Deck 10: Merchandising Corporation: Sales, Purchases and Inventory

Question 1

When creating a new QuickBooks data file for an existing company, opening balances are added when you:

A)Customize the Chart of Accounts
B)Add vendors to the vendor list
C)Add customers to the customer list
D)Add inventory the item list

Answer 1

A

Question 2

A CPA firm is an example of a _________ company.

A)Service
B)Retail Shop
C)Manufacturing
D)Product-based business

Answer 2

A

Question 3

If the supplies on hand at the end of January totaled $200 and the Supplies on Hand account before adjustment is $900, what would be the adjustment at month-end?

A)Reduce supplies on hand by $700; increase supplies expense by $700
B)Increase supplies on hand by $900; reduce supplies expense by $900
C)Reduce supplies on hand by $200; increase supplies expense by $200
D)Increase supplies on hand by $200; reduce supplies expense by $200

Answer 3

A

Question 4

When using QuickBooks, sales tax is:

A)Calculated manually for each item sold
B)Calculated for all items that are listed on an invoice
C)Calculated automatically by QuickBooks for items flagged as taxable
D)All the above

Question 5

The Chart of Accounts:

A)Verifies the accounting system is in balance
B)Helps detect errors
C)Lists all accounts
D)All of the above

Question 6

The cost of the inventory items sold is tracked in what account?

A)Items Sold
B)Cost of Goods Sold
C)Cost of Materials
D)Inventory Sold

Question 7

A grocery store is an example of a _________ company.

A)Service
B)Retail Shop
C)Manufacturing
D)Product-based business

Question 8

When creating a new QuickBooks data file for an existing company, QuickBooks automatically off sets accounts payable balances with an entry to the:

A)Uncategorized Expenses account
B)Uncategorized Income account
C)Opening Balance Equity account
D)Capital Stock account

Question 9

When recording the sale of a product, which account is decreased?

A)Inventory
B)Accounts Receivable
C)Notes Payable
D)None of the above

Question 10

When you place an order for items from a vendor, which one of the following QuickBooks forms would you use?

A)Create Invoice
B)Purchase Order
C)Receive Inventory
D)None of the above

Question 11

After creating a new QuickBooks data file for an existing company and entering all the existing balances, use an opening adjustment to move the balance in the _________ account to the Capital Stock account.

A)Uncategorized Expenses
B)Uncategorized Income
C)Opening Balance Equity
D)None of the above

Question 12

Retail customers:

A)Pay no sales tax
B)Pay sales tax
C)Pay a manufacturing tax
D)Pay sales tax on labor only

Question 13

When using QuickBooks, your accounting system includes which of the following steps?

A)Enter vendor list
B)Record transactions
C)Prepare reports
D)All of the above

Question 14

The purchasing cycle includes all of the following transactions except:

A)Create a purchase order to order inventory.
B)Enter hours in the time sheet for stocking inventory.
C)Receive inventory items and record in the inventory account.
D)Enter bill in QuickBooks when bill is received.

Question 15

To customize your QuickBooks color scheme, choose Desktop View > _______

A)Company Preferences
B)My Preferences
C)Color Preferences
D)Scheme Options

Question 16

Inventory items received should be compared against:

A)Purchase order
B)Sales order
C)Supplies inventory
D)Sales receipt

Question 17

When setting up an existing company in QuickBooks, which of the following opening adjustments require journal entries?

A)When accounts payable opening balances create Uncategorized Expenses
B)When the Customer List is created
C)When payroll entries are added
D)None of the above

Question 18

To see the account numbers in the Chart of Accounts, choose:

A)Edit > Preferences > Accounting > Company Preferences
B)Edit > Preferences > Desktop View > Company Preferences
C)Edit > Preferences > General > My Preferences
D)Edit > Preferences > General > Company Preferences

Question 19

When creating a new QuickBooks data file for an existing company, QuickBooks automatically off sets accounts receivable balances with an entry to the:

A)Uncategorized Expenses account
B)Uncategorized Income account
C)Opening Balance Equity account
D)Capital Stock account

Question 20

To add an existing opening balance to a new account, choose:

A)New Account > Opening Balance
B)Account Options > Enter Opening Balance
C)Account > Opening Balance
D)Edit Account > Enter Opening Balance

Question 21

The sales transaction cycle for a merchandising company is:

A)Create Purchase Order > Receive Inventory > Record Bill > Pay Bill > Print Check
B)Create Invoice > Receive Payment > Record Deposits
C)Create Purchase Order > Receive Payment > Record Deposits
D)Create Invoice > Receive Inventory > Pay Bill > Record Deposits

Question 22

The purchasing transaction cycle for a merchandising company is:

A)Create Purchase Order > Receive Inventory > Record Bill > Pay Bill > Print Check
B)Create Invoice > Receive Payment > Record Deposits
C)Create Purchase Order > Receive Payment > Record Deposits
D)Create Invoice > Receive Inventory > Pay Bill > Record Deposits

Question 23

Name 2 (two) differences between accounting for a service company and a retail shop.

Question 24

Wholesale customers:

A)Pay no sales tax
B)Pay sales tax
C)Pay a manufacturing tax
D)Pay sales tax on labor only
Short Answer Questions

Question 25

When creating a new QuickBooks data file for an existing company, QuickBooks automatically off sets inventory item balances with an entry to the:

A)Uncategorized Expenses account
B)Uncategorized Income account
C)Opening Balance Equity account
D)Capital Stock account

Question 26

Briefly explain how the supplies on hand account is adjusted at the end of the period.

Question 27

QuickBooks classifies the sales tax rate as a(n):

A)Customer List item
B)Vendor List item
C)Item not stored in the accounting system
D)Inventory item (Item List)