1. If the seller permits merchandise to be returned or an allowance to be made, it is customary for the seller to issue a/an _ memorandum. a. allowance b. credit c. debit d. return 2. To enter a cash sale, the journal entry includes: 3. debiting Cash, crediting Sales, and crediting Sales Tax Payable. b. debiting Cash, debiting Sales, and crediting Sales Tax Payable. c. debiting Cash, debiting Sales Tax Payable, and crediting Sates. d. debiting Sales, debiting Sales Tax Payable, and crediting Cash. A02B Principles of Accounting I -Page 3-18 3. Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. What should the sales account be credited for? a. $84.60 b. 590.00 c. 595.40 d. 593.60 4. Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. What is the amount that should be debited to Accounts Receivable? a. 55.40 __b. 594.60 c. 593.60 d. 595.40 5. A customer returns merchandise that was delivered in poor condition and that does not meet specifications. The account that the seller would debit for the amount of the return is: 3. Purchases. b. Purchase Returns and AJlowances. c. Sales. d. Sales Returns and Allowances. LulOO 3 6. A credit memorandum for $156 (sales price of merchandise was $150; sales tax was $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly, what should Accounts Receivable be credited for? a. $6 b. $134 c. $150 d. $156 7. The terms specified on an invoice are 4/15, n/30. This means that: Ll. a discount of 4% will be allo,,,,,ed if payment is made within 15 days from the date of the invoice. b. a discount of 15% will be allowed if p'lyment is made within 4 days from the diJte of the invoice. c. a discount of 4% will be allowed if payment is made by the 15th of the month. d. a discount of 15% will be allowed if payment is made by the 4th day after the date of the invoice. 8. A discount offered as an inducement for prompt payment of an invoice is called a/an discount. a. cash b. early c. invoice d. trade A028 Principles of Accounting 1 -Page 3-20 9. After posting is completed in the accounts receivable ledger and the general ledger, the total of the accounts receivable ledger balances per the schedule of accounts receivable should equal the: a. Accounts Payable account balance. b. Accounts Receivable account balance. __c. Cash account balance. __d. net income amount. 10. For the merchant, bank credit card sales are accounted for in a manner similar to: i]. cash sales. b. installment sales. c. layaway sales. d. sales on account. 11. Special discounts on list prices granted by manufacturers to different classes of customers are known as discounts. a. cash b. customers' c. manufacturers' d. trade Lellon 3 12. An invoice in the amount of $916 is subject to a trade discount of 10% and credit terms of 3/10, n/3O. If the invoice is NOT paid within the discount period, what would the amount that would be paid to satisfy the invoice be? __a. $824.40 b. $888.52 c. $916.00 d. $981.27 13. An invoice of $237.50 dated April 2 is subject to credit terms of 2/10, n/30. What is the amount to be paid jf the invoice is paid on or before April? __a. $204.75 b. $213.75 c. $232.75 d. $237.50 14. An invoice of $237.50 dated April 2 is subject to cred it terms of 2/10, n/3O. If the invoice is paid on April 14, what is the amount to be paid? a. $204.75 b. $213.75 c. $232.75 d. $237.50 A02B Principles of Accounting I -Page 3?22 15. The account to which transportation charges on incoming merchandise are generally charged is called: a. Delivery Expense. b. FOB Destination. c. Freight-In. d. Freight-Out. 16. The following indicates that the shipment is free on board at the point of origin of shipment and the buyer must pay all transportation costs: a. COD. b. FOB destination. c. FOB shipping point. d. 4/10, EOM. 17. Merchandise inventory available at the beginning of the period + net purchases -merchandise inventory at the end of the period =: a. cost of goods sold. __b. net purchases. __c. net sales. __d. purchases. LeSIon 3 18. Given the following data, the gross profit for the fiscal year would be _____" Freight-in on merchandise purchased $],500; Merchandise Inventory, January 1 $30,000; Merchandise Inventory, December 31 $50,000; Purchases $100,000; Purchases discounts laken $2,800; Purchases returns and allowances $2,000; Sales $116,500; Sales returns and allowances $1,100. a. $192,100 b. $95,200 __c. $76,700 d. $38,700 19. When the net-price method of recording purchases is used, the debit to Purchases is for the: __a. amount actually paid on the invoice. __b. amount of the invoice less available cash discounts. c. amount of the invoice plus available cash discounts. d. full amount of the invoice. A02B Principles of Accounting I -Page 3-24 20. A purchase was made for $200 on account with credit terms of 2/10, n/30. The purchase was recorded using the net-price method. If payment is made 25 days later, the entry to record the payment will require: a. debiting Accounts Payable for $204, crediting Purchases Discounts Lost (or $4, and crediting Cash for $200. b. debiting Accounts Payable for $200 and crediting Cash for $200. c. debiting Accounts Payable for $196, debiting Purchases Discounts Lost for $4, and crediting Cash for $200. d. debiting Purchases for $196, debiting Purchases Discounts Lost for $4, and crediting Cash for $200.,Microsoft's marketing and technical skills and continuing investment in improving its Windows operating system give it a/an in making computers easier to use. strategic window market requirement market opportunity competitive advantage Dell Computer collects information about competitive, economic. political, legal and regulatory, technological, and sociocultural forces that may affect its marketing activities. This process is called: environmental scanning. survey of environment. marketing. information processing. Which one of the following statements characterizes a marketing information system (MIS)? An MIS is an orderly gathering of information thatis not supplied through routine reporting systems such as sales reports and accounting data. An MIS provides a continuous flow of information about such things as distribution costs, prices, sales, and advertising expenses. An MIS is conducted on a special-project basis when needed. An MIS involves internal information collection about employees and customers. Business buying differs from consumer buying in that business buying consists of purchasing products for production, resale, or day-ta-day operations rather than for consumer use. Which one of the following characteristics is typical of business transactions? Orders placed by business buyers tend to be smaller than those placed by consumers. Business buyers are better informed about the products they purchase. Business purchases usually require only a short negotiating period. Most business purchases are made by one person. Regarding key aspects of product differentiation, product quality: refers to how a product is conceived, planned, and produced. refers to the overall characteristics of a product that allow it to perform as expected in satisfying customer needs. is concerned with creating and maintaining a certain concept of a product in the customer's mind. is not concerned with the degree to which a product is the same over time. Which one of the following statements is FALSE? Service companies recognize that they must set realistic expectations about the service they can provide. Service expectations can be set through advertising and communication. It has been estimated that customers tell four times as many people about bad service as they do about good service. There is little need for a service company to focus effort on maintaining good internal communication. The wheel?of-retailing hypothesis suggests that: the cost of operating a department store will be reduced over time as the store's management learns more about retail operations. retailers tend to provide increasingly limited services to customers as the business ages. new retailers enter the marketplace with low prices, low profit margins, and low status but eventually emerge at the high end of the price/cost/service scale. as retail firms' profits increase. the services they provide to customers increase, but the cost of doing business decreases. Scott Bartello, a salesperson for Xerox, develops a list of potential customers and evaluates them on the basis of their ability. willingness, and authority to purchase copy machines. This process is called: customer search. preapproach. approaching the customer. prospecting. A customer is likely to say, People notice when you buy the most expensive brand of a product.?a price-conscious ,quality-conscious ,prestige-sensitive, value-conscious By 2009, the North American Free Trade Agreement will create a free trade area between the United States, Mexico, and: Japan_ Brazil. Panama. Canada.
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