entry is:

In a perpetual inventory system,only one journal entry is required to record the sale of inventory.

To determine cost of goods sold for the period requires:

Pixie Products reported net sales revenue of $18.8 billion and cost of goods sold of $5.6 billion,while Stardust Inc.reported net sales revenue of $22.3 billion and cost of goods sold of $9.3 billion.Which of the following statements is correct?

Beginning inventory plus purchases equals:

BetterBuy uses a perpetual inventory system.BetterBuy sells a computer from inventory for $599 on credit.BetterBuy originally bought the computer from IBM for $395.What journal entry (entries)will BetterBuy prepare to record the sale?

Intel makes microchips from raw materials acquired from suppliers.Intel is a:

A company reported a gross profit percentage of 25% with net sales of $347,800.What is the amount of cost of goods sold?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Sales Returns & Allowances is a account and is when goods are returned by customers for a refund.