Reference no: EM132718211

Questions -

Q1. The records for Uptown Pet Shop showed the following: Sales $225,000 Beginning merchandise inventory $ 30,000 Purchases 135,000 Cost of goods sold 150,000 What was the ending merchandise inventory? A) $120,000 B) $ 75,000 C) $ 45,000 D) $ 15,000 E) None of the above

Q2. Under a perpetual inventory system merchandise is purchased for cash. Which is the correct journal entry to record this purchase? A) Debit to Purchases and a credit to Cash B) Debit to Merchandise Inventory and a credit to Accounts Payable C) Debit to Merchandise Inventory and a credit to Cash D) Debit to Purchases Returns and Allowances and a credit to Cost of Goods Sold E) None of the above

Q3. An item of merchandise with a list price of $200 was purchased with a trade discount of 40% and credit terms of 3/10, n/30. The vendor was paid within the discount period. From the buyer's standpoint, which is the correct journal entry to record the payment? A) Accounts Payable, debit, $200.00; Purchases Discount, credit, $86.00; Cash, credit, $114.00 B) Accounts Payable, debit, $80.00; Merchandise Inventory, credit, $2.40; Cash, credit, $77.60 C) Accounts Payable, debit, $120.00; Merchandise Inventory, credit, $3.60; Cash, credit, $116.40 D) Purchases, debit, $200.00; Purchase Discount, credit, $86.00; Cash, credit, $114.00 E) None of the above

Q4. The buyer received an invoice from the seller for merchandise with a list price of $400 and credit terms of 2/10, n/60. The term 'n/60' in the credit terms is which of the following? A) Credit period B) Trade discount C) Cash discount allowed for early payment of the invoice D) Discount period E) None of the above

Q5. Part of the merchandise purchased for cash at an earlier time is now being returned. Which of the following is the correct journal entry FOR THE BUYER for this return, assuming the seller grants cash refunds and a perpetual inventory system is used? A) A debit to Cash and a credit to Purchases B) A debit to Cash and a credit to Merchandise Inventory C) A debit to Purchases Returns and Allowances and a credit to Cost of Goods Sold D) A debit to Merchandise Inventory and a credit to Cash E) None of the above

Q6. Net sales is Sales less A) Sales returns. B) Sales discounts. C) Sales returns and allowances. D) Sales returns and allowances and sales discounts. E) None of the above

Q7. Gross margin (gross profit) from sales is the difference between which of the following? A) Net sales and the cost of goods sold plus all the expenses B) Net sales and operating expenses C) Gross sales less the sales discounts and sales returns and allowances D) Net sales and the cost of goods sold E) None of the above

Q8. A retailer who uses a perpetual inventory system purchased $8,000 of merchandise on credit. The credit terms were 2/10, n/30, FOB destination. The freight costs were $130. What was the journal entry for the purchaser to record this transaction? A) Merchandise Inventory, debit, $8,000; Freight-In, debit, $130; Accounts Payable, credit, $8,130 B) Merchandise Inventory, debit, $8,130; Accounts Payable, credit, $8,130 C) Merchandise Inventory, debit, $8,000; Accounts Payable, credit, $8,000 D) Merchandise Inventory, debit, $7,870; Freight-In, debit, $130; Accounts Payable, credit, $8,000 E) None of the above

Q9. In a perpetual inventory system, which of the following would be debited when inventory is sold on account (from the SELLER's standpoint)? A) Cost of goods sold. B) Merchandise inventory C) Sales D) Accounts receivable E) CGS and A/R

Q10. FOB Shipping Point means that the A) Good are placed free on board to the buyer's place of business B) Buyer pays the freight C) Seller pays the freight D) The trucking company pays the freight E) None of the above

Q11. In a perpetual inventory system. From the buyer's standpoint, a return of defective merchandise is recorded by crediting A) Purchases B) Purchase Returns C) Purchase Allowance D) Merchandise Inventory E) None of the above

Q12. In a perpetual inventory system, which of the following is not part of the series of journal entries made by the seller when merchandise is sold on credit? A) Credit the Cost of Goods Sold account B) Credit the Sales account C) Credit the Merchandise Inventory account D) Debit the Accounts Receivable account E) None of the above

Q13. Beginning inventory 15 units @ $6 per unit, First purchase 30 units @ $7 per unit First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the value of the ending inventory using a perpetual inventory system with the LIFO costing method? A) $270 B) $285 C) $300 D) $490 E) None of the above

Q14. Beginning inventory 15 units @ $6 per unit, First purchase 30 units @ $7 per unit , First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the value of the ending inventory using a perpetual inventory system with the FIFO costing method? A) $270 B) $275 C) $300 D) $460 E) None of the above

Q15. Beginning inventory 15 units @ $6 per unit, First purchase 30 units @ $7 per unit First sale 25 units Second purchase 35 units @ $8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the total value of the ending inventory using a perpetual inventory system with the weighted average costing method? (Your answer may not be exact to the penny, but it should be within a dollar of those given below). A) $255.41 B) $264.28 C) $268.52 D) $273.54 E) $292.95