Deck 10: Questions Karas Kitchens

Question 1

You should use the adjustments journal to record -

A) adjustments to inventory purchase prices from the supplier as an allowance for damages
B) adjustments to inventory sale prices to customers as an allowance for damages
C) adjustments to inventory in stock for damaged goods
D) all of the above

Answer 1

adjustments to inventory in stock for damaged goods

Question 2

To determine how many items you have left in stock, you would print -

A) the inventory and service statistics
B) the inventory quantity report
C) the inventory summary report
D) b & c

Answer 2

the inventory quantity report

Question 3

Why does an inventory purchase not usually include a RST/PST amount -

A) the RST/PST default has not been set up
B) the RST/PST amount was missed and not entered
C) the merchandise is for resale and therefore RST/PST exempt
D) only the GST is required on business purchases

Answer 3

the merchandise is for resale and therefore RST/PST exempt

Question 4

If freight shipping charges had been incorrectly added to a sales invoice, you should correct the entry after posting by -

A) selecting the invoice through the adjust an invoice screen and entering the correction
B) entering the corrected version to correct the posted invoice
C) looking up the invoice and reversing it
D) recording an adjusting general journal entry to correct the freight charges

Question 5

To correct a sales invoice that was accidentally posted containing the wrong inventory -

A) reverse all original data in the sales journal with a minus sign and post; enter new sales data and post
B) open adjust an invoice; locate the invoice; edit the inventory item, add the quantity and post
C) pay the original invoice; prepare an invoice for the correct inventory, add the quantity and post
D) prepare a new invoice for the correct inventory item, add the quantity and post

Question 6

Which statement is not true about inventory linked accounts -

A) accounts cannot be changed when recording an inventory purchase
B) accounts cannot be changed in adjustments journal entries
C) accounts can be changed when recording a sale of inventory
D) the main way to change the linked asset is to edit the ledger record

Question 7

When you complete an item assembly journal entry to assemble new inventory -

A) you must transfer inventory items one at a time
B) additional setup costs are divided equally among the assembled items
C) the quantity of assembled items will decrease
D) the quantity of assembly components will increase

Question 8

If the wrong inventory is selected in a purchase, you can make the correction before posting by -

A) opening a new purchase invoice and entering the correct work
B) selecting the incorrect field, entering the correct item, re-entering the quantity
C) re-selecting the supplier from the suppliers list and recording the purchase from scratch
D) removing the purchase invoice from the edit menu and choosing redo

Question 9

Which of the following statements about inventory is not correct -

A) you can change the default price when you purchase inventory
B) you can change the default price when you sell inventory
C) you can change the default asset account when you purchase inventory
D) you can change the default revenue account when you sell inventory

Question 10

The most recent purchase price becomes the default for the next invoice when -

A) the inventory is over stocked
B) you type in the amount and the quantity, there is no need to calculate unit price
C) a new price has been entered for an inventory purchase
D) a sale causes the inventory level to drop below zero

Question 11

If HST charged had been omitted from a posted inventory sales invoice, you could make the correction by -

A) selecting the invoice through the adjust an invoice screen and adding the tax code that charges HST
B) entering a new corrected invoice
C) changing the tax code settings
D) there is no need to make a correction because HST is not charged on inventory sales

Question 12

Regular inventory purchases and sales journal entries have what in common -

A) both consist entirely of linked accounts
B) the price field in both entries is the same
C) you can edit the account field in both entries
D) the entries have nothing in common

Question 13

Which of the following statements is true about inventory sales journal entries -

A) the revenue account number can be edited
B) a negative quantity must be entered for a sales return
C) displaying the entry before making changes is a good idea
D) all of the above

Question 14

To report on the number of units sold, revenue, cost of goods sold and the net profit, you would display the -

A) inventory transaction report
B) inventory statistics report
C) supplier purchases report
D) inventory sales & services summary report

Question 15

Which of the following general statements is not correct -

A) you can change the selling price for individual sales by editing the price column
B) when a customer returns merchandise the HST charged on sales is debited in the sales return entry
C) enter purchase returns in the adjustments journal to show the decrease in inventory
D) freight expenses that are linked to a single inventory item may be added to the purchase price for the item

Question 16

Which of the following best describes inventory item linked accounts -

A) when you purchase the item, the asset account is debited
B) when you sell the item, the revenue account is credited
C) when you sell the item, the cost of goods sold account is debited
D) all of the above

Question 17

When a store chooses to use an item from its inventory in the store -

A) record a sales invoice because the store is selling the item to itself
B) record a purchase invoice because the store is buying the item from itself
C) record an general journal entry for the transfer of inventory stock
D) none of the above

Question 18

Record inventory that is recovered after a loss has already been recorded -

A) in the general journal using the inventory asset and the damaged/lost inventory expense accounts
B) in the adjustments journal using a positive quantity and the damaged/lost inventory expense account
C) in the adjustments journal using a negative quantity and the damaged/lost inventory expense account
D) in the general journal using the inventory asset and the damaged/lost inventory expense account

Question 19

When you combine a sales return and new sale in a single journal entry -

A) the sales return is recorded by entering a negative sign for the quantity
B) the sale is recorded by entering a positive quantity
C) the total field for the invoice will net out the sale and return
D) all of the above

Question 20

How would you enter a purchase return of an inventory item in the purchases journal-

A) record a negative amount in the price column
B) record a negative quantity in the quantity column
C) record a negative sign in front of the item number
D) all of the above

Question 21

To cancel the interest on an overdue invoice amount after creating a sales invoice for it, you should -

A) open the adjust an invoice screen, click the Delete key and then choose the invoice for the interest charge
B) create a new invoice for a negative amount to offset the interest amount
C) reverse the invoice you created for the interest charge
D) either a or c above

Question 22

The inventory journals may be used for one of the following -

A) all credit purchases of inventory merchandise
B) all cash purchases of inventory merchandise
C) all sales of inventory merchandise
D) all adjustments and item assembly of inventory merchandise

Question 23

When you reverse a pay later invoice that was already paid, Sage 50 Accounting will -

A) reverse the payment for the invoice automatically
B) create a credit entry for Accounts Receivable and a credit note for the customer
C) create a debit entry for Accounts Receivable and a credit note for the customer
D) warn that the invoice has been paid and you cannot reverse it until you reverse the payment

Question 24

Typing a letter or number of an inventory code in the Item Number field of the sales journal -

A) allows you to see a reduced inventory drop-down list
B) opens the Add Inventory Item Wizard
C) opens a Sage 50 Accounting error message that the code is not valid
D) none of the above

Question 25

Which one of the following statements about the item assembly journal is not true -

A) it is used for setting aside or marking inventory as reserved
B) it is used to transfer inventory for general store use
C) it is used for creating packages of inventory items
D) entries should be stored to make corrections easier

Question 26

Which of the following best describes the selection of inventory items in the sales journal -

A) selection lists are available only from the Item Number field list icon or by double clicking the Item Number field
B) selection lists in the Item Description fields are sorted by inventory name or description
C) you cannot create new inventory items from the sales journal
D) both a and c are correct

Question 27

Transactions entered in the inventory journals will allow all but one of the following -

A) recording of customer and supplier invoices involving inventory
B) adjustments for lost, stolen or damaged goods
C) transfers from one inventory item to another
D) the assembly of various inventory items into one finished product

Question 28

You should store item assembly journal transactions before posting because -

A) these transactions are always repeated
B) you may refer to them if you have made an error
C) there is no journal entry for the transactions
D) b and c above

Question 29

To see a complete list of selling prices for inventory items you would -

A) choose the price list report and select all items and prices
B) choose the inventory list and select all items and prices
C) choose the customer sales report and select all items and prices
D) all of the above methods will show you the prices

Question 30

When you see the message that a sale has caused one or more items to drop below the reorder point, you should -

A) cancel the sale
B) reduce the quantity for the sale
C) review the inventory statistics reports to see the items that you need to reorder
D) review the inventory quantity reports to see the items that you need to reorder

Question 31

A business that provides only services -

A) can use the Inventory and Services module
B) cannot use the Inventory and Services module
C) must buy the services from an external supplier in order to use the Inventory and Services module
D) must have standard prices for the services in order to use the Inventory and Services module

Question 32

The Inventory module window has journal icons for -

A) inventory sales and inventory purchases
B) item assembly and inventory adjustments
C) inventory sales and inventory adjustments
D) all of the above

Question 33

When setting up a new inventory item that is combined from other items -

A) enter each of the original items one at a time
B) enter all the original items together
C) set up an inventory ledger record, name the item, record the linked accounts
D) none of the above

Question 34

The discount amount for the sale of inventory items to a preferred customer appears in the journal entry as -

A) a credit to the linked sales discount revenue account
B) a debit to the linked sales discount revenue account
C) a decreased amount for the linked sales revenue account
D) an increased amount for the linked sales revenue account

Question 35

In the sales journal, inventory item selection lists are available from -

A) the Item Number field list icon
B) the Item Number field list arrow
C) the Item Description field
D) all of the above