ACC 557 Week 5 Ch 5 & 6 Quiz Q

Week 5 Quiz, Ch 5 & 6

Multiple Choice Question 178

In a perpetual inventory system, a return of defective merchandise by a purchaser is recorded by crediting

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Purchases.

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Purchase Allowance.

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Purchase Returns.

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Inventory.

Multiple Choice Question 127

Gross profit does not appear

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to be relevant in analyzing the operation of a merchandiser.

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on a multiple-step income statement.

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on a single-step income statement.

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on the income statement if the periodic inventory system is used because it cannot be calculated.

IFRS Multiple Choice Question 250

Under GAAP, companies generally classify income statement items by

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nature or function.

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date incurred.

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function.

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Multiple Choice Question 154

During August, 2013, Baxter's Supply Store generated revenues of $30,000. The company's expenses were as follows: cost of goods sold of $18,000 and operating expenses of $2,000. The company also had rent revenue of $500 and a gain on the sale of a delivery truck of $1,000.

Baxter's operating income for the month of August, 2013 is

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$10,500.

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$11,500.

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$12,000.

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$10,000.

Multiple Choice Question 177

Kate Company purchased inventory from Phoebe Company. The shipping costs were $500 and the terms of the shipment were FOB shipping point. Kate would have the following entry regarding the shipping charges:

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Inventory		500
	Cash		500

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Freight-out		500
	Cash		500

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There is no entry on Kate's books for this transaction.

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Freight Expense		500
	Cash		500

IFRS Multiple Choice Question 254

For the income statement, IFRS requires

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single-step approach or multiple-step approach.

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no specific income statement approach.

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multiple-step approach.

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single-step approach.

Multiple Choice Question 99

A credit sale of $2,700 is made on July 15, terms 2/10, n/30, on which a return of $150 is granted on July 18. What amount is received as payment in full on July 24?

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$2,499

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$2,700

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$2,646

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$2,550

Multiple Choice Question 105

Romanoff Industries had the following inventory transactions occur during 2013:

		Units	Cost/unit
2/1/13	Purchase	18	$45
3/14/13	Purchase	31	$47
5/1/13	Purchase	22	$49

The company sold 50 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s after-tax income using FIFO? (rounded to whole dollars)

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$829

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$1,184

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$774

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$1,106

Multiple Choice Question 97

Netta Shutters has the following inventory information.

Nov. 1	Inventory	15 units @ $8.00
8	Purchase	60 units @ $8.30
17	Purchase	30 units @ $8.40
25	Purchase	45 units @ $8.80

A physical count of merchandise inventory on November 30 reveals that there are 45 units on hand. Assume a periodic inventory system is used. Ending inventory under FIFO is

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$369.

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$396.

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$870.

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$897.

Multiple Choice Question 76

Which of the following statements is correct with respect to inventories?

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The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold.

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It is generally good business management to sell the most recently acquired goods first.

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Under FIFO, the ending inventory is based on the latest units purchased.

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FIFO seldom coincides with the actual physical flow of inventory.

Multiple Choice Question 133

On July 31, Tractor Supplies sold merchandise to J. Robson on account. The sales price was $8,400, and the cost of goods sold was $6,300. The sales revenue was recorded immediately, but the entry recording the cost of goods sold was dated August 2. As a result, net income for July was

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not affected, but the net income for August is understated.

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overstated by $8,400.

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overstated by $6,300.

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overstated by $2,100.

IFRS Multiple Choice Question 229

The major IFRS requirements related to accounting for and reporting inventories are

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the same as GAAP with a couple of exceptions.

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completely different fom GAAP.

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not comparable to GAAP.

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the same as GAAP.

Multiple Choice Question 81

Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2013 are as follows:

	Units	Per unit price	Total
Balance, 1/1/13	200	$5.00	$1,000
Purchase, 1/15/13	100	5.30	530
Purchase, 1/28/13	100	5.50	550

An end of the month (1/31/13) inventory showed that 140 units were on hand. How many units did the company sell during January, 2013?

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140

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260

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200

Multiple Choice Question 158

Over the last few years, Mohawk Industries has operated with a gross profit rate of 35%. On January 1, 2012, the company had inventory on hand with a cost of $750,000. Purchases of merchandise during January amounted to $215,000, and sales for the month were $480,000. Using the gross profit method, what is the estimated inventory at January 31

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$653,000.

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$480,000.

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$169,750.

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$627,250.

Multiple Choice Question 84

Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2013 are as follows:

	Units	Per unit price	Total
Balance, 1/1/13	200	$5.00	$1,000
Purchase, 1/15/13	100	5.30	530
Purchase, 1/28/13	100	5.50	550

An end of the month (1/31/13) inventory showed that 140 units were on hand. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month?

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$1,838

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$1,900

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$1,220

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$1,282

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