Quiz
Test 4 - Chapter 5
Erstelle ein kostenloses Konto, um dieses Quiz zu beenden
Speichere deinen Fortschritt und sieh dir dein Endergebnis an.
oder mit deiner E-Mail registrieren
Schon ein Konto? Anmelden
Fragen in diesem Quiz (45)
1A merchandiser differs from a service business in that it
- Ais more profitable
- Bmakes, buys, sells goods to customers
- Chas greater cash flow
- Drequires more government regulation
2Two categories of expenses in merchandising companies are
- Acost of goods sold and financial expenses
- Bcost of goods sold and financing expenses
- Ccost of goods sold and operating expenses
- Dsales and cost of goods sold
3The primary source of revenue for a service company is
- AInvestment income
- BService revenue
- CThe sale of merchandise
- DThe sale of capital assets the company owns
4Service revenue less operating expenses is called
- Agross profit
- Bnet profit
- Cnet income
- Dmarginal income
5The operating cycle of a service company differs from that of a merchandising company in that
- Ais usually longer in days
- Bis usually shorter in days
- Cinvolves the purchase of inventory
- Dinvolves the sale of merchandise
6Which of the following formulas in incorrect
- Agross profit - operating expenses = net income
- Bsales - cost of goods sold - operating expenses = net income
- Cnet income + operating expenses = gross profit
- Doperating expenses - cost of goods sold = gross profit
7With respect to the income statement
- Acontra-revenue accounts do not appear on the income statement
- Bcontra-revenue accounts increase the amount of operating expenses
- Ccost of goods sold reduces gross profit
- Dnone of the above
8The journal entry to record the return of merchandise purchased on account under a perpetual inventory system would credit
- AA/P
- BPurchases R & A
- CSales
- DMerchandise Inventory
9Under a perpetual inventory system, acquisition of merchandise for resale is debited to the
- Amerchandise inventory account
- Bcost of goods sold account
- Csupplies account
- Dpurchases account
10Under a perpetual inventory system, cost of goods sold is recorded
- Aon a daily basis
- Bon a monthly basis
- Con an annual basis
- Dwith each sale
11If ABC's accounting records should, using a perpetual inventory system, an ending inventory balance of $25 000 and a physical count shows $23 000, it is important to
- Adebit your inventory records
- Bpurchase additional inventory
- Cremove the nonexistent inventory from your records
- Dcredit cost of goods sold
12Detailed records of goods held for resale are not maintained undera a
- Aperpetual inventory system
- Bperiodic inventory system
- Cdouble-entry accounting system
- Dsingle-entry accounting system
13Babcock Co. purchased merchandise from Gerber Co. with freight terms of FOB shipping point. The freight costs will be paid by the
- Aseller
- Bbuyer
- Ctransportation company
- Dbuyer and seller
14Wright Co. recently made a purchase of $10 000 from a major supplier. Shipping costs were $200, terms FOB shipping point. To record this purchase, Wright Co. will need to debit the
- AMerchandise Inventory account for $10 000
- BCost of Goods Sold account for $200
- CMerchandise Inventory account for $10 200
- DCost of Goods Sold account for $10 200
15Benders Shoe Store had a beginning merchandise inventory of $18 000. During the period, purchases were $70 000; purchase returns, $3 000; and freight in, $6 000. A physical count of inventory at the end of the period revealed that $12 000 was still on hand. Using a perpetual inventory system, CoGS was
- A$88k
- B$79k
- C$91k
- D$85k
16The Sales R&A account is classified as
- Aan asset
- Ba contra-asset
- Can expense
- Da contra-revenue
17A sales invoice is a a source document that
- Aprovides support for goods purchased for resale
- Bprovides evidence of incurred operating expenses
- Cprovides evidence of credit sales
- Dserves only as a customer receipts
18The journal entry to record a shortage of inventory at the end of the accounting period is
- ACost of Goods Sold
Merchandise Inventory - BMerchandise Inventory
Service Revenue - CAccounts Receivable
Service Revenue - DAccounts Receivable
Merchandise Inventory
- ACost of Goods Sold
19Sales revenue
- Amay be recorded before cash is collected
- Bwill always equal cash collections in a month
- Conly results from credit sales
- Dis only recorded after cash is collected
20A Sales R&A account is not debited if
- Aa customer returns defective merchandise
- Ba customer receives a credit for merchandise of inferior quality
- Ca customer returns goods that are not in accordance with specifications
- Da buyer returns defective merchandise
21If a customer agrees to keep merchandise that is defective because the seller is willing to reduce the price, this transaction is known as a sales
- Adiscount
- Breturn
- Cmistake
- Dallowance
22When goods are returned that relate to a prior cash sale
- Athe Sales R&A account should not be used
- Bthe Cash account will be credited
- CSales R&A will be credited
- DA/R will be credited
23The Sales R&A account does not provide info to management about
- Apossible inferior merchandise
- Bthe percentage of credits vs cash sales
- Cinefficiencies in filling orders
- Dcustomers may be dissatisfied with the products
24Which of the following accounts has a normal credit balance?
- ASales R&A
- BFreight Out
- CSales
- DCost of Goods Sold
25Tokyo Co sells merchandise on account for $1 200 (cost $750) to Thomas Co. Thomas Co returns $00 (cost $250) of merchandise that was damaged, along with a cheeque to settle the account. What entry does Tokyo Co make upon receipt of the cheque?
- ACash 1 200, Sales 1 200
- BSales R&A 250, Cost of Goods Sold 250
- CCash 800 and Merchandise Inventory 400, A/R 1 200
- DCash 800, A/R 800
26Which of the following is a true statement about inventory systems
- Aperiodic inventory systems require more detailed inventory records
- Bperpetual inventory systems require more detailed inventory records
- Cperiodic inventory systems requires cost of goods sold to be determined with each sale
- Dperpetual inventory systems are specifically meant for companies that sell low unit value items
27A physical inventory should be taken
- Aafter every purchase of merchandise
- Bafter every sale
- Cat or near the balance sheet date
- Donly if a manual account system is used
28Northend Electric returned to Southerby Inc 5 damaged fuses. Southerby accepted the return and refunded the $200 Northend had paid for the order. To record this return, Southerby accountant must
- ACash; Sales
- BSales R&A; Cash
- CCash; Merchandise Inventory
- DCost of Goods Sold; Merchandise Inventory
29In a perpetual inventory system, the Merchandise Inventory account must equal the actual merchandise on hand
- Aat all times
- Bonly after the physical inventory count has occured
- Conly at the beginning of the accounting period
- Donly at the end of the accounting period
30Taking a physical inventory count involves all of the following except
- Acounting the units on hand
- Bapplying unit costs to the total inventory on hand for each item of inventory
- Cevaluating whether inventory needs to be written off as obsolete
- Dtotaling the cost of each item of inventory determine the total cost of goods on hand
31If a purchaser using a perpetual system agrees to freight terms of FOB destination, then the
- AMerchandise Inventory account will be increased
- BMerchandise Inventory account will be decreased
- CMerchandise account will not be affected
- DCost of Goods Sold account will be increased
32Freight costs paid by a seller on merchandise sold to customers will cause an increase
- Ain the selling expense of the buyer
- Bin operating expenses for the seller
- Cto the cost of goods sold for the seller
- Dto the Merchandise Inventory account for the seller
33Using a perpetual inventory system, the respective normal account balances balances of Merchandise Inventory, Sales R&A, Cost of Goods Sold are
- Acredit, credit, credit
- Bdebit, debit, debit
- Cdebit, credit, credit
- Ddebit, debit, credit
34Income from operations will result if
- Athe cost of goods sold exceeds operating expenses
- Brevenues exceed cost of goods sold
- Crevenues exceed operating expenses
- Dgross profit exceeds operating expense
35If a company has net sales of 500 000 and cost of goods sold of 350 000, the gross profit percentage is
- A70%
- B30%
- C15%
- D100%
36Gross profit does not appear
- Aon a multiple-step income statement
- Bon a single-step income statement
- Cto be relevant in analyzing the operating of a merchandising company
- Don the income statement if the periodic system is used because it cannot be calculated
37Kerr Co has a beginning merchandise inventory at 17 000 an ending merchandise inventory of 20 000 and a cost of goods sold of 20 000. Inventory turnover is calculated to be
- A5.41 times
- B11.76 times
- C10.81 times
- D0.10 times
38Inventory Turnover measures the number of times inventory is
- Apurchased
- Bsold
- Creturned
- Dpaid for
39In preparing closing entries for a merchandising companies, the owner's capital account will be debited for the balance of the
- ASales Revenue
- BCost of Goods Sold
- CEnding Inventory
- DCash
40The Merchandise Inventory account account balance appearing in an unadjusted trial balance under a perpetual inventory system represents the
- Aending inventory
- Bbeginning inventory
- Ccost of merchandise purchased
- Dcost of merchandise sold
41On a classified balance sheet, merchandise inventory is classified as a
- Acurrent liability
- Bcapital asset
- Ccurrent asset
- Dlong-term investment
42The cost of goods sold account
- Ais a temporary account
- Bis a permenant account
- Cappears on the balance sheet as an asset
- Dappears on the income statement as an operating expense
43When using a perpetual inventory system, the adjusting entry required when merchandise inventory records do not agree with the physical account
- Ahas an effect on cost of goods sold
- Bhas no effect on cost of goods sold
- Crequires reporting a loss when actual is higher than records
- Drequires reporting a gain when actual is lower than records
44When recording a credit sale, all of the following accounts are affected except
- Asales
- Ba/r
- Cmerchandise inventory
- Dcash
45Toby Co purchased 10 000 in merchandise and sold it six months later 18 000, At the time of the sale, Toby will
- Adebit the cost of goods sold account for 18 000
- Bdebit the cost of goods sold account for 10 000
- Ccredit the cost of goods sold account for 18 000
- Dcredit the cost of goods sold account for 10 000
Informationen
- Beschreibung
- Grade 12 Accounting Midterm Prep
- Autor
- Claudia Voin
- Sprache
- English
- Aufrufe
- 241
- Schlagwörter
- Bewertung
- Noch keine Bewertungen Bewerte dieses Quiz