Factors that shape an accounting information system include the
Debit always means
A trial balance
Which of the following is a real (permanent) account?
Nominal accounts are also called
Friday, 14 October 2016
Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise
- Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?
| a. | debit Cash, $1,250; credit Sales, $1,250 | |
| b. | debit Accounts Receivable, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250 | |
| c. | debit Cash, $2,000; credit Merchandise Inventory, $1,250 | |
| d. | debit Cash, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250 |
Answer = d
- Taking advantage of a 2/10, n/30 purchases discount is equal to a savings yearly rate of approximately
| a. | 36% | |
| b. | 20% | |
| c. | 24% | |
| d. | 2% |
Answer = a
- Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a
| a. | debit to Sales, debit to Credit Card Expense, and a credit to Cash | |
| b. | debit to Cash and a credit to Sales | |
| c. | debit to Cash, credit to Credit Card Expense, and a credit to Sales | |
| d. | debit to Bank Credit Card Sales, debit to Credit Card Expense, and a credit to Sales |
Answer = b
Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a
- Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a
| a. | debit to Merchandise Inventory | |
| b. | credit to Accounts Receivable | |
| c. | debit to Sales | |
| d. | credit to Merchandise Inventory |
Answer = d
- If the seller is to pay the freight costs of delivering merchandise, the delivery terms are stated as
| a. | FOB seller | |
| b. | FOB destination | |
| c. | FOB shipping point | |
| d. | FOB n/30 |
Answer = b
- The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include
| a. | only the list price | |
| b. | the list price plus the sales tax | |
| c. | only the sales tax | |
| d. | the list price less the sales tax |
Answer = b
- Inventory shrinkage is recorded when
| a. | merchandise is returned by a buyer | |
| b. | merchandise purchased from a seller is incomplete or short | |
| c. | merchandise is returned to a seller | |
| d. | there is a difference between a physical count of inventory and inventory records |
Answer = d
Net income plus operating expenses is equal to
Net income plus operating expenses is equal to
| a. | Sales | |
| b. | gross profit | |
| c. | cost of merchandise available for sale | |
| d. | cost of merchandise sold |
Answer = b
A company, using the periodic inventory system, has merchandise inventory costing $210 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is
| a. | $685 | |
| b. | $265 | |
| c. | $635 | |
| d. | $795 |
Answer = a
The inventory system employing accounting records that continuously disclose the amount of inventory is called
| a. | perpetual | |
| b. | periodic | |
| c. | physical | |
| d. | Retail |
Answer = a
Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a
Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a
| a. | debit to Cash | |
| b. | credit to Merchandise Inventory | |
| c. | debit to Merchandise Inventory | |
| d. | credit to Customer Refunds Payable |
Answer = c
When the three sections of a balance sheet are presented on a page in a downward sequence, it is called the
| a. | account form | |
| b. | horizontal form | |
| c. | report form | |
| d. | comparative form |
Answer = c
A chart of accounts for a merchandising business
| a. | usually is the same as the chart of accounts for a service business | |
| b. | usually is standardized by the FASB for all merchandising businesses | |
| c. | always uses a three-digit numbering system | |
| d. | usually requires more accounts than does the chart of accounts for a service business |
Answer = d
Under the perpetual inventory system, all purchases of merchandise are debited to the account
| a. | Cost of Merchandise Available for Sale | |
| b. | Cost of Merchandise Sold | |
| c. | Purchases | |
| d. | Merchandise Inventory |
Answer = d
The statement of owner's equity shows
The statement of owner's equity shows
| a. | beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals | |
| b. | only net income, beginning capital, and withdrawals | |
| c. | only total assets, beginning and ending capital | |
| d. | only net income, beginning and ending capital |
Answer = a
What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?
| a. | income from operations | |
| b. | gross sales | |
| c. | net income | |
| d. | gross profit |
Answer = d
Merchandise subject to terms 2/10, n/30, FOB shipping point, is sold on account to a customer for $25,000. What is the amount of the sales discount allowable?
| a. | $150 | |
| b. | $500 | |
| c. | $460 | |
| d. | $260 |
Answer = b
Merchandise is ordered on November 10; the merchandise is shipped by the seller and the invoice is prepared, dated, and mailed by the seller on November 13; the merchandise is received by the buyer on November 18; the entry is made in the buyer's accounts on November 20. The credit period begins with what date?
| a. | November 10 | |
| b. | November 18 | |
| c. | November 20 | |
| d. | November 13 |
Answer = b
The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be
The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be
| a. | Jan. 1 Office Supplies 1,500 Cash 1,500 | |
| b. | Jan. 1 Purchases 1,500 Accounts Payable 1,500 | |
| c. | Jan. 1 Cash 1,500 Accounts Receivable 1,500 | |
| d. | Jan. 1 Merchandise Inventory 1,500 Cash 1,500 |
If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are
| a. | FOB destination | |
| b. | consigned | |
| c. | FOB shipping point | |
| d. | n/30 |
The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be
| a. | Jan. 1 Merchandise Inventory 1,600 Accounts Payable 1,600 | |
| b. | Jan. 1 Purchases 1,600 Accounts Receivable 1,600 | |
| c. | Jan. 1 Office Supplies 1,600 Accounts Payable 1,600 | |
| d. | Jan. 1 Purchases 1,600 Accounts Payable 1,600 |
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