Question 1

A firm sold inventory for $350 that cost $221.The entry to record the cost of the inventory sold would be a:

Accepted Answer

A) debit to Cost of sales and a credit to Inventory for $221. 
B) debit to Cash and a credit to Sales for $350. 
C) debit to Sales and a credit to Cash for $350. 
D) debit to Inventory for $221 and a credit to Cost of sales for $221. 
A) debit to Cost of sales and a credit to Inventory for $221. 
B) debit to Cash and a credit to Sales for $350. 
C) debit to Sales and a credit to Cash for $350. 
D) debit to Inventory for $221 and a credit to Cost of sales for $221.

Question 2

All else being equal,a firm that is not registered for GST is likely to report a higher profit than a registered firm.

Accepted Answer

A) True 
 B)False

Question 3

The Inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $42,000.Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system. )

Accepted Answer

A) a $8000 credit to Cost of sales 
B) a $8000 credit to Inventory 
C) a $42,000 credit to Inventory 
D) a $50,000 debit to Cost of sales 
A) a $8000 credit to Cost of sales 
B) a $8000 credit to Inventory 
C) a $42,000 credit to Inventory 
D) a $50,000 debit to Cost of sales

Question 4

Which of the following is the result of Cost of sales divided by Average inventory?

Accepted Answer

A) Current ratio 
B) Rate of inventory turnover 
C) Gross profit percentage 
D) Debt ratio 
A) Current ratio 
B) Rate of inventory turnover 
C) Gross profit percentage 
D) Debt ratio

Question 5

From the following details,calculate net sales revenue. $$\begin{array} { | l | l | } 
\hline \text { Sales revenue } & \$ 440,000 \
\hline \text { Cost of sales } & 2,900,000 \
\hline \text { Operating expenses } & 790,000 \
\hline \text { Sales discounts } & 20,000 \
\hline \text { Sales returns and allowances } & 7000 \
\hline \text { Interest revenue } & \$ 000 \
\hline
\end{array}$$

Accepted Answer

A) $317,000 
B) $433,000 
C) $324,000 
D) $413,000 
A) $317,000 
B) $433,000 
C) $324,000 
D) $413,000

Question 6

A firm has purchased inventory and receives an invoice that indicates that the buyer must pay the transportation costs of delivering the inventory.Which of the following will most likely be noted as the delivery terms?

Accepted Answer

A) FOB 2/10,n/30 
B) FOB shipping point 
C) FOB destination 
D) None of the above 
A) FOB 2/10,n/30 
B) FOB shipping point 
C) FOB destination 
D) None of the above

Question 7

The general ledger shows a balance of $23 678 in the Inventory account at the end of the period.A physical inventory shows a count of $22 078.The adjusting entry would be a:

Accepted Answer

A) debit to Inventory and a credit to Cash. 
B) debit to Cost of sales and a credit to Inventory. 
C) debit to Cost of sales and a credit to Cash. 
D) debit to Inventory and a credit to Cost of sales. 
A) debit to Inventory and a credit to Cash. 
B) debit to Cost of sales and a credit to Inventory. 
C) debit to Cost of sales and a credit to Cash. 
D) debit to Inventory and a credit to Cost of sales.

Question 8

If a firm uses the periodic inventory method,which of the following is subtracted from Purchases to arrive at Net purchases?

Accepted Answer

A) Cost of goods available for sale 
B) Ending inventory 
C) Purchase discounts and Purchase returns and allowances 
D) Beginning inventory 
A) Cost of goods available for sale 
B) Ending inventory 
C) Purchase discounts and Purchase returns and allowances 
D) Beginning inventory

Question 9

Which of the following is TRUE about freight in?

Accepted Answer

A) Freight in is a selling expense. 
B) Freight in is deducted from Accounts payable. 
C) Freight in is added to the cost of inventory. 
D) Freight in is an operating expense. 
A) Freight in is a selling expense. 
B) Freight in is deducted from Accounts payable. 
C) Freight in is added to the cost of inventory. 
D) Freight in is an operating expense.

Question 10

FOB shipping point means that the:

Accepted Answer

A) seller normally pays the transportation costs. 
B) transportation costs are billed to the seller. 
C) buyer and the seller split the transportation costs. 
D) buyer normally pays the transportation costs. 
A) seller normally pays the transportation costs. 
B) transportation costs are billed to the seller. 
C) buyer and the seller split the transportation costs. 
D) buyer normally pays the transportation costs.

Question 11

A firm uses the perpetual inventory method.Which of the following entries would be made to record a purchase of inventory on credit?

Accepted Answer

A) The accounting entry would be a debit to Accounts payable and GST clearing and a credit to Inventory. 
B) The accounting entry would be a debit to Accounts payable and a credit to Purchases and GST Clearing. 
C) The accounting entry would be a debit to Purchases and GST clearing and a credit to Accounts payable. 
D) The accounting entry would be a debit to Inventory and GST clearing and a credit to Accounts payable. 
A) The accounting entry would be a debit to Accounts payable and GST clearing and a credit to Inventory. 
B) The accounting entry would be a debit to Accounts payable and a credit to Purchases and GST Clearing. 
C) The accounting entry would be a debit to Purchases and GST clearing and a credit to Accounts payable. 
D) The accounting entry would be a debit to Inventory and GST clearing and a credit to Accounts payable.

Question 12

A purchase return of goods purchased on credit is recorded by the purchasing firm as a debit to what account?

Accepted Answer

A) Inventory 
B) Cost of sales 
C) Accounts payable 
D) Accounts receivable 
A) Inventory 
B) Cost of sales 
C) Accounts payable 
D) Accounts receivable

Question 13

Which of the following is the gross profit percentage?

Accepted Answer

A) Gross profit plus net sales revenue 
B) Gross profit times net sales revenue 
C) Gross profit divided by net sales revenue 
D) Gross profit minus net sales revenue 
A) Gross profit plus net sales revenue 
B) Gross profit times net sales revenue 
C) Gross profit divided by net sales revenue 
D) Gross profit minus net sales revenue

Question 14

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2% if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

Accepted Answer

A) True 
 B)False

Question 15

The following information relates to Nebula Ltd. $$\begin{array} { | l | l | } 
\hline \text { Sales revenue } & \$ 230,000 \
\hline \text { Cost of sales } & 150,000 \
\hline \text { Interest revenue } & 10,000 \
\hline \text { Operating expenses } & 40,000 \
\hline \text { Sales discounts } & 20,000 \
\hline \text { Sales returns and allowances } & 7000 \
\hline
\end{array}$$ Calculate the profit.

Accepted Answer

A) $230,000 
B) $13,000 
C) $23,000 
D) $70,000 
A) $230,000 
B) $13,000 
C) $23,000 
D) $70,000

Question 16

With a periodic inventory method,it is necessary to conduct a physical count of inventory to determine cost of sales.

Accepted Answer

A) True 
 B)False

Question 17

Thomas Company provided the following particulars for year 2017: $$\begin{array} { | l | l | } 
\hline \text { Cost of sales } & \$ 1,400,000 \
\hline \text { Beginning inventory } & 340,000 \
\hline \text { Ending inventory } & 350,000 \
\hline
\end{array}$$ Calculate the average number of days that inventory was held by Thomas Company during 2017.(Assume 365 days in a year.Round your intermediate calculations and final answer to two decimal places. )

Accepted Answer

A) 91.25 days 
B) 179.8 days 
C) 88.59 days 
D) 89.9 days 
A) 91.25 days 
B) 179.8 days 
C) 88.59 days 
D) 89.9 days

Question 18

A sales return is recorded with a credit to Accounts receivable.

Accepted Answer

A) True 
 B)False

Question 19

A sales allowance is recorded with a credit to Accounts receivable.

Accepted Answer

A) True 
 B)False

Question 20

Credit terms of 2/10,n/30 indicate that a 2% discount may be taken if the invoice is paid within 10 days,but the total invoice amount is due if paid on the 11th to the 30th day after the invoice date.

Accepted Answer

A) True 
 B)False

A firm sold inventory for $350 that cost $221.The entry to record the cost of the inventory sold would be a:

All else being equal,a firm that is not registered for GST is likely to report a higher profit than a registered firm.

The Inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $42,000.Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system. )

Which of the following is the result of Cost of sales divided by Average inventory?

From the following details,calculate net sales revenue. Sales revenue \ 440,000 Cost of sales 2,900,000 Operating expenses 790,000 Sales discounts 20,000 Sales returns and allowances 7000 Interest revenue \ 000

A firm has purchased inventory and receives an invoice that indicates that the buyer must pay the transportation costs of delivering the inventory.Which of the following will most likely be noted as the delivery terms?

The general ledger shows a balance of $23 678 in the Inventory account at the end of the period.A physical inventory shows a count of $22 078.The adjusting entry would be a:

If a firm uses the periodic inventory method,which of the following is subtracted from Purchases to arrive at Net purchases?

Which of the following is TRUE about freight in?

FOB shipping point means that the:

A firm uses the perpetual inventory method.Which of the following entries would be made to record a purchase of inventory on credit?

A purchase return of goods purchased on credit is recorded by the purchasing firm as a debit to what account?

Which of the following is the gross profit percentage?

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2% if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

The following information relates to Nebula Ltd. Sales revenue \ 230,000 Cost of sales 150,000 Interest revenue 10,000 Operating expenses 40,000 Sales discounts 20,000 Sales returns and allowances 7000 Calculate the profit.

With a periodic inventory method,it is necessary to conduct a physical count of inventory to determine cost of sales.

A sales return is recorded with a credit to Accounts receivable.

A sales allowance is recorded with a credit to Accounts receivable.

Credit terms of 2/10,n/30 indicate that a 2% discount may be taken if the invoice is paid within 10 days,but the total invoice amount is due if paid on the 11^th to the 30^th day after the invoice date.

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters

Exam 5: Retailing Operations

A firm sold inventory for $350 that cost $221.The entry to record the cost of the inventory sold would be a:

All else being equal,a firm that is not registered for GST is likely to report a higher profit than a registered firm.

The Inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $42,000.Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system. )

Which of the following is the result of Cost of sales divided by Average inventory?

From the following details,calculate net sales revenue. Sales revenue \ 440,000 Cost of sales 2,900,000 Operating expenses 790,000 Sales discounts 20,000 Sales returns and allowances 7000 Interest revenue \ 000

A firm has purchased inventory and receives an invoice that indicates that the buyer must pay the transportation costs of delivering the inventory.Which of the following will most likely be noted as the delivery terms?

The general ledger shows a balance of $23 678 in the Inventory account at the end of the period.A physical inventory shows a count of $22 078.The adjusting entry would be a:

If a firm uses the periodic inventory method,which of the following is subtracted from Purchases to arrive at Net purchases?

Which of the following is TRUE about freight in?

FOB shipping point means that the:

A firm uses the perpetual inventory method.Which of the following entries would be made to record a purchase of inventory on credit?

A purchase return of goods purchased on credit is recorded by the purchasing firm as a debit to what account?

Which of the following is the gross profit percentage?

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2% if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

The following information relates to Nebula Ltd. Sales revenue \ 230,000 Cost of sales 150,000 Interest revenue 10,000 Operating expenses 40,000 Sales discounts 20,000 Sales returns and allowances 7000 Calculate the profit.

With a periodic inventory method,it is necessary to conduct a physical count of inventory to determine cost of sales.

A sales return is recorded with a credit to Accounts receivable.

A sales allowance is recorded with a credit to Accounts receivable.

Credit terms of 2/10,n/30 indicate that a 2% discount may be taken if the invoice is paid within 10 days,but the total invoice amount is due if paid on the 11th to the 30th day after the invoice date.

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters

Credit terms of 2/10,n/30 indicate that a 2% discount may be taken if the invoice is paid within 10 days,but the total invoice amount is due if paid on the 11^th to the 30^th day after the invoice date.