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Test 4 - Chapter 5

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Grade 12 Accounting Midterm Prep
Claudia Voin
Quiz por Claudia Voin, atualizado more than 1 year ago
Claudia Voin
Criado por Claudia Voin mais de 9 anos atrás
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Resumo de Recurso

Questão 1

Questão
A merchandiser differs from a service business in that it
Responda
  • is more profitable
  • makes, buys, sells goods to customers
  • has greater cash flow
  • requires more government regulation

Questão 2

Questão
Two categories of expenses in merchandising companies are
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  • cost of goods sold and financial expenses
  • cost of goods sold and financing expenses
  • cost of goods sold and operating expenses
  • sales and cost of goods sold

Questão 3

Questão
The primary source of revenue for a service company is
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  • Investment income
  • Service revenue
  • The sale of merchandise
  • The sale of capital assets the company owns

Questão 4

Questão
Service revenue less operating expenses is called
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  • gross profit
  • net profit
  • net income
  • marginal income

Questão 5

Questão
The operating cycle of a service company differs from that of a merchandising company in that
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  • is usually longer in days
  • is usually shorter in days
  • involves the purchase of inventory
  • involves the sale of merchandise

Questão 6

Questão
Which of the following formulas in incorrect
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  • gross profit - operating expenses = net income
  • sales - cost of goods sold - operating expenses = net income
  • net income + operating expenses = gross profit
  • operating expenses - cost of goods sold = gross profit

Questão 7

Questão
With respect to the income statement
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  • contra-revenue accounts do not appear on the income statement
  • contra-revenue accounts increase the amount of operating expenses
  • cost of goods sold reduces gross profit
  • none of the above

Questão 8

Questão
The journal entry to record the return of merchandise purchased on account under a perpetual inventory system would credit
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  • A/P
  • Purchases R & A
  • Sales
  • Merchandise Inventory

Questão 9

Questão
Under a perpetual inventory system, acquisition of merchandise for resale is debited to the
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  • merchandise inventory account
  • cost of goods sold account
  • supplies account
  • purchases account

Questão 10

Questão
Under a perpetual inventory system, cost of goods sold is recorded
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  • on a daily basis
  • on a monthly basis
  • on an annual basis
  • with each sale

Questão 11

Questão
If 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
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  • debit your inventory records
  • purchase additional inventory
  • remove the nonexistent inventory from your records
  • credit cost of goods sold

Questão 12

Questão
Detailed records of goods held for resale are not maintained undera a
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  • perpetual inventory system
  • periodic inventory system
  • double-entry accounting system
  • single-entry accounting system

Questão 13

Questão
Babcock Co. purchased merchandise from Gerber Co. with freight terms of FOB shipping point. The freight costs will be paid by the
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  • seller
  • buyer
  • transportation company
  • buyer and seller

Questão 14

Questão
Wright 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
Responda
  • Merchandise Inventory account for $10 000
  • Cost of Goods Sold account for $200
  • Merchandise Inventory account for $10 200
  • Cost of Goods Sold account for $10 200

Questão 15

Questão
Benders 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
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  • $88k
  • $79k
  • $91k
  • $85k

Questão 16

Questão
The Sales R&A account is classified as
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  • an asset
  • a contra-asset
  • an expense
  • a contra-revenue

Questão 17

Questão
A sales invoice is a a source document that
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  • provides support for goods purchased for resale
  • provides evidence of incurred operating expenses
  • provides evidence of credit sales
  • serves only as a customer receipts

Questão 18

Questão
The journal entry to record a shortage of inventory at the end of the accounting period is
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  • Cost of Goods Sold Merchandise Inventory
  • Merchandise Inventory Service Revenue
  • Accounts Receivable Service Revenue
  • Accounts Receivable Merchandise Inventory

Questão 19

Questão
Sales revenue
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  • may be recorded before cash is collected
  • will always equal cash collections in a month
  • only results from credit sales
  • is only recorded after cash is collected

Questão 20

Questão
A Sales R&A account is not debited if
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  • a customer returns defective merchandise
  • a customer receives a credit for merchandise of inferior quality
  • a customer returns goods that are not in accordance with specifications
  • a buyer returns defective merchandise

Questão 21

Questão
If 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
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  • discount
  • return
  • mistake
  • allowance

Questão 22

Questão
When goods are returned that relate to a prior cash sale
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  • the Sales R&A account should not be used
  • the Cash account will be credited
  • Sales R&A will be credited
  • A/R will be credited

Questão 23

Questão
The Sales R&A account does not provide info to management about
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  • possible inferior merchandise
  • the percentage of credits vs cash sales
  • inefficiencies in filling orders
  • customers may be dissatisfied with the products

Questão 24

Questão
Which of the following accounts has a normal credit balance?
Responda
  • Sales R&A
  • Freight Out
  • Sales
  • Cost of Goods Sold

Questão 25

Questão
Tokyo 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?
Responda
  • Cash 1 200, Sales 1 200
  • Sales R&A 250, Cost of Goods Sold 250
  • Cash 800 and Merchandise Inventory 400, A/R 1 200
  • Cash 800, A/R 800

Questão 26

Questão
Which of the following is a true statement about inventory systems
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  • periodic inventory systems require more detailed inventory records
  • perpetual inventory systems require more detailed inventory records
  • periodic inventory systems requires cost of goods sold to be determined with each sale
  • perpetual inventory systems are specifically meant for companies that sell low unit value items

Questão 27

Questão
A physical inventory should be taken
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  • after every purchase of merchandise
  • after every sale
  • at or near the balance sheet date
  • only if a manual account system is used

Questão 28

Questão
Northend 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
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  • Cash; Sales
  • Sales R&A; Cash
  • Cash; Merchandise Inventory
  • Cost of Goods Sold; Merchandise Inventory

Questão 29

Questão
In a perpetual inventory system, the Merchandise Inventory account must equal the actual merchandise on hand
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  • at all times
  • only after the physical inventory count has occured
  • only at the beginning of the accounting period
  • only at the end of the accounting period

Questão 30

Questão
Taking a physical inventory count involves all of the following except
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  • counting the units on hand
  • applying unit costs to the total inventory on hand for each item of inventory
  • evaluating whether inventory needs to be written off as obsolete
  • totaling the cost of each item of inventory determine the total cost of goods on hand

Questão 31

Questão
If a purchaser using a perpetual system agrees to freight terms of FOB destination, then the
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  • Merchandise Inventory account will be increased
  • Merchandise Inventory account will be decreased
  • Merchandise account will not be affected
  • Cost of Goods Sold account will be increased

Questão 32

Questão
Freight costs paid by a seller on merchandise sold to customers will cause an increase
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  • in the selling expense of the buyer
  • in operating expenses for the seller
  • to the cost of goods sold for the seller
  • to the Merchandise Inventory account for the seller

Questão 33

Questão
Using a perpetual inventory system, the respective normal account balances balances of Merchandise Inventory, Sales R&A, Cost of Goods Sold are
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  • credit, credit, credit
  • debit, debit, debit
  • debit, credit, credit
  • debit, debit, credit

Questão 34

Questão
Income from operations will result if
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  • the cost of goods sold exceeds operating expenses
  • revenues exceed cost of goods sold
  • revenues exceed operating expenses
  • gross profit exceeds operating expense

Questão 35

Questão
If a company has net sales of 500 000 and cost of goods sold of 350 000, the gross profit percentage is
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  • 70%
  • 30%
  • 15%
  • 100%

Questão 36

Questão
Gross profit does not appear
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  • on a multiple-step income statement
  • on a single-step income statement
  • to be relevant in analyzing the operating of a merchandising company
  • on the income statement if the periodic system is used because it cannot be calculated

Questão 37

Questão
Kerr 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
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  • 5.41 times
  • 11.76 times
  • 10.81 times
  • 0.10 times

Questão 38

Questão
Inventory Turnover measures the number of times inventory is
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  • purchased
  • sold
  • returned
  • paid for

Questão 39

Questão
In preparing closing entries for a merchandising companies, the owner's capital account will be debited for the balance of the
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  • Sales Revenue
  • Cost of Goods Sold
  • Ending Inventory
  • Cash

Questão 40

Questão
The Merchandise Inventory account account balance appearing in an unadjusted trial balance under a perpetual inventory system represents the
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  • ending inventory
  • beginning inventory
  • cost of merchandise purchased
  • cost of merchandise sold

Questão 41

Questão
On a classified balance sheet, merchandise inventory is classified as a
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  • current liability
  • capital asset
  • current asset
  • long-term investment

Questão 42

Questão
The cost of goods sold account
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  • is a temporary account
  • is a permenant account
  • appears on the balance sheet as an asset
  • appears on the income statement as an operating expense

Questão 43

Questão
When using a perpetual inventory system, the adjusting entry required when merchandise inventory records do not agree with the physical account
Responda
  • has an effect on cost of goods sold
  • has no effect on cost of goods sold
  • requires reporting a loss when actual is higher than records
  • requires reporting a gain when actual is lower than records

Questão 44

Questão
When recording a credit sale, all of the following accounts are affected except
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  • sales
  • a/r
  • merchandise inventory
  • cash

Questão 45

Questão
Toby Co purchased 10 000 in merchandise and sold it six months later 18 000, At the time of the sale, Toby will
Responda
  • debit the cost of goods sold account for 18 000
  • debit the cost of goods sold account for 10 000
  • credit the cost of goods sold account for 18 000
  • credit the cost of goods sold account for 10 000

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