Question 1

Freight-In is treated as an addition in the cost of goods sold section of the income statement.

Accepted Answer

A) True 
 B)False

Question 2

Match each definition with the correct term below.
-Cost of goods available for sale

Accepted Answer

A) An inventory system in which the inventory not yet sold or on hand is counted periodically. 
B) Management's regular assessment of the quality of internal control. 
C) An account that accumulates the total cost of merchandise purchased for resale during an accounting period. 
D) The policies and procedures that management puts into place to see that its directives are carried out. 
E) The seller bears the transportation costs to the place where merchandise is delivered and title passes at the time it is delivered.
F)An inventory system in which continuous records are kept of the quantity and cost of individual items as they are bought and sold.
G)The total cost of merchandise that could be sold in an accounting period.
H)The buyer bears the shipping costs of merchandise and title passes at the time it is shipped.
I)An account that gives management a readily available measure of unsatisfactory products and dissatisfied customers.
J)Controls that limit access to assets. 
A) An inventory system in which the inventory not yet sold or on hand is counted periodically. 
B) Management's regular assessment of the quality of internal control. 
C) An account that accumulates the total cost of merchandise purchased for resale during an accounting period. 
D) The policies and procedures that management puts into place to see that its directives are carried out. 
E) The seller bears the transportation costs to the place where merchandise is delivered and title passes at the time it is delivered.
F)An inventory system in which continuous records are kept of the quantity and cost of individual items as they are bought and sold.
G)The total cost of merchandise that could be sold in an accounting period.
H)The buyer bears the shipping costs of merchandise and title passes at the time it is shipped.
I)An account that gives management a readily available measure of unsatisfactory products and dissatisfied customers.
J)Controls that limit access to assets.

Question 3

A consequence of a separation of duties is that

Accepted Answer

A)  operations become extremely inefficient because of constant training of employees. 
B)  theft by employees becomes impossible. 
C)  more employees will need to be bonded. 
D)  theft is possible only when several employees are involved. 
A)  operations become extremely inefficient because of constant training of employees. 
B)  theft by employees becomes impossible. 
C)  more employees will need to be bonded. 
D)  theft is possible only when several employees are involved.

Question 4

A sale takes place when title to the goods transfers to the buyer.

Accepted Answer

A) True 
 B)False

Question 5

Feathertouch Company sold merchandise worth $800 on credit,terms n/15.The cost of the merchandise sold was $550.What is the required journal entry to record the transaction under the perpetual inventory system?

Accepted Answer

A)  Accounts Receivable 800
Sales 800
Cost of Goods Sold 550
Merchandise Inventory 550 
B)  Sales 800
Accounts Receivable 800
Merchandise Inventory 550
Cost of Goods Sold 550 
C)  Accounts Receivable 800
Merchandise Inventory 800
Cost of Goods Sold 550
Merchandise Inventory 550 
D)  Merchandise Inventory 800
Sales 800
Cost of Goods Sold 550
Merchandise Inventory 550 
A)  Accounts Receivable 800
Sales 800
Cost of Goods Sold 550
Merchandise Inventory 550 
B)  Sales 800
Accounts Receivable 800
Merchandise Inventory 550
Cost of Goods Sold 550 
C)  Accounts Receivable 800
Merchandise Inventory 800
Cost of Goods Sold 550
Merchandise Inventory 550 
D)  Merchandise Inventory 800
Sales 800
Cost of Goods Sold 550
Merchandise Inventory 550

Question 6

The document prepared by a department requesting the company to buy something is called a(n)

Accepted Answer

A)  check. 
B)  purchase requisition. 
C)  check authorization. 
D)  purchase order. 
A)  check. 
B)  purchase requisition. 
C)  check authorization. 
D)  purchase order.

Question 7

Chancellor Company purchased merchandise worth $900 on credit,terms n/30 and returned merchandise worth $100 on next day.What is the required journal entry to record the merchandise returns under the periodic inventory system?

Accepted Answer

A)  Accounts Payable 100
Purchases Returns and Allowances 100 
B)  Accounts Payable 100
Merchandise Inventory 100 
C)  Merchandise Inventory 100
Purchases Returns and Allowances 100 
D)  Purchases Returns and Allowances 100
Merchandise Inventory 100 
A)  Accounts Payable 100
Purchases Returns and Allowances 100 
B)  Accounts Payable 100
Merchandise Inventory 100 
C)  Merchandise Inventory 100
Purchases Returns and Allowances 100 
D)  Purchases Returns and Allowances 100
Merchandise Inventory 100

Question 8

The entry to record a $750 sale with terms of 2/10,n/30 would include a(n)

Accepted Answer

A)  decrease to Accounts Receivable for $750. 
B)  increase to Sales for $750. 
C)  increase to Sales Discounts for $15. 
D)  decrease to Sales for $735. 
A)  decrease to Accounts Receivable for $750. 
B)  increase to Sales for $750. 
C)  increase to Sales Discounts for $15. 
D)  decrease to Sales for $735.

Question 9

Use this information to answer the following question.   In addition,beginning merchandise inventory was $44,000 and ending merchandise inventory was $28,000.
Income before income taxes for the period was

Accepted Answer

A)  $398,000. 
B)  $238,000. 
C)  $178,000. 
D)  $458,000. 
A)  $398,000. 
B)  $238,000. 
C)  $178,000. 
D)  $458,000.

Question 10

Given the following information,prepare in good form the cost of goods sold section of an income statement for 2013.

Accepted Answer

The answer of Given the following information,prepare in good form...

Question 11

A very small company would have the most difficulty in implementing which of the following internal control activities?

Accepted Answer

A)  Separation of duties 
B)  Well-designed documents 
C)  Limited access to assets 
D)  Recording of all transactions 
A)  Separation of duties 
B)  Well-designed documents 
C)  Limited access to assets 
D)  Recording of all transactions

Question 12

Demmler Corporation entered into the transactions listed below.In the journal provided,prepare Demmler's journal entries,assuming use of the periodic inventory system.Omit explanations.

Accepted Answer

The answer of Demmler Corporation entered into the transactions listed...

Question 13

Feathertouch Company sold merchandise worth $800 on credit,terms n/15 and the next day the customer returned merchandise worth $50,which cost $30 for Feathertouch company.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Accepted Answer

A)  Accounts Receivable 50
Sales Returns and Allowances 50
Cost of Goods Sold 30
Merchandise Inventory 30 
B)  Sales Returns and Allowances 50
Accounts Receivable 50
Merchandise Inventory 30
Cost of Goods Sold 30 
C)  Accounts Receivable 50
Merchandise Inventory 50
Cost of Goods Sold 30
Sales 30 
D)  Merchandise Inventory 50
Sales 50
Sales 30
Cost of Goods Sold 30 
A)  Accounts Receivable 50
Sales Returns and Allowances 50
Cost of Goods Sold 30
Merchandise Inventory 30 
B)  Sales Returns and Allowances 50
Accounts Receivable 50
Merchandise Inventory 30
Cost of Goods Sold 30 
C)  Accounts Receivable 50
Merchandise Inventory 50
Cost of Goods Sold 30
Sales 30 
D)  Merchandise Inventory 50
Sales 50
Sales 30
Cost of Goods Sold 30

Question 14

Use this information to answer the following question. Alfalfa Company experienced the following events during the period:
  The entry to record transaction 2 would include a(n)

Accepted Answer

A)  increase in Accounts Receivable for $800. 
B)  increase in Sales for $800. 
C)  decrease in Credit Card Expense for $32. 
D)  decrease in Cash for $768. 
A)  increase in Accounts Receivable for $800. 
B)  increase in Sales for $800. 
C)  decrease in Credit Card Expense for $32. 
D)  decrease in Cash for $768.

Question 15

All systems of internal control are identical and,once established,do not need to be changed.

Accepted Answer

A) True 
 B)False

Question 16

When a U.S.company does business with a British company and payment is in U.S.dollars,an exchange gain or loss occurs if the exchange rate between dollars and pounds changes between the date of sale and the date of payment.

Accepted Answer

A) True 
 B)False

Question 17

Why is the separation of duties an important control activity in a good system of internal control?

Accepted Answer

When only one employee is responsible fo

Question 18

The use of major credit cards requires sellers to establish the customer's credit.

Accepted Answer

A) True 
 B)False

Question 19

Adding together the beginning merchandise inventory and cost of goods sold gives the amount of goods available for sale.

Accepted Answer

A) True 
 B)False

Question 20

Management's authorization of transactions relates to a control activity in the accounting system.

Accepted Answer

A) True 
 B)False

Freight-In is treated as an addition in the cost of goods sold section of the income statement.

Match each definition with the correct term below. -Cost of goods available for sale

A consequence of a separation of duties is that

A sale takes place when title to the goods transfers to the buyer.

Feathertouch Company sold merchandise worth $800 on credit,terms n/15.The cost of the merchandise sold was $550.What is the required journal entry to record the transaction under the perpetual inventory system?

The document prepared by a department requesting the company to buy something is called a(n)

Chancellor Company purchased merchandise worth $900 on credit,terms n/30 and returned merchandise worth $100 on next day.What is the required journal entry to record the merchandise returns under the periodic inventory system?

The entry to record a $750 sale with terms of 2/10,n/30 would include a(n)

Use this information to answer the following question. In addition,beginning merchandise inventory was $44,000 and ending merchandise inventory was $28,000. Income before income taxes for the period was

Given the following information,prepare in good form the cost of goods sold section of an income statement for 2013.

A very small company would have the most difficulty in implementing which of the following internal control activities?

Demmler Corporation entered into the transactions listed below.In the journal provided,prepare Demmler's journal entries,assuming use of the periodic inventory system.Omit explanations.

Feathertouch Company sold merchandise worth $800 on credit,terms n/15 and the next day the customer returned merchandise worth $50,which cost $30 for Feathertouch company.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Use this information to answer the following question. Alfalfa Company experienced the following events during the period: The entry to record transaction 2 would include a(n)

All systems of internal control are identical and,once established,do not need to be changed.

When a U.S.company does business with a British company and payment is in U.S.dollars,an exchange gain or loss occurs if the exchange rate between dollars and pounds changes between the date of sale and the date of payment.

Why is the separation of duties an important control activity in a good system of internal control?

The use of major credit cards requires sellers to establish the customer's credit.

Adding together the beginning merchandise inventory and cost of goods sold gives the amount of goods available for sale.

Management's authorization of transactions relates to a control activity in the accounting system.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 6: The Operating Cycle and Merchandising Operations

Freight-In is treated as an addition in the cost of goods sold section of the income statement.

Match each definition with the correct term below. -Cost of goods available for sale

A consequence of a separation of duties is that

A sale takes place when title to the goods transfers to the buyer.

Feathertouch Company sold merchandise worth $800 on credit,terms n/15.The cost of the merchandise sold was $550.What is the required journal entry to record the transaction under the perpetual inventory system?

The document prepared by a department requesting the company to buy something is called a(n)

Chancellor Company purchased merchandise worth $900 on credit,terms n/30 and returned merchandise worth $100 on next day.What is the required journal entry to record the merchandise returns under the periodic inventory system?

The entry to record a $750 sale with terms of 2/10,n/30 would include a(n)

Use this information to answer the following question. In addition,beginning merchandise inventory was $44,000 and ending merchandise inventory was $28,000. Income before income taxes for the period was

Given the following information,prepare in good form the cost of goods sold section of an income statement for 2013.

A very small company would have the most difficulty in implementing which of the following internal control activities?

Demmler Corporation entered into the transactions listed below.In the journal provided,prepare Demmler's journal entries,assuming use of the periodic inventory system.Omit explanations.

Feathertouch Company sold merchandise worth $800 on credit,terms n/15 and the next day the customer returned merchandise worth $50,which cost $30 for Feathertouch company.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Use this information to answer the following question. Alfalfa Company experienced the following events during the period: The entry to record transaction 2 would include a(n)

All systems of internal control are identical and,once established,do not need to be changed.

When a U.S.company does business with a British company and payment is in U.S.dollars,an exchange gain or loss occurs if the exchange rate between dollars and pounds changes between the date of sale and the date of payment.

Why is the separation of duties an important control activity in a good system of internal control?

The use of major credit cards requires sellers to establish the customer's credit.

Adding together the beginning merchandise inventory and cost of goods sold gives the amount of goods available for sale.

Management's authorization of transactions relates to a control activity in the accounting system.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters