Question 1

In a purchase system,the most appropriate department to control goods upon arrival into the company is the

Accepted Answer

A)  receiving department. 
B)  treasury department. 
C)  accounting department. 
D)  requesting department. 
A)  receiving department. 
B)  treasury department. 
C)  accounting department. 
D)  requesting department.

Question 2

The purchasing department prepares a purchase requisition addressed to the vendor (seller)containing instructions related to the items ordered.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The periodic inventory system relies on a physical count of merchandise for its balance sheet amount.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is necessary for computing cost of goods sold but not necessary for computing goods available for sale?

Accepted Answer

A)  Freight-in 
B)  Purchases 
C)  Ending merchandise inventory 
D)  Beginning merchandise inventory 
A)  Freight-in 
B)  Purchases 
C)  Ending merchandise inventory 
D)  Beginning merchandise inventory

Question 6

Assuming that net cost of purchases was $58,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500,how much was cost of goods sold?

Accepted Answer

A)  $69,500 
B)  $71,500 
C)  $59,000 
D)  $46,500 
A)  $69,500 
B)  $71,500 
C)  $59,000 
D)  $46,500

Question 7

At the end of each day,the cashier should be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

Accepted Answer

A) True 
 B)False

Question 8

Taking a physical inventory refers to making a count of all merchandise on hand at a particular time.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not an internal control activity for cash?

Accepted Answer

A)  Surprise audits of cash on hand should be made occasionally. 
B)  All cash receipts should be recorded promptly. 
C)  The number of persons who have access to cash should be limited. 
D)  Most transactions should be in cash to reduce recordkeeping. 
A)  Surprise audits of cash on hand should be made occasionally. 
B)  All cash receipts should be recorded promptly. 
C)  The number of persons who have access to cash should be limited. 
D)  Most transactions should be in cash to reduce recordkeeping.

Question 10

Proper control procedures can guarantee the prevention of theft.

Accepted Answer

A) True 
 B)False

Question 11

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Accepted Answer

A physical inventory must be taken to de

Question 12

Which of the following documents would be prepared (by a buyer of goods)after the others?

Accepted Answer

A)  Receiving report 
B)  Check 
C)  Purchase requisition 
D)  Purchase order 
A)  Receiving report 
B)  Check 
C)  Purchase requisition 
D)  Purchase order

Question 13

Under the periodic inventory system,cost of goods sold is treated as an account.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following should not be included in the count of ending merchandise inventory?

Accepted Answer

A)  Damaged goods to be sold at a reduced price 
B)  Goods in transit to which a company has title 
C)  Goods in warehouses 
D)  Goods sold but not yet delivered 
A)  Damaged goods to be sold at a reduced price 
B)  Goods in transit to which a company has title 
C)  Goods in warehouses 
D)  Goods sold but not yet delivered

Question 15

Use this information to answer the following question. $$\begin{array} {| l | r | r | } 
\hline \text { Account Name } &  { \text { Debit } } & { \text { Credit } } \
\hline \text { Sales } & & 303,000 \
\text { Sales Retums and Allowances } & 10,000 & \
\text { Purcha5es } & 68,000 & \
\text { Purchases Returns and Allowances } & &8,000 \ 
\text { Freight-In } & 12,000 &  \
\text { Selling Exgenses } & 30,000 & \
\text { General and Administrative Exgenses } & 110,000 &\
\hline
\end{array}$$ In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
Net sales for the period were

Accepted Answer

A)  $303,000. 
B)  $273,000. 
C)  $293,000. 
D)  $213,000. 
A)  $303,000. 
B)  $273,000. 
C)  $293,000. 
D)  $213,000.

Question 16

Assume that the $5,509 sales made by Exotic Corporation for the month ended December 31,20xx,were made to customers using credit cards.Prepare one journal entry to record these sales assuming that all of the credit card companies charge Exotic a 2 percent discount fee.(Omit date.)Round to the nearest whole dollar.

Accepted Answer

The answer of Assume that the $5,509 sales made by...

Question 17

Prepare journal entries without explanations for the merchandising transactions listed below for Naveh Corporation.Assume use of the periodic inventory system.
 $\begin{aligned}
\text { July }1 & \text { Sold merchandise to Hobart Company for } \$ 1,000 \text {, terms } n / 15 \text {. } \
2 & \text { Purchased merchandise from Stowe Corporation for } \$ 4,000 \text {, terms } n / 15 \text {. } \
3 & \text { Gave credit to Hobart Company for merchandise returned, } \$ 100 \text {. } \
5 & \text { Purchased merchandise from Rajah Company for } \$ 5,000 \text {, terms } n / 30 \text {. } \
10 & \text { Received payment from Hobart Company for purchase of July } 1 \text {. } \
11 & \text { Returned } \$ 500 \text { in merchandise to Rajah Company for credit. } \
13 & \text { Paid Stowe Corporation in full for purchase of July } 2 \text {. } \
14 & \text { Paid Rajah Company in full for purchase of July } 5 \text {. }
\end{aligned}$

Accepted Answer

The answer of Prepare journal entries without explanations for the...

Question 18

From the following data,calculate the amount of gross margin and gross purchases.
 $\begin{array}{llr}
  \text {Ending Merchandise Inventory  } &\$128\
 \text {Purchases Returns and Allowances  } &32\
 \text {Beginning Merchandise Inventory  } &160\
 \text { Sales } &1,280\
 \text { Freight-In } &96\
 \text {  Cost of Goods Sold} &778\
 \text { Purchases Discounts } &16
\end{array}$

Accepted Answer

Gross marg

Question 19

Under the perpetual inventory system,in addition to making the entry to record a sale,a company would

Accepted Answer

A)  record an increase in inventory corresponding to the amount of the sale. 
B)  record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold. 
C)  record an increase in inventory corresponding to the cost of the inventory. 
D)  make no additional entry until the end of the period. 
A)  record an increase in inventory corresponding to the amount of the sale. 
B)  record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold. 
C)  record an increase in inventory corresponding to the cost of the inventory. 
D)  make no additional entry until the end of the period.

Question 20

Use this information to answer the following question. Chupka Company experienced the following events during the period:
1. A tabulation of invoices at the end of the day showed $ \$ 800 $ in MasterCard invoices, which were deposited in a bank account at full value less a 5 percent discount.

2.Made a sale on American Express card for $ \$ 400 $ and mailed invoice to American Express for payment. The discount charged by American Express is 4 percent. The entry to record transaction 2 would include a(n)

Accepted Answer

A)  increase in Accounts Receivable for $400. 
B)  increase in Sales for $400. 
C)  decrease in Credit Card Expense for $16. 
D)  decrease in Cash for $384. 
A)  increase in Accounts Receivable for $400. 
B)  increase in Sales for $400. 
C)  decrease in Credit Card Expense for $16. 
D)  decrease in Cash for $384.

Exam 5: The Operating Cycle and Merchandising Operations

In a purchase system,the most appropriate department to control goods upon arrival into the company is the

The purchasing department prepares a purchase requisition addressed to the vendor (seller)containing instructions related to the items ordered.

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

The periodic inventory system relies on a physical count of merchandise for its balance sheet amount.

Which of the following is necessary for computing cost of goods sold but not necessary for computing goods available for sale?

Assuming that net cost of purchases was $58,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500,how much was cost of goods sold?

At the end of each day,the cashier should be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

Taking a physical inventory refers to making a count of all merchandise on hand at a particular time.

Which of the following is not an internal control activity for cash?

Proper control procedures can guarantee the prevention of theft.

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Which of the following documents would be prepared (by a buyer of goods)after the others?

Under the periodic inventory system,cost of goods sold is treated as an account.

Which of the following should not be included in the count of ending merchandise inventory?

From the following data,calculate the amount of gross margin and gross purchases. Ending Merchandise Inventory \1 28 Purchases Returns and Allowances 32 Beginning Merchandise Inventory 160 Sales 1,280 Freight-In 96 Cost of Goods Sold 778 Purchases Discounts 16

Under the perpetual inventory system,in addition to making the entry to record a sale,a company would

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

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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