Question 1

The entry to record the return of goods to a supplier under the perpetual inventory system,including GST,is:

Accepted Answer

A) Debit Inventory,credit Purchases Returns,credit GST outlays 
B) Debit Accounts Payable,credit Purchases,credit GST outlays 
C) Debit Inventory,debit GST outlays,credit Accounts Payable 
D) Debit Accounts Payable,credit Inventory,credit GST outlays 
A) Debit Inventory,credit Purchases Returns,credit GST outlays 
B) Debit Accounts Payable,credit Purchases,credit GST outlays 
C) Debit Inventory,debit GST outlays,credit Accounts Payable 
D) Debit Accounts Payable,credit Inventory,credit GST outlays D

Question 2

Which statement concerning the gross profit ratio is not true?

Accepted Answer

A) A decline in the ratio represents an unfavourable trend 
B) It is calculated as gross profit divided by net sales 
C) It can be compared with ratios for similar businesses 
D) A decline in the ratio can be caused by decreases in the cost of sales 
A) A decline in the ratio represents an unfavourable trend 
B) It is calculated as gross profit divided by net sales 
C) It can be compared with ratios for similar businesses 
D) A decline in the ratio can be caused by decreases in the cost of sales D

Question 3

The p___________ inventory system is a shortcut system that determines cost of sales by taking a physical count of inventory and assuming any goods not on hand have been sold.

Accepted Answer

periodic

Question 4

Under GST Goods and Services Tax legislation in Australia a tax invoice must be issued for all sales in excess of:

Accepted Answer

A) $75 
B) $20 
C) $10 
D) $100 
A) $75 
B) $20 
C) $10 
D) $100

Question 5

In the Income Statement for a retailer it is true that:

Accepted Answer

A) The cost of sales section is identical no matter whether the periodic or perpetual system of inventory recording is used 
B) Rent revenue is added to sales revenue to calculate gross profit 
C) Under the periodic system freight inwards is added to the cost of purchases 
D) Expenses are classified into the groupings Selling Expenses; Distribution Expenses and Administrative and Finance expenses. 
A) The cost of sales section is identical no matter whether the periodic or perpetual system of inventory recording is used 
B) Rent revenue is added to sales revenue to calculate gross profit 
C) Under the periodic system freight inwards is added to the cost of purchases 
D) Expenses are classified into the groupings Selling Expenses; Distribution Expenses and Administrative and Finance expenses.

Question 6

GST is credited to the GST collections account when a sale occurs.If goods are returned or a discount allowed the _______________ account must be debited with an adjustment for GST.

Accepted Answer

A) GST collections 
B) GST outlays 
C) Purchases 
D) Discount received 
A) GST collections 
B) GST outlays 
C) Purchases 
D) Discount received

Question 7

ABN stands for A__________ B__________ N__________

Accepted Answer

Australian

Question 8

Under the perpetual inventory system the entry to record the cost price of goods sold on credit is:

Accepted Answer

A) Debit Inventory,credit Cost of sales 
B) Debit Cost of sales,credit Inventory,credit GST Outlays 
C) Debit Cost of sales,credit Inventory 
D) Debit Cost of sales,credit Purchases 
A) Debit Inventory,credit Cost of sales 
B) Debit Cost of sales,credit Inventory,credit GST Outlays 
C) Debit Cost of sales,credit Inventory 
D) Debit Cost of sales,credit Purchases

Question 9

With the periodic inventory system what does the opening balance in the inventory account represent?

Accepted Answer

A) Inventory on hand at the end of the previous period as determined by a physical stocktake 
B) Inventory on hand at the end of the current period as determined by a physical stocktake 
C) The book figure for current inventory adjusted for all purchases and sales 
D) Inventory loss 
A) Inventory on hand at the end of the previous period as determined by a physical stocktake 
B) Inventory on hand at the end of the current period as determined by a physical stocktake 
C) The book figure for current inventory adjusted for all purchases and sales 
D) Inventory loss

Question 10

Under the perpetual inventory system what is the correct entry to record the cost of the sale of 2 electric guitars sold to a customer at $550 per guitar including GST? The guitars were originally purchased on credit at $250 each plus GST of $25 per guitar.

Accepted Answer

A) Debit cost of sales $1 100; credit sales $1 100 
B) Debit cost of sales $500; credit inventory $500 
C) Debit cost of sales $1 000; credit inventory $1 000 
D) Debit cost of sales $500,debit GST outlays $50; credit inventory $550 
A) Debit cost of sales $1 100; credit sales $1 100 
B) Debit cost of sales $500; credit inventory $500 
C) Debit cost of sales $1 000; credit inventory $1 000 
D) Debit cost of sales $500,debit GST outlays $50; credit inventory $550

Question 11

The __________ account is an expense account used in a periodic inventory system to accumulate the cost of inventory acquired for resale.

Accepted Answer

The answer of The __________ account is an expense account...

Question 12

Calculate purchases for 2011: - $\quad$Inventory $31 / 12 / 2010 \quad \$ 32500$
- $\quad$Inventory $31 / 12 / 2011 \quad 34000$
- $\quad$ Cost of sales during $2011 \quad \$ 128000$

Accepted Answer

A) $126 500 
B) $123 500 
C) $129 500 
D) $132 500 
A) $126 500 
B) $123 500 
C) $129 500 
D) $132 500

Question 13

The formula for calculating the gross profit ratio is:

Accepted Answer

A) Gross profit after tax/sales 
B) Cost of sales/sales 
C) Gross profit /sales 
D) Sales/gross profit 
A) Gross profit after tax/sales 
B) Cost of sales/sales 
C) Gross profit /sales 
D) Sales/gross profit

Question 14

Which statement relating to inventory is not correct?

Accepted Answer

A) It is classified as a non-current asset in the balance sheet 
B) It makes up a significant portion of a retailer's assets 
C) It is a very active asset,continually being acquired,sold and replaced 
D) Another name for inventory is stock-in-trade 
A) It is classified as a non-current asset in the balance sheet 
B) It makes up a significant portion of a retailer's assets 
C) It is a very active asset,continually being acquired,sold and replaced 
D) Another name for inventory is stock-in-trade

Question 15

In Australia,where most accounting is computerised,the use of the periodic inventory system is declining.Which of the following businesses is still most likely to use the periodic approach to accounting for inventory?

Accepted Answer

A) Chemist shop 
B) Supermarket 
C) Fruit and vegetable shop 
D) Service station 
A) Chemist shop 
B) Supermarket 
C) Fruit and vegetable shop 
D) Service station

Question 16

The primary purpose of cash)settlement discounts is to:

Accepted Answer

A) Convince the customer to buy the goods on credit 
B) Facilitate the quoting of prices to different customer groups 
C) Reduce the invoice price of the goods 
D) Encourage the customer to settle their account early 
A) Convince the customer to buy the goods on credit 
B) Facilitate the quoting of prices to different customer groups 
C) Reduce the invoice price of the goods 
D) Encourage the customer to settle their account early

Question 17

If beginning inventory was $10 000,purchases during the period totalled $25 000,freight-in was $1,000 and ending inventory was $11 000,calculate the cost of sales?

Accepted Answer

A) $26 000 
B) $25 000 
C) $24 000 
D) $15 000 
A) $26 000 
B) $25 000 
C) $24 000 
D) $15 000

Question 18

Z,sold goods to X on credit at a price of $4,400 including GST.The entry to record this transaction in Z's books under either the perpetual or periodic inventory system is ignore the transfer to COS required under the perpetual system):

Accepted Answer

A) Debit accounts receivable $4,400,credit sales $4,400 
B)  Debit accounts receivable $ \$ 4,000 $, credit sales $ \$ 4,000 $ 
C)  Debit accounts receivable $ \$ 4,000 $, deb it GST collections $ \$ 400 $; credit sales $ \$ 4,400 $ 
D)  Debit accounts receivable $ \$ 4,400 $, credit sales $ \$ 4,000 $, credit GST collections $ \$ 400 $ 
A) Debit accounts receivable $4,400,credit sales $4,400 
B)  Debit accounts receivable $ \$ 4,000 $, credit sales $ \$ 4,000 $ 
C)  Debit accounts receivable $ \$ 4,000 $, deb it GST collections $ \$ 400 $; credit sales $ \$ 4,400 $ 
D)  Debit accounts receivable $ \$ 4,400 $, credit sales $ \$ 4,000 $, credit GST collections $ \$ 400 $

Question 19

I __________ consists of goods acquired for resale in the normal course of business.

Accepted Answer

The answer of I __________ consists of goods acquired for...

Question 20

The average length of time it takes for a retail business to acquire inventory,sell it to its customers and collect the cash owing is called the:

Accepted Answer

A) Inventory turnover 
B) Operating cycle 
C) Cost of sales 
D) Gross profit 
A) Inventory turnover 
B) Operating cycle 
C) Cost of sales 
D) Gross profit

Exam 6: Accounting for Retailing

The entry to record the return of goods to a supplier under the perpetual inventory system,including GST,is:

Which statement concerning the gross profit ratio is not true?

The p___________ inventory system is a shortcut system that determines cost of sales by taking a physical count of inventory and assuming any goods not on hand have been sold.

Under GST Goods and Services Tax legislation in Australia a tax invoice must be issued for all sales in excess of:

In the Income Statement for a retailer it is true that:

GST is credited to the GST collections account when a sale occurs.If goods are returned or a discount allowed the _______________ account must be debited with an adjustment for GST.

ABN stands for A__________ B__________ N__________

Under the perpetual inventory system the entry to record the cost price of goods sold on credit is:

With the periodic inventory system what does the opening balance in the inventory account represent?

Under the perpetual inventory system what is the correct entry to record the cost of the sale of 2 electric guitars sold to a customer at $550 per guitar including GST? The guitars were originally purchased on credit at $250 each plus GST of $25 per guitar.

The __________ account is an expense account used in a periodic inventory system to accumulate the cost of inventory acquired for resale.

Calculate purchases for 2011: - \quad Inventory 31/12/2010$3250031 / 12 / 2010 \quad \$ 3250031/12/2010$32500 - \quad Inventory 31/12/20113400031 / 12 / 2011 \quad 3400031/12/201134000 - \quad Cost of sales during 2011$1280002011 \quad \$ 1280002011$128000

The formula for calculating the gross profit ratio is:

Which statement relating to inventory is not correct?

In Australia,where most accounting is computerised,the use of the periodic inventory system is declining.Which of the following businesses is still most likely to use the periodic approach to accounting for inventory?

The primary purpose of cash)settlement discounts is to:

If beginning inventory was $10 000,purchases during the period totalled $25 000,freight-in was $1,000 and ending inventory was $11 000,calculate the cost of sales?

Z,sold goods to X on credit at a price of $4,400 including GST.The entry to record this transaction in Z's books under either the perpetual or periodic inventory system is ignore the transfer to COS required under the perpetual system):

I __________ consists of goods acquired for resale in the normal course of business.

The average length of time it takes for a retail business to acquire inventory,sell it to its customers and collect the cash owing is called the:

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Internal Control

Cost-Volume-Profit Analysis for Decision Making

Budgeting for Planning and Control

Performance Evaluation for Managers

Differential Analysis,profitability Analysis and Capital Budgeting

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Liabilities

Analysis and Interpretation of Financial Statements

Filters

ABN stands for A B N__

Calculate purchases for 2011: - $\quad$ Inventory $31 / 12 / 2010 \quad \$ 32500$ - $\quad$ Inventory $31 / 12 / 2011 \quad 34000$ - $\quad$ Cost of sales during $2011 \quad \$ 128000$