Question 1

A firm uses the periodic inventory method.Which of the following entries would be made to record a return of $220 of inventory purchased on credit,including GST?

Accepted Answer

A) The accounting entry would be a $200 debit to Accounts payable and a $200 credit to Purchases. 
B) The accounting entry would be a $220 debit to Purchases and a $220 credit to Accounts payable. 
C) The accounting entry would be a $200 debit to Purchase returns and allowances,a $20 debit to GST clearing and a $220 credit to Accounts payable. 
D) The accounting entry would be a $220 debit to Accounts payable a $200 credit to Purchase returns and allowances,and a $20 credit to GST clearing. 
A) The accounting entry would be a $200 debit to Accounts payable and a $200 credit to Purchases. 
B) The accounting entry would be a $220 debit to Purchases and a $220 credit to Accounts payable. 
C) The accounting entry would be a $200 debit to Purchase returns and allowances,a $20 debit to GST clearing and a $220 credit to Accounts payable. 
D) The accounting entry would be a $220 debit to Accounts payable a $200 credit to Purchase returns and allowances,and a $20 credit to GST clearing.

Question 2

Which of the following assets MUST a retailing business have for daily operations?

Accepted Answer

A) Accounts receivable 
B) Equipment 
C) Prepaid insurance 
D) Inventory 
A) Accounts receivable 
B) Equipment 
C) Prepaid insurance 
D) Inventory

Question 3

The following pertains to periodic inventory: On a retailer's income statement,which would NOT be found under the heading of Cost of sales?

Accepted Answer

A) Purchases 
B) Purchase returns and allowances 
C) Supplies 
D) Freight in 
A) Purchases 
B) Purchase returns and allowances 
C) Supplies 
D) Freight in

Question 4

A company sold inventory worth $212 for $330 on credit.The seller uses the perpetual inventory system.The entry to record the cost of inventory sold would include:

Accepted Answer

A) a debit to Inventory for $212 and a credit to Cost of sales for $212 
B) a debit to Cost of sales and a credit to Inventory for $212 
C) a debit to Sales and a credit to Cash for $330 
D) a debit to Cash and a credit to Sales for $330 
A) a debit to Inventory for $212 and a credit to Cost of sales for $212 
B) a debit to Cost of sales and a credit to Inventory for $212 
C) a debit to Sales and a credit to Cash for $330 
D) a debit to Cash and a credit to Sales for $330

Question 5

Which of the following are the normal balances of Sales,Sales discounts and Sales returns and allowances,respectively?

Accepted Answer

A) Debit,credit and credit 
B) Credit,debit and debit 
C) Debit,debit and credit 
D) Credit,credit and debit 
A) Debit,credit and credit 
B) Credit,debit and debit 
C) Debit,debit and credit 
D) Credit,credit and debit

Question 6

What is the first step in the operating cycle for a retailing business?

Accepted Answer

A) The firm sells inventory to customers,creating accounts receivable. 
B) The firm delivers inventory to customers. 
C) The firm collects cash. 
D) The firm buys inventory. 
A) The firm sells inventory to customers,creating accounts receivable. 
B) The firm delivers inventory to customers. 
C) The firm collects cash. 
D) The firm buys inventory.

Question 7

On a retailer's balance sheet,inventory is listed as a(n):

Accepted Answer

A) revenue. 
B) expense. 
C) current asset. 
D) current liability. 
A) revenue. 
B) expense. 
C) current asset. 
D) current liability.

Question 8

The following details are provided by Blue Bell Retailers.The company uses the periodic inventory system. $$\begin{array} { | l | l | } 
\hline \text { Net sales } & \$ 200,000 \
\hline \text { Purchases } & 90,000 \
\hline \text { Purchase returns and allowances } & 1800 \
\hline \text { Purchase discounts } & 1500 \
\hline \text { Freight in } & 1800 \
\hline \text { Beginning inventory } & 63,000 \
\hline \text { Ending inventory } & 37,000 \
\hline
\end{array}$$ Calculate the amount of net purchases.

Accepted Answer

A) $149,700 
B) $86,700 
C) $110,000 
D) $84,900 
A) $149,700 
B) $86,700 
C) $110,000 
D) $84,900

Question 9

Which of the following describes Net sales revenue?

Accepted Answer

A) Sales less Cost of sales 
B) Sales less Sales discounts 
C) Sales less Sales discounts less Sales returns and allowances 
D) Sales less Sales returns and allowances 
A) Sales less Cost of sales 
B) Sales less Sales discounts 
C) Sales less Sales discounts less Sales returns and allowances 
D) Sales less Sales returns and allowances

Question 10

What is a purchase return?

Accepted Answer

A) A return of inventory that is defective or damaged 
B) A price reduction 
C) A customer refund from the sale of inventory 
D) A return of cash to the purchaser 
A) A return of inventory that is defective or damaged 
B) A price reduction 
C) A customer refund from the sale of inventory 
D) A return of cash to the purchaser

Question 11

Which of the following is subtracted from Net sales revenue to arrive at Gross profit?

Accepted Answer

A) Cost of sales 
B) Sales discounts and Sales returns and allowances 
C) Operating expenses 
D) Cost of goods available for sale 
A) Cost of sales 
B) Sales discounts and Sales returns and allowances 
C) Operating expenses 
D) Cost of goods available for sale

Question 12

In a perpetual inventory system,the entry to record the inventory purchased includes a credit to Cost of sales.

Accepted Answer

A) True 
 B)False

Question 13

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:

Accepted Answer

A) credited to Inventory. 
B) debited to Cost of sales. 
C) credited to Cost of sales. 
D) debited to Inventory. 
A) credited to Inventory. 
B) debited to Cost of sales. 
C) credited to Cost of sales. 
D) debited to Inventory.

Question 14

A company using the perpetual inventory system purchased inventory worth $510,000 on credit with terms of credit being 3/15,n/45.Defective inventory of $80,000 was returned 2 days later and the accounts were appropriately adjusted.If the company paid the invoice 20 days later,the journal entry to record the payment would be:

Accepted Answer

A) $430,000 debit to Accounts payable and $430,000 credit to Cash. 
B) $510,000 debit to Accounts payable,$497,100 credit to Cash and $12,900 credit to Inventory. 
C) $442,900 debit to Accounts payable,$12,900 credit to Inventory and $430,000 credit to Cash. 
D) $510,000 debit to Accounts payable and $510,000 credit to Cash. 
A) $430,000 debit to Accounts payable and $430,000 credit to Cash. 
B) $510,000 debit to Accounts payable,$497,100 credit to Cash and $12,900 credit to Inventory. 
C) $442,900 debit to Accounts payable,$12,900 credit to Inventory and $430,000 credit to Cash. 
D) $510,000 debit to Accounts payable and $510,000 credit to Cash.

Question 15

The GST payable to the ATO represents the GST the firm has paid to its suppliers.

Accepted Answer

A) True 
 B)False

Question 16

The terms on an invoice are 3/10,n/25.This means that a:

Accepted Answer

A) discount of 3% is allowed if the invoice is paid in 10 days. 
B) discount of 10% is allowed if the invoice is paid in three days. 
C) discount of 25% is allowed if the invoice is paid in 10 days. 
D) discount of 3% is allowed if the invoice is paid after 25 days. 
A) discount of 3% is allowed if the invoice is paid in 10 days. 
B) discount of 10% is allowed if the invoice is paid in three days. 
C) discount of 25% is allowed if the invoice is paid in 10 days. 
D) discount of 3% is allowed if the invoice is paid after 25 days.

Question 17

When a firm is purchasing inventory,and there are either returns or allowances for damaged goods,those amounts are recorded as a debit to the Sales returns and allowances account.

Accepted Answer

A) True 
 B)False

Question 18

A high rate of inventory turnover indicates which of the following?

Accepted Answer

A) The firm is experiencing a rapid decline in inventory levels. 
B) The firm is losing inventory to errors in recording. 
C) The firm has a high Gross profit percentage. 
D) The firm sells its inventory rapidly. 
A) The firm is experiencing a rapid decline in inventory levels. 
B) The firm is losing inventory to errors in recording. 
C) The firm has a high Gross profit percentage. 
D) The firm sells its inventory rapidly.

Question 19

What is freight out?

Accepted Answer

A) Transportation costs to ship goods into the warehouse 
B) Costs that are not expensed 
C) Transportation costs to ship goods out of the warehouse 
D) Inventory costs 
A) Transportation costs to ship goods into the warehouse 
B) Costs that are not expensed 
C) Transportation costs to ship goods out of the warehouse 
D) Inventory costs

A firm uses the periodic inventory method.Which of the following entries would be made to record a return of $220 of inventory purchased on credit,including GST?

Which of the following assets MUST a retailing business have for daily operations?

The following pertains to periodic inventory: On a retailer's income statement,which would NOT be found under the heading of Cost of sales?

A company sold inventory worth $212 for $330 on credit.The seller uses the perpetual inventory system.The entry to record the cost of inventory sold would include:

Which of the following are the normal balances of Sales,Sales discounts and Sales returns and allowances,respectively?

What is the first step in the operating cycle for a retailing business?

On a retailer's balance sheet,inventory is listed as a(n):

Which of the following describes Net sales revenue?

What is a purchase return?

Which of the following is subtracted from Net sales revenue to arrive at Gross profit?

In a perpetual inventory system,the entry to record the inventory purchased includes a credit to Cost of sales.

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:

The GST payable to the ATO represents the GST the firm has paid to its suppliers.

The terms on an invoice are 3/10,n/25.This means that a:

When a firm is purchasing inventory,and there are either returns or allowances for damaged goods,those amounts are recorded as a debit to the Sales returns and allowances account.

A high rate of inventory turnover indicates which of the following?

What is freight out?

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

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Exam 5: Retailing Operations

A firm uses the periodic inventory method.Which of the following entries would be made to record a return of $220 of inventory purchased on credit,including GST?

Which of the following assets MUST a retailing business have for daily operations?

The following pertains to periodic inventory: On a retailer's income statement,which would NOT be found under the heading of Cost of sales?

A company sold inventory worth $212 for $330 on credit.The seller uses the perpetual inventory system.The entry to record the cost of inventory sold would include:

Which of the following are the normal balances of Sales,Sales discounts and Sales returns and allowances,respectively?

What is the first step in the operating cycle for a retailing business?

On a retailer's balance sheet,inventory is listed as a(n):

Which of the following describes Net sales revenue?

What is a purchase return?

Which of the following is subtracted from Net sales revenue to arrive at Gross profit?

In a perpetual inventory system,the entry to record the inventory purchased includes a credit to Cost of sales.

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:

The GST payable to the ATO represents the GST the firm has paid to its suppliers.

The terms on an invoice are 3/10,n/25.This means that a:

When a firm is purchasing inventory,and there are either returns or allowances for damaged goods,those amounts are recorded as a debit to the Sales returns and allowances account.

A high rate of inventory turnover indicates which of the following?

What is freight out?

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