Reference no: EM13596827

1) Purchased offi ce supplies on account. This will be recorded with:
A) a debit to a liability and a credit to an asset.
B) a credit to a liability and a debit to an asset.
C) a credit to an asset and a debit to an expense.
D) a debit to an asset and a credit to an expense.

2) The journal entry to record the return of a purchase of inventory under the perpetual system includes a:
A) credit to Merchandise Inventory.
B) credit to Purchases.
C) debit to Purchases Returns and Allowances.
D) debit to Merchandise Inventory.

3) The inventory method that matches old costs with current selling prices is:
A) specifi c invoice.
B) LIFO.
C) FIFO.
D) weighted-average.

4) Deluth Corporation has a normal gross profi t of 40%. The current year's beginning inventory was $2,000, purchases were $5,000, and retail sales were $6,000. The estimated ending inventory under the gross margin method is:
A) $3,600.
B) $3,400.
C) $3,450.
D) $4,500.

5) Supplies bought on account were returned for credit and recorded with a debit to Accounts Payable and a credit to Merchandise Inventory. This error would cause:
A) the period's net income to be understated.
B) the period end cost of goods sold to be understated.
C) the period end cost of goods sold to be overstated.
D) None of these are correct.