Financial Accounting Homework - 90 minute time limit
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Question 1 1 pts
The faster goods are sold and collection is made, the shorter the financing period.
True
False
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Question 2 1 pts
If it takes 45 days to sell inventory, 30 days to collect for the sale, and creditors' payment terms are 60 days, the financing period is 135 days.
True
False
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Question 3 1 pts
When the terms are FOB destination, the title passes at the point of origin and the buyer pays the transportation costs.
True
False
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Question 4 1 pts
Advertising expense appears as a general and administrative expense on the income statement.
True
False
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Question 5 1 pts
A merchandiser's operating cycle concludes with the sale of goods.
True
False
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Question 6 1 pts
Which type of account is Cost of Goods Sold?
An asset account.
A liability account.
An expense account.
An income account.
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Question 7 1 pts
The other revenues and expenses section of a multistep income statement could include all the following except
interest expense.
interest income.
dividend income.
insurance expense.
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Question 8 1 pts
Under the perpetual inventory system, in addition to making the entry to record a sale, a company would
record an increase in inventory corresponding to the amount of the sale.
record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold.
record an increase in inventory corresponding to the cost of the inventory.
make no additional entry until the end of the period.
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Question 9 1 pts
On June 3, Addison Company purchased merchandise worth $1,600 on credit, terms 2/10, n/30. The amount paid on June 15. What is the required journal entry to record the payment under the periodic inventory system?
Accounts Payable 1,568
Purchases Discounts 32
Cash 1,600
Accounts Payable 1,600
Purchases Discounts 32
Cash 1,568
Cash 1,600
Accounts Payable 1,600
Accounts Payable 1,600
Cash 1,600
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Question 10 1 pts
Under the perpetual inventory system
the cost of each item is recorded in the Merchandise Inventory account when it is purchased.
when an inventory item is sold, its cost is transferred to the Cost of Goods Sold account.
the balance of the Merchandise Inventory account equals the cost of goods on hand.
All of these choices.
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Question 11 1 pts
Which of the following goods would not be included in merchandise inventory for a purchasing company?
Goods in transit shipped FOB shipping point
Goods on hand in the showroom
Goods in transit shipped FOB destination
Goods ordered and received from the supplier
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Question 12 1 pts
In which category would office salaries expense be included?
Net sales.
Cost of goods sold.
Selling expenses.
General and administrative expenses.
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Question 13 1 pts
Liberty Industries purchased merchandise worth $1,800 on credit, terms n/30. What is the required journal entry to record the transaction under the perpetual inventory system?
Accounts Receivable 1,800
Purchases 1,800
Purchases 1,800
Merchandise Inventory 1,800
Merchandise Inventory 1,800
Accounts Payable 1,800
Accounts Payable 1,800
Merchandise Inventory 1,800
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Question 14 1 pts Skip to question text.
Brendan Company sold merchandise worth $1,600 on credit, terms n/15 and on the next day the customer returned merchandise worth $100, which cost $60 for Brendan Company. What is the required journal entry to record the merchandise returns under the perpetual inventory system?
Accounts Receivable 100
Sales Returns and Allowances 100
Cost of Goods Sold 60
Merchandise Inventory 60
Sales Returns and Allowances 100
Accounts Receivable 100
Merchandise Inventory 60
Cost of Goods Sold 60
Accounts Receivable 100
Merchandise Inventory 100
Cost of Goods Sold 60
Sales 60
Merchandise Inventory 100
Sales 100
Sales 60
Cost of Goods Sold 60
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Question 15 1 pts
Copper, Inc. purchased merchandise worth $1,800 on credit, terms n/30 and returned merchandise worth $200 on next day. What is the required journal entry to record the merchandise returns under the periodic inventory system?
Accounts Payable 200
Purchases Returns and Allowances 200
Accounts Payable 200
Merchandise Inventory 200
Merchandise Inventory 200
Purchases Returns and Allowances 200
Purchases Returns and Allowances 200
Merchandise Inventory 200
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Question 16 1 pts Skip to question text.
Use this information to answer the following question.
Account Name
Debit
Credit
Sales
305,000
Sales Returns and Allowances
10,000
Purchases
68,000
Purchases Returns and Allowances
8,000
Freight-In
12,000
Selling Expenses
30,000
General and Administrative Expenses
110,000
In addition, beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
Net sales for the period were
$305,000.
$275,000.
$295,000.
$215,000.
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Question 17 1 pts
Goods totaling $14,000 purchased February 2 on terms of 2/10, n/30 and on which returns of $2,000 were made on February 10 would be subject to which of the following discounts if paid for on February 12?
$240
$280
$320
$40
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Question 18 1 pts
The collection of a $2,000 account beyond the 2 percent discount period would result in a(n)
increase to Cash for $1,960.
decrease to Accounts Receivable for $2,000.
decrease to Cash for $2,000.
increase to Sales Discounts for $40.
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Question 19 1 pts Skip to question text.
Use this information to answer the following question.
Outerbanks, Inc.
Income Statement
For the Year Ended December 31, 20x5
Revenues
Net sales
$100,000
Dividend income
12,750
Total revenues
$112,750
Costs and expenses
Costs of goods sold
$ 30,000
Selling expenses
10,000
General and administrative expenses
13,750
Interest expense
6,250
Total costs and expenses
60,000
Net income
$ 52,750
If the income statement were prepared in a multistep form, excess of other revenues over other expenses would be
$12,750.
$6,500.
$19,000.
$6,250.
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Question 20 1 pts
Assuming that net cost of purchases was $39,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500, how much was cost of goods sold?
$50,500
$52,500
$40,000
$38,000
