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Accounting_25 MCQs

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Question;Question 1;A sales invoice included the following;information: merchandise price, $5,000, freight, $900, terms 1/10, n/eom, FOB;shipping point. Assuming that a credit for merchandise returned of $700 is;granted prior to payment and that the invoice is paid within the discount;period, what is the amount of cash that should be received by the seller?;Answer;$5,157;$4,300;$4,257;$4,950;Question 2;Anthony Company sold Madison Company merchandise;on account FOB shipping point, 2/10, net 30, for $20,000. Anthony prepaid the;$300 shipping charge. Which of the following entries does Anthony make to;record this sale?;Answer;Accounts Receivable-Madison, debit $20,000;Sales, credit $20,000;Accounts Receivable-Madison, debit $20,000;Sales, credit $20,000, and;Accounts Receivable-Madison, debit $300, Cash;credit $300;Accounts Receivable-Madison, debit $20,500;Sales, credit $20,500;Accounts Receivable-Madison, debit $20,000;Sales, credit $20,000, and;Freight Out, debit $300, Cash, credit $300;Question 3;Cumberland Co. sells $1,200 of inventory to;Hancock Co. for cash. Cumberland paid $850 for the merchandise. Under a;perpetual inventory system, which of the following journal entry(ies) would be;recorded?;Answer;Cash $1,200 Dr, Merchandise Inventory $850 Cr;Cash $1,200 Dr, Sales $1,200 Cr, Cost of;Merchandise Sold $850 Dr, Merchandise Inventory $850 Cr.;Cash $1,200 Dr, Sales $1,200 Cr;Accounts Receivable $1,200 Dr, Sales $1,200 Cr;Cost of Merchandise Sold $850 Dr, Merchandise Inventory $850 Cr.;Question 4;Discounts taken by a buyer because of early;payment are recorded on the seller?s accounting records as;Answer;Purchases discount;Sales discount;Trade discount;Early payment discount;Question 5;Dorman Co. sold merchandise to Smith Co. on;account, $18,000, terms 2/15, net 45. The cost of the merchandise sold is;$15,500. Dorman Co. issued a credit memo for $1,750 for merchandise returned;that originally cost $1,400. The Smith Co. paid the invoice within the discount;period. What is amount of net sales from the above transactions?;Answer;$16,250;$14,100;$15,925;$13,818;Question 6;Expenses that are incurred directly or entirely;in connection with the sale of merchandise are classified as;Answer;selling expenses;general expenses;other expenses;administrative expenses;Question 7;Generally, the revenue account for a;merchandising business is entitled;Answer;Sales;Net Sales;Gross Sales;Gross Profit;Question 8;Gross profit is equal to;Answer;sales plus (sales discounts and sales returns;and allowances) plus cost of merchandise sold;sales plus sales returns and allowances less;sales discounts less cost of merchandise sold;sales plus sales discounts less sales returns;and allowances less cost of merchandise sold;sales less (sales discounts and sales returns;and allowances) less cost of merchandise sold;Question 9;If the buyer is to pay the freight costs of;delivering merchandise, delivery terms are stated as;Answer;FOB shipping point;FOB destination;FOB n/30;FOB buyer;Question 10;If the seller is to pay the freight costs of;delivering merchandise, the delivery terms are stated as;Answer;FOB shipping point;FOB destination;FOB n/30;FOB seller;Question 11;If title to merchandise purchases passes to the;buyer when the goods are delivered to the buyer, the terms are;Answer;consigned;n/30;FOB shipping point;FOB destination;Question 12;If title to merchandise purchases passes to the;buyer when the goods are shipped from the seller, the terms are;Answer;n/30;FOB shipping point;FOB destination;consigned;Question 13;In credit terms of 3/15, n/45, the "3";represents the;Answer;number of days in the discount period;full amount of the invoice;number of days when the entire amount is due;percent of the cash discount;Question 14;Inventory shortage is recorded when;Answer;merchandise is returned by a buyer.;merchandise purchased from a seller is;incomplete or short.;merchandise is returned to a seller.;there is a difference between a physical count;of inventory and inventory records.;Question 15;Merchandise inventory is classified on the;balance sheet as a;Answer;Current Liability;Current Asset;Long-Term Asset;Long-Term Liability;Question 16;Merchandise with an invoice price of $5,000 is;purchased on September 2 subject to terms of 2/10, n/30, FOB destination.;Freight costs paid by the seller totaled $200. What is the cost of the;merchandise if paid on September 12, assuming the discount is taken?;Answer;$5,200;$5,096;$4,704;$4,900;Question 17;Multiple-step income statements show;Answer;gross profit but not income from operations;neither gross profit nor income from operations;both gross profit and income from operations;income from operations but not gross profit;Question 18;Office salaries, depreciation of office;equipment, and office supplies are examples of what type of expense?;Answer;selling expense;miscellaneous expense;administrative expense;other expense;Question 19;Sales to customers who use bank credit cards;such as MasterCard and Visa are usually recorded by a;Answer;debit to Bank Credit Card Sales, debit to Credit;Card Expense, and a credit to Sales;debit to Cash and a credit to Sales;debit to Cash, credit to Credit Card Expense;and a credit to Sales;debit to Sales, debit to Credit Card Expense;and a credit to Cash;Question 20;The arrangements between buyer and seller as to;when payments for merchandise are to be made are called;Answer;credit terms;net cash;cash on demand;gross cash;Question 21;The inventory system employing accounting;records that continuously disclose the amount of inventory is called;Answer;retail;periodic;physical;perpetual;Question 22;The proper journal entry to record the receipt;of inventory purchased on account in a perpetual inventory system would be;Answer;Jan 1 Inventory 540.00;Accounts Payable 540.00;Jan 1 Office Supplies 540.00;Accounts Payable 540.00;Jan 1 Purchases 540.00;Accounts Payable 540.00;Jan 1 Purchases 540.00;Accounts Receivable 540.00;Question 23;When the perpetual inventory system is used, the;inventory sold is debited to;Answer;supplies expense;cost of merchandise sold;merchandise inventory;sales;Question 24;Under a perpetual inventory system;Answer;accounting records continuously disclose the;amount of inventory;increases in inventory resulting from purchases;are debited to Purchases;there is no need for a year-end physical count;the purchase returns and allowances account is;credited when goods are returned to vendors;Question 25;A chart of accounts for a merchandising business;Answer;usually is the same as the chart of accounts for;a service business;usually requires more accounts than does the;chart of accounts for a service business;usually is standardized by the FASB for all;merchandising businesses;always uses a three-digit numbering system

 

Paper#37266 | Written in 18-Jul-2015

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