Question 1 The steps of the operating cycle for a retailer usually take place in which order?
1.Purchases of merchandise ?Sale of merchandise on account ?Collection of the receivables
2.Sale of merchandise on account ?Purchases of merchandise ?Collection of the receivables
3.Collection of the receivables ?Purchases of merchandise ?Sale of merchandise on Account
4.Purchases of merchandise ?Collection of the receivables ?Sale of merchandise on Account
Question 2 Sales were $600,000, gross profit was $220,000, operating expenses were $120,000, and the income tax rate is 30%. Calculate the cost of goods sold and net income.
1.$380,000 and $30,000, respectively
2.$380,000 and $100,000, respectively
3.$380,000 and $70,000, respectively
4.$100,000 and $70,000, respectively
Question 3 In a perpetual inventory system, as inventory is purchased, it is initially recorded as (1) _____________. When inventory is sold to customers, it is converted to (2) ___________.
1.(1) an asset (2) an expense
2.(1) an expense (2) revenue
3.(1) an expense (2) cost of goods sold
4.(1) an asset (2) revenue
Question 4 Sales were $424,000. Beginning inventory was $45,000. Purchases were $245,000. Ending inventory is $38,000. Operating expenses were $124,000. Calculate the cost of goods sold.
1.$252,000
2.$172,000
3.$290,000
4.$128,000
Question 5 A company using a periodic inventory system can complete its closing procedures in the same manner as if aperpetual inventory system is being used:
1.when there is no inventory shrinkage.
2.when there are no accounts payables outstanding.
3.by creating a Cost of Goods Sold account.
4.when there are no sales returns and allowances.
Question 6 Which of the following is a factor suggesting the use of a periodic inventory system?
1.Items of inventory have a high per-unit cost.
2.Merchandise is stored in multiple locations.
3.A low volume of sales transactions.
4.The inventory includes many different kinds of low-cost items.
Question 7 A company purchased $10,000 of merchandise inventory from a vendor who offers credit terms of 2/10 n/30. The company uses the net cost method of recording purchases of merchandise. The company paid the vendor 30 days after receiving the invoice. The journal entry to record the payment would include which of the following?
1.A debit to Purchase Discounts Lost for $200
2.A debit to Accounts Payable for $10,000
3.A credit to Cash for $10,000
4.Both (A) and (C)
Question 8 You delivered a printing press to your customer. When it was delivered, it was slightly dented on one side, but the dent had no effect on the performance of the printing press. To maintain company goodwill, you authorized a $500 reduction in the invoice price if the customer would keep the printing press. The customer accepted the offer. The journal entry to record the $500 would include which of the following?
1.A debit to Sales Discount for $500
2.A credit to Sales Discount for $500
3.A debit to Sales Returns and Allowances for $500
4.A credit to Sales Returns and Allowances for $500
Question 9 Which of the following is not true about the use of special journals?
1.Transactions are recorded faster and more efficiently.
2.Automation may reduce the risk of errors.
3.Repetitive transactions are handled quickly and efficiently.
4.Different accounting principles are applied.
Question 10 If an accounting manager asks you to delay recording an invoice for the purchase of merchandise until after the closing of the general ledger, but include the merchandise in the physical count of the ending merchandise inventory(periodic inventory method), the manager is attempting to do which of the following?
1.Increase the reported net income in the income statement of the current period
2.Take advantage of the credit terms related to the purchase
3.Follow the matching principle
4.Employ the net cost method of recording purchases