Accounting Multiple Choice Questions

Quiz
Note: It is recommended that you save your response as you complete each question.

Question 1 (2 points)
Use the following information to calculate the COGS for Beth's Jewels.

Beginning merchandise inventory $41,000
Ending merchandise inventory 34,000
Purchases 52,000
Purchases discounts 1,300
Freight-in 900

Key your response using a dollar sign and appropriate commas but no decimal places.

Question 1 options:

Question 2 (2 points)

Determine the cost of goods sold for L. I. Grill from the information given below: Key your response with a dollar sign and appropriate commas but no decimal places.
Merchandise Inventory, January 1, 20--

$57,700
Merchandise Inventory, December 31, 20--

48,300

Purchases98,000

Purchases Returns and Allowances6,100

Purchases Discounts8,175

Freight-In1,100

Question 2 options:

Question 3 (2 points)

When a fiscal year that starts and ends at the time the stock of merchandise is normally at its lowest level is selected, it is known as a(n)

Question 3 options:

A)natural business year.

B)calendar year.

C)base year.

D)accounting cycle.

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Question 4 (2 points)

The following data applies to a particular item of merchandise:

On hand at start of period

300
$5.10

1st purchase

500

5.20

2nd purchase

700

5.30

3rd purchase

600

5.50

Number of units available for sale

2,100

On hand at end of period

500

Number of units sold during period

1,600

Of the 1,600 units sold during the period, 300 were from the beginning inventory; 500 from the first purchase; 600 from the second purchase; and 200 from the last purchase. Using the specific identification costing method, the value of inventory on hand at the end of the period would be

Question 4 options:

A)

$8,390.

B)

$8,410.

C)

$2,570.

D)

$2,730.

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Question 5 (2 points)

The following data applies to a particular item of merchandise:

On hand at start of period

300

$5.10

1st purchase

500

5.20

2nd purchase

700

5.30

3rd purchase

600

5.50

Number of units available for sale

2,100

On hand at end of period

500

Number of units sold during period

1,600

Of the 1,600 units sold during the period, 300 were from the beginning inventory; 500 from the first purchase; 600 from the second purchase; and 200 from the last purchase. Using the weighted-average costing method, the value of the inventory on hand at the end of the period would be

Question 5 options:

A)

$2,730.

B)

$2,650.

C)

$2,530.

D)

$2,750.

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Question 6 (2 points)

The following data applies to a particular item of merchandise:

On hand at start of period

300

$5.10

1st purchase

500

5.20

2nd purchase

700

5.30

3rd purchase

600

5.50

Number of units available for sale

2,100

On hand at end of period

500

Number of units sold during period

1,600

Of the 1,600 units sold during the period, 300 were from the beginning inventory; 500 from the first purchase; 600 from the second purchase; and 200 from the last purchase. Using the specific identification costing method, the amount of the cost of goods sold would be

Question 6 options:

A)

$2,730.

B)

$13,870.

C)

$11,140.

D)

$8,410.

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Question 7 (2 points)

An error in the reported inventory will cause errors in all of the following EXCEPT

Question 7 options:

A)

the cash account.

B)

the statement of owner's equity.

C)

the following year's financial statements.

D)

the balance sheet.

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Question 8 (2 points)

The following data applies to a particular item of merchandise:

On hand at start of period

300

$5.10

1st purchase

500

5.20

2nd purchase

700

5.30

3rd purchase

600

5.50

Number of units available for sale

2,100

On hand at end of period

500

Number of units sold during period

1,600

Of the 1,600 units sold during the period, 300 were from the beginning inventory; 500 from the first purchase; 600 from the second purchase; and 200 from the last purchase. Using the last-in, first-out costing method, the value of the inventory on hand at the end of the period would be

Question 8 options:

A)

$8,570.

B)

$2,570.

C)

$2,730.

D)

$2,750.

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Question 9 (2 points)

When merchandise is sold and the perpetual system of inventory is used, the journal entry for a sale would include

Question 9 options:

A)

debiting Cost of Goods Sold and crediting Sales.

B)

debiting Accounts Receivable and crediting Cost of Goods Sold.

C)

debiting Accounts Receivable and crediting Sales.

D)

debiting Accounts Receivable and crediting Merchandise Inventory.

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Question 10 (2 points)

Refer to the following data:

Net sales, first month

$13,000

Normal gross profit as a percentage of sales

45%

Inventory, start of period

$8,000

Net purchases, first month

$7,000

Using the gross profit method of inventory estimation, the amount of normal gross profit would be

Question 10 options:

A)

$6,750.

B)

$5,850.

C)

$15,000.

D)

$3,600.

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Question 11 (2 points)

The merchandise costing method that matches the most current cost of items purchased against the current sales revenue is called the

Question 11 options:

A)

specific identification method.

B)

weighted-average method.

C)

last-in, first-out method.

D)

first-in, first-out method.

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Question 12 (2 points)

The following data applies to a particular item of merchandise:

On hand at start of period

300

$5.10

1st purchase

500

5.20

2nd purchase

700

5.30

3rd purchase

600

5.50

Number of units available for sale

2,100

On hand at end of period

500

Number of units sold during period

1,600

Of the 1,600 units sold during the period, 300 were from the beginning inventory; 500 from the first purchase; 600 from the second purchase; and 200 from the last purchase. Using the first-in, first-out costing method, the value of the inventory on hand at the end of the period would be

Question 12 options:

A)

$2,730.

B)

$2,750.

C)

$2,570.

D)

$8,390.

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Question 13 (2 points)

Question 13 options:

A fire completely destroyed the entire inventory of Printing Delight Co. on March 15, 20--. Fortunately, the books were not destroyed in the fire. The following information is taken from the books of Printing Delight Co. for the time period, January 1, 20-- through March 15, 20--:

Beginning inventory, January 1, 20--

$ 45,000

Net purchases, January 1, through March 15, 20--

252,000

Net sales, January 1, through March 15, 20--

378,000

Normal gross profit percentage of sales

37%

Fill in the following blanks, using dollar signs and appropriate commas but no decimal places.

The estimated cost of goods sold for the time period January 1 through March 15, 20--, using the gross profit method is

. The estimated amount of merchandise inventory destroyed in the fire on March 15, 20--, using the gross profit method, is

.
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Question 14 (2 points)

Question 14 options:

The following information is taken from the books of All in the Family Center for the first quarter of its fiscal year ending on April 30, 20--:

Cost

Retail

Inventory, start of period (January 1, 20--)

$ 37,000

$ 66,000

Net purchases during the period

174,000

330,000

Net sales for the period

310,500

Fill in the following blanks, using dollar signs and appropriate commas but no decimal places.

The estimated ending inventory as of April 30, 20--, using the retail inventory method, is

. The estimated cost of goods sold for the time period, January 1, through April 30, using the retail inventory method, is

.
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Question 15 (6 points)

Question 15 options:

The April 1 inventory of Inotech Inc. had a cost of $37,000 and had a retail value of $79,000. During April, merchandise was purchased for $125,000 and marked to sell for $262,500. April sales totaled $201,000.

Calculate the following items using the retail method of inventory estimation. Fill in the blanks using dollar signs and commas but no decimal places.

(1) The retail value of the ending inventory is

. (2) The cost of goods sold in April is

. (3) The cost of ending inventory is

.
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Question 16 (12 points)

Question 16 options:

Smart Tech's beginning inventory and purchases for the month of August were as follows:

# of
Units

Cost per
Unit

Amount

Beginning inventory

600

$7.00

$ 4,200

First purchase

400

$7.50

3,000

Second purchase

500

$8.00

4,000

Third purchase

300

$8.75

2,625

Number of units available for sale

1,800

$13,825

On hand

400

Number of units sold

1,400

Calculate the total amount to be assigned to cost of goods sold and ending inventory for August 31, using each of the following methods.
Fill in the blanks using dollar signs and appropriate commas but no decimal places.

(1) COGS under FIFO is

. Ending inventory under FIFO is

.

(2) COGS under LIFO is

. Ending inventory under LIFO is

.

(3) COGS under weighted average is

. Ending inventory under weighted average is

.
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Question 17 (6 points)

Question 17 options:

Over the past several years, Landmark Supplies has averaged a gross profit of 34%. At the end of 20--, the income statement of the company included the information shown below:

Sales

$1,100,000

Cost of goods sold:

Merchandise inventory, January 1, 20--

$ 67,000

Purchases

840,000

Goods available for sale

$907,000

Less merchandise inventory, December 31, 20--

130,000

Cost of goods sold

777,000

Gross profit on sales

$ 323,000

Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31, 20--. Instead, they had merely estimated the inventory. Under the gross profit method of inventory estimation, determine the following items to check the accuracy of the employees' estimates. Fill in the blanks using dollar signs and appropriate commas but no decimal places.

(1) Gross profit on sales is

. (2) Cost of goods sold is

. (3) Ending inventory is

.
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Question 18 (2 points)

The income summary account, after adjusting entries are posted, reflects the

Question 18 options:

A)

beginning inventory amount.

B)

cash income from business transactions.

C)

beginning and ending inventory amounts.

D)

ending inventory amount.

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Question 19 (2 points)

Which of the following accounts is never debited or credited during the accounting period?

Question 19 options:

A)

Interest Income

B)

Merchandise Inventory

C)

Purchases Returns and Allowances

D)

Owner's Capital

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Question 20 (2 points)

A beginning inventory of $75,000 is removed from the merchandise inventory account by

Question 20 options:

A)

debiting $75,000 to Purchases.

B)

crediting $75,000 to Merchandise Inventory.

C)

crediting $75,000 to Income Summary.

D)

debiting $75,000 to Merchandise Inventory.

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Question 21 (2 points)

During the accounting period, the Unearned Revenue account had a balance of $50,000 for computer equipment and software yet to be delivered. On March 31, a delivery of all of the equipment was made, leaving $5,000 worth of software pending. The correct journal entry to record this activity on March 31 is to

Question 21 options:

A)

debit Unearned Revenue and credit Revenue for $45,000.

B)

debit Cash and credit Unearned Revenue for $45,000.

C)

debit Unearned Revenue and credit Revenue for $5,000.

D)

debit Computer Equipment and credit Cash for $45,000.

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Question 22 (2 points)

At the end of the accounting period, the correct entry in the general journal to adjust for ending inventory is to

Question 22 options:

A)

debit Merchandise Inventory and credit Unearned Revenue.

B)

debit Income Summary and credit Merchandise Inventory.

C)

debit Other Revenue and credit Income Summary.

D)

debit Merchandise Inventory and credit Income Summary.

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Question 23 (2 points)

In preparing a work sheet, the amounts for the Trial Balance columns are copied from the

Question 23 options:

A)

current chart of accounts.

B)

sales and purchases journal.

C)

general ledger.

D)

general journal.

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Question 24 (2 points)

On a work sheet, the Debit columns of the Income Statement and the Balance Sheet both total more than the Credit columns. This represents

Question 24 options:

A)

a net income.

B)

an error in the accounting procedures for the period.

C)

no gain or loss.

D)

a net loss.

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Question 25 (2 points)

If a difference is found between the physical count and the amount in the perpetual inventory records, an adjusting entry is made to which of the following accounts?

Question 25 options:

A)

Accounts Payable

B)

Purchases

C)

Inventory Short and Over

D)

Accounts Receivable

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Question 26 (2 points)

Which of the following is NOT a formal part of the accounting system?

Question 26 options:

A)

income statement

B)

statement of owner's equity

C)

balance sheet

D)

the work sheet

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Question 27 (2 points)

A typical account found under the heading of "Revenue" in a chart of accounts is

Question 27 options:

A)

Freight-In.

B)

Purchases.

C)

Sales.

D)

Cash.

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Question 28 (2 points)

A trial balance of the general ledger accounts taken after the temporary owner's equity accounts have been closed is usually referred to as a

Question 28 options:

A)

pre-closing trial balance.

B)

subsidiary trial balance.

C)

new accounting period trial balance.

D)

post-closing trial balance.

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Question 29 (2 points)

In a multiple-step income statement, operating expenses are subtracted from gross profit to compute

Question 29 options:

A)

net income.

B)

net loss.

C)

other income.

D)

income from operations.

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Question 30 (2 points)

The following information was taken from the financial statements of Sunshine City:

Total current assets

$ 53,000

Property, plant, and equipment

6,000

Current liabilities

21,000

Long-term liabilities

4,000

Owner's equity

34,000

Beginning inventory

31,000

Ending inventory

33,000

Cost of goods sold

152,000

Net income

42,000

The inventory turnover (rounded to one decimal place) for Sunshine City is

Question 30 options:

A)

2.2 times.

B)

3.0 times.

C)

4.8 times.

D)

5.0 times.

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Question 31 (2 points)

Cash and all other assets that may be reasonably expected to be converted to cash or consumed within one year or the normal operating cycle of the business are classified as

Question 31 options:

A)

temporary investments.

B)

marketable securities.

C)

current assets.

D)

investments.

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Question 32 (2 points)

Accumulated depreciation amounts are shown as deductions from the

Question 32 options:

A)

accounts payable account.

B)

cost of building and equipment accounts.

C)

prepaid insurance account.

D)

accounts receivable account.

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Question 33 (2 points)

Net sales minus cost of goods sold equals

Question 33 options:

A)

operating income.

B)

operating expenses.

C)

other expenses.

D)

gross profit.

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Question 34 (2 points)

Reversing entries are made in the

Question 34 options:

A)

cash receipts journal.

B)

sales journal.

C)

purchases journal.

D)

general journal.

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Question 35 (2 points)

Those obligations that are due within one year or the normal operating cycle of the business and will be paid with money provided by the current assets are called

Question 35 options:

A)

long-term liabilities.

B)

current liabilities.

C)

investments.

D)

marketable securities.

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Question 36 (2 points)

The information needed in journalizing the closing entries is obtained from the

Question 36 options:

A)

general journal.

B)

income statement.

C)

work sheet.

D)

accounts receivable ledger.

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Question 37 (2 points)

Information needed in journalizing the first three closing entries is obtained from which of the following work sheet columns?

Question 37 options:

A)

Adjustments

B)

Income Statement

C)

Trial Balance

D)

Adjusted Trial Balance

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Question 38 (8 points)

Question 38 options:

The Income Statement and Balance Sheet columns below are from the work sheet of Bleeker Street Bounty for the year ended December 31, 20--.
Using the work sheet below, compute (a) total current assets, (b) working capital, (c) current ratio, and (d) accounts receivable turnover. (Accounts receivable balance on January 1, 20-- was $23,200). Round to 2 decimal places. All sales are on account.

Bleeker Street Bounty
Work Sheet (partial)
For the year ended December 31, 20--

Income Statement

Balance Sheet

Account Title

Debit

Credit

Debit

Credit

Cash

12,300

Accounts Receivable

25,000

Merchandise Inventory

16,000

Store Supplies

1,100

Office Supplies

600

Prepaid Insurance

1,500

Store Equipment

66,000

Accumulated Depreciation—Store Equipment

38,000

Office Equipment

18,000

Accumulated Depreciation—Office Equipment

10,000

Accounts Payable

22,300

Salaries Payable

400

Long-Term Notes Payable

36,000

Carlo Perez, Capital

50,600

Carlo Perez, Drawing

32,000

Income Summary

17,000

16,000

Sales

61,500

Sales Returns and Allowances

500

Purchases

23,000

Purchases Returns and Allowances

700

Purchases Discounts

400

Sales Salary Expense (selling)

9,200

Office Salary Expense (general)

10,500

Store Supplies Expense (selling)

300

Office Supplies Expense (general)

400

Insurance Expense (general)

800

Depreciation Expense—Store Equipment (selling)

800

Depreciation Expense—Office Equipment (general)

900

63,400

78,600

172,500

157,300

Net Income

15,200

15,200

78,600

78,600

172,500

172,500

Fill in the blanks below using dollar signs and appropriate commas but no decimal places for any dollar amounts.
(a) Total current assets =
(b) Total working capital =
(c) The current ratio (round to two decimal places) = to 1.
(d) Accounts receivable turnover =

times. (Accounts receivable balance on January 1, 20-- was $23,200). Round to 2 decimal places. All sales are on account.)
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