Q1. If the replacement cost of inventory is less than its historical cost, the company will write down the inventory by
A. making a note in the financial statements only.
B. increasing inventory for replacement cost and decreasing inventory for historical cost.
C. increasing cost of goods sold and decreasing inventory.
D. increasing inventory and decreasing cost of goods sold.
Q2. Lyman Company returned $750 of goods it had purchased from another company. The original invoice was for $4,200, 3/10, n/30. What is the discount if Lyman pays the balance within the discount period?
A. $126.00
B. $22.50
C. $0.00
D. $103.50
Q3. When merchandise is sold under the perpetual system of inventory, the journal entry to record a sale of merchandise on account includes debiting _______ and crediting _______.
A. Accounts Receivable; Sales
B. Cost of Goods Sold; Sales
C. Accounts Receivable; Cost of Goods Sold
D. Accounts Receivable; Inventory
Q4. if net sales decrease and cost of goods sold increases, the gross profit percentage
A. decreases.
B. increases.
C. remains the same.
D. will change based upon the change in total assets.
Olympic Enterprises has the following inventory data:
|
Date
|
|
Quantity
|
Unit Cost
|
|
June 1
|
Beginning inventory
|
5
|
$52
|
|
June 4
|
Purchase
|
10
|
$55
|
|
June 7
|
Sale
|
12
|
|
|
June 11
|
Purchase
|
9
|
$58
|
|
June 14
|
Sale
|
8
|
|
Q5. Assuming FIFO, what is the cost of goods sold for June 14?
A. $440
B. $464
C. $456
D. $455
Q6. If a misstatement of inventory occurs, the net income for _______ periods will be misstated.
A. 2
B. 3
C. 0
D. 1
Q7. Beginning inventory plus net purchases equals
A. cost of goods sold.
B. cost of goods available for sale.
C. ending inventory.
D. gross profit.
Q8. Which of the following accounts is credited in a journal entry for a like-kind asset exchange?
A. Loss on Exchange of Assets
B. Truck (old)
C. Accumulated Depreciation for truck (old)
D. Tires (new)
Q9. If a company has 90-day credit terms, its expected accounts receivable turnover is
A. 2.
B. 4.
C. 1.
D. 12.
Q10. Choose the correct formula to determine a trend percentage.
A. The total income of the current year, minus the total income from a base year.
B. An item from any year divided by the same item from a base year, multiplied by 100.
C. An item from the base year multiplied by the same item from the current year.
D. Net profit of the current year divided by net profit of a base year.
Q11. Which of the following causes the par value of a company's stock to decrease?
A. Stock dividend
B. Stock split
C. Cash dividend
D. Sale of additional stock
Q12. An example of a cash outflow from investing activities is
A. the purchase of treasury stock.
B. paying cash dividends.
C. issuance of a note payable.
D. making a loan to another company.
Q13. A business wanting to incorporate must file articles of incorporation with
A. the federal government.
B. the local government.
C. the state office dealing with incorporation.
D. any state in which they will do business
Q14. Which is not included in paid-in capital?
A. Common Stock
B. Cash
C. Preferred Stock
D. Additional Paid-in Capital
Q15. The formula for computing additional paid-in capital in excess of par is shares of stock times
A. par value per share of stock.
B. selling price per share minus par value per share.
C. selling price per share plus par value per share.
D. selling price per share of stock.
Q16. On the _______ of a cash dividend, no journal entry is required.
A. declaration date
B. preferred date
C. payment date
D. date of record