Reference no: EM131767391

Question 1
A company can appropriately record revenue when legal title to goods has passed to the consumer.
True
False

Question 2
Net sales is an approximate measure of the assets flowing into a company from its customers.
True
False

Question 3
A sales invoice for $1,000 was dated October 4 and carried cash discount terms of 2/10, n/30. How much cash will be received if the invoice is paid on October 13?
A.
$ 960
B.
$ 980
C.
$1,000
D.
$1,020

Question 4
Gross sales, less sales discounts and sales returns and allowances, is equal to net sales.
True
False

Question 5
Office supplies being used in business would be carried as merchandise inventory of an automobile dealership.
True
False

Question 6
Sales Discounts is a contra revenue account.
True
False

Question 7
Interest expense and interest revenue should be shown under the:
A.
"Operating Expenses" section.
B.
"Operating Revenues" section.
C.
"Cost of Goods Sold" section.
D.
"Non operating Revenues and Expenses" section.

Question 8
A sales discount of 2/10, n/30 means that a 10 percent discount is granted if the invoice is paid in two days, but the entire balance is due in 30 days.
True
False

Question 9
Cynthia Company had sales of $3,000 for cash and $5,000 on account. How would these sales be recorded in the journal?
A.
Debit Cash for $3,000 and Sales for $5,000 and credit Accounts Receivable for $8,000.
B.
Debit Cash for $3,000 and Net Sales for $5,000 and credit Accounts Receivable for $8,000.
C.
Debit Sales for $8,000 and credit Cash for $3,000 and Accounts Receivable for $5,000.
D.
Debit Cash for $3,000 and Accounts Receivable for $5,000 and credit Sales for $8,000.

Question 11

Only when legal title to goods passes to the customer can the seller appropriately:
A.
record the expense.
B.
record the revenue.
C.
reduce the liability, Accounts Payable.
D.
ship the goods to the customer.

Question 12
Net sales revenue is equal to:
A.
Revenues + Sales Discounts - Sales Returns and Allowances.
B.
Sales - Sales Discounts - Trade discounts - Sales Returns and Allowances.
C.
Sales - Sales Discounts + Sales Returns and Allowances.
D.
Sales - Sales Discounts - Sales Returns and Allowances.

Question 13
If the purchase price of a product sold by Nesbit Co. rose steadily during the year, the cost of the ending inventory would be greater under LIFO than FIFO.
True
False

Question 14
Clancey Corporation had an inventory per books of $39,200 at year-end. It took a physical count of inventory and found $33,600 of goods on hand at cost. What is the amount of inventory loss that should be recorded?
A.
$ 5,600
B.
$33,600
C.
$ 8,400
D.
$39,200

Question 15
A perpetual inventory system provides better control over inventory items than a periodic inventory system.
True
False

Question 16
The inventory turnover ratio is equal to:
A.
Average inventory divided by sales.
B.
Cost of goods sold divided by average inventory.
C.
Average inventory divided by cost of goods sold.
D.
Sales divided by average inventory.

Question 17
The lower-of-cost-or-market (LCM) method for pricing ending inventory can be applied using:
A.
either the unit or the total inventory basis.
B.
either the class or the total inventory basis.
C.
either the unit or the class basis.
D.
either the unit, class, or total inventory basis.

Question 18
Merchandise inventory is a current asset on the balance sheet of a merchandising company.
True
False

Question 19
Inventories should be recorded at cost unless market value is lower.
True
False

Question 20
Under a perpetual inventory system, the Merchandise Inventory account is updated at the time of each sale or purchase.
True
False

Question 21
The specific identification method's advantages include the company's ability to use this method with:
A.
little concern for actual prices paid for purchases.
B.
items of high value with unique characteristics like automobiles.
C.
basically identical units.
D.
no concern that income will be manipulated.

Question 22
Which of the following statements is true? When the general price level is rising, the inventory on the balance sheet at the end of the year would:
A.
be lower under the weighted-average method than under the LIFO method.
B.
be higher under the FIFO method than under the LIFO method.
C.
be lower under the FIFO method of costing than under the LIFO method.
D.
more nearly approximate current replacement cost under LIFO than under FIFO.

Question 23
Under FIFO, costs flow through the company as if the oldest goods were the first goods sold.
True
False

Question 24
Generally, inventory cost would include all costs necessary to get goods ready for sale.
True
False

Question 25
During several years of constantly rising prices, the Stetson Company used the LIFO method of inventory valuation, the Mott Company used the FIFO method of inventory valuation, and the Smith Company used the weighted-average method of inventory valuation. In which company would the balance sheet figure for inventory be closer to the current replacement cost of the merchandise on hand?
A.
Stetson Company
B.
Smith Company and Mott Company would be similar in this regard.
C.
Mott Company
D.
Smith Company

Question 26
In The Profit's Inventory clips video, how much waste does Unique Salon have in waste monthly?
5%
10%
15%
20%

Question 27
In The Profit's Inventory clips video, the new inventory system at Unique Salon writes down products that are used and also scans the products for re-ordering.
True
False

Question 28
In The Profit's Inventory clips video, Worldwide Trailers is missing how much in inventory?
$50,000
$80,000
$100,000
$0

Question 29
In The Profit's Inventory clips video, Marcus' theory on inventory is that "if it doesn't sell, it's gotta go."
True
False

Question 30
In The Profit's Inventory clips video, which company doesn't put product on the shelf because the product disappears and there is no inventory system in place?
Worldwide Trailers
Coffee
Fred's
Unique Salon