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What is the accounting system where you record revenue

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Question

1. Suppose your business caters a party August 23. According to the contract, your client will pay the $2,500 bill on September 1. Using the accrual basis of accounting, how would you record the transaction?

A. On August 23, debit Accounts Receivable $2,500 and credit Revenue $2,500.

B. On September 1, debit Accounts Receivable $2,500 and credit Revenue $2,500.

C. On August 31, credit Accounts Receivable $2,500 and debit Revenue $2,500.

D. On August 23, credit Accounts Receivable $2,500 and debit Revenue $2,500.

2. The Golden Stationery Store purchased $500 in merchandise on account. Using the periodic inventory system, how would you record the entry?

A. Debit Merchandise Inventory $500 and credit Accounts Payable $500.

B. Credit Purchases $500 and debit Accounts Payable $500.

C. Credit Merchandise Inventory $500 and debit Accounts Payable $500.

D. Debit Purchases $500 and credit Accounts Payable $500.

3. What is the accounting system where you record revenue or income when the business earns it, and expenses at the time the business incurs them?

A. Cash C. Accrual

B. GAAP D. COGS

4. What is the time period called from the time the business opens to the last day of the twelfth month?

A. Inventory year C. Fiscal year

B. Business year D. FIFO

Compute the accrued interest (using bankers' interest) on the following merchandise orders.

Then use the interest computations to answer questions 5"9.

Purchase Interest First Month's Total

Date Price Rate Time Interest Interest

6/1 $2,596.40 9% 7 months $__________ _________

7/10 $15,632.16 10% 10 months __________ _________

8/1 $3,532.75 9% 90 days __________ _________

9/8 $7,659.43 11% 6 months __________ _________

5. What is the total interest for the order dated 6/1?

A. $97.37 C. $136.31

B. $136.26 D. $233.68

6. What is the July interest for the order dated 7/10?

A. $86.85 C. $89.93

B. $88.25 D. $91.92

7. What is the first month's interest for the order dated 8/1?

A. $26.13 C. $26.70

B. $26.50 D. $27.608. What is the total interest for the order dated 8/1?

A. $79.46 C. $80.10

B. $79.49 D. $80.12

9. What is the first month's interest for the order dated 9/8?

A. $50.78 C. $51.90

B. $51.49 D. $54.26

Compute the cost of the following inventory using the FIFO and the LIFO methods of inventory. Then use these inventory computations to answer questions 10"14.

2/1/20" 5/6/20" 9/18/20" Quantity on Ending

Purchase Purchase Purchase Hand as of Inventory

Item (Each) (Each) (Each) 12/31/20" Value

FIFO LIFO

Fuse 5,000 @ $1.20 2,500 @ 1.24 1,000 @ $1.33 2,481 $ _______ $ ______

Case 1,500 @ $2.30 1,000 @ 2.32 985 @ $2.35 1,304 _______ ______

Gear 700 @ $4.10 600 @ 4.15 385 @ $4.31 580 _______ ______

Bolt 10,000 @ $.42 5,965 @ .45 7,580 @ $.49 2,390 _______ ______

Total $ _______ ______

10. What is the ending inventory value for the fuses using FIFO?

A. $2,977.20 C. $3,166.44

B. $3,044.33 D. $3,299.73

11. What is the ending inventory value for the cases using LIFO?

A. $2,999.20 C. $3,054.83

B. $3,025.11 D. $3,064.40

12. What is the ending inventory value for the gears using FIFO?

A. $2,378.00 C. $2,468.60

B. $2,416.16 D. $2,499.80

13. What is the ending inventory value for the bolts using FIFO?

A. $1,003.80 C. $1,083.47

B. $1,075.82 D. $1,171.10

14. What is the ending inventory value for the bolts using LIFO?

A. $1,003.80 C. $1,083.47

B. $1,075.82 D. $1,171.10

15. What is the entry for the transaction on 5/3 for J. B. McMurphy, Dept. A Sales Cr.?

A. $132.33 C. $152.72

B. $134.36 D. $154.69

16. What is the entry for National Bank, S. V. Northrup on 5/10?

A. $12,351.95 C. $15,648.82

B. $14,763.04 D. $3,296.87

17. What is the entry for the National Bank, Campbell Company transaction on 5/11?

A. $799.04 C. $846.48

B. $843.79 D. $861.57

18. What is the entry for the T. M. Products, Dept. A Trans. Cr., on 5/11?

A. $97.67 C. $256.01

B. $158.34 D. $304.78

19. What is the entry for Sales Tax Cr., Baker Bros., on 5/13?

A. $6.94 C. $69.40

B. $62.46 D. $76.34

20. What is the entry for the transaction for Belmont Plumbing, Dept. A Sales Cr., on 5/15?

A. $412.91 C. $632.50

B. $612.37 D. $1,025.28

Reference no: EM132344783

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