1-A remittance advice attached to a company check provides.
A- details about the running cash balance in the checking account.
B- the magnetic bank routing numbers.
C- the explanation of the purpose of the check.
D- the signature space for the maker.
2- Cost of goods sold is computed from the following equation:
A- beginning inventory - cost of goods purchased + ending inventory.
B- sales - cost of goods purchased + beginning inventory - ending inventory.
C- sales + gross profit - ending inventory + beginning inventory.
D- beginning inventory + cost of goods purchased - ending inventory
3-The control principle related to not having the same person authorize and pay for goods is known as
A- establishment of responsibility.
B- independent internal verification.
C- segregation of duties.
D- rotation of duties.
4- The credit terms offered to a customer by a business firm are 2/10, n/30, which means that
A- the customer must pay the bill within 10 days.
B- the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date.
C- the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date.
D- two sales returns can be made within 10 days of the invoice date and no returns thereafter.
5- When a periodic inventory system is used, cost of goods sold is calculated as follows:
A- Ending inventory plus purchases less beginning inventory.
B- Beginning inventory plus purchases less ending inventory
C- Cost of merchandise purchased less ending inventory.
D- Cost of merchandise sold plus beginning inventory.
6- Blank check
A- should be safeguarded.
B- should be pre-signed.
C- do not need to be safeguarded since they must be signed to be valid.
D- should not be prenumbered.
7- Tier II Company uses a periodic inventory system. Details for the inventory account for the month of January, 2008 are as follows:
Balance 1/1/08
200 @ $5.00
$1,000
Purchase 1/15/08
100 @ $5.30
530
Purchase 1/28/08
100 @ $5.50
550
An end of the month (1/31/08) inventory showed that 120 units were on hand. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month?
A- $1,376
B- $1,424
C- $2,800
D- $3,000