14. The entry to record the return of goods from a customer would include aa. debit to Sales.b. credit to Sales.debit to Sales Returns and Allowances.C.d. credit to Sales Returns and Allowances.15. A physical count of inventory is usually takena. in the middle of the fiscal year.b. at the end of the fiscal year.at the start of the fiscal year.d. at the peak of the busy season.с.16. Which of the following activities is not a component of the operating cycle?a. sale of merchandiseb. ordering of merchandisec. purchase of merchandised. collection of cash from merchandise sales17. Under the perpetual inventory system, the entry to record a purchase return wouldinclude a credit toa. Accounts Payable.b. Cost of Goods Sold.C. Merchandise Inventory.d. Purchases Returns and Allowances.18. Which of the following is not considered an Operating Expense?a. Transportation Outb. Cost of Goods Soldc. Advertising Expensed. Administrative Expenses19. The Purchases Discount account is a contra account toa.Sales.b. Purchases.. Sales Discount.d. Accounts Payable.20. The periodic inventory system is used most commonly by companies that sella. high-priced, low-volume merchandise.b. high-priced, high-volume merchandise.c. low-priced, high-volume merchandise.d. low-priced, low-volume merchandise. Multiple Choice1. Under the perpetual inventory system, in addition to making the entry to record asales return, a company woulda. make no additional entry until the end of the period.b. debit Cost of Goods Sold and credit Purchases.c. debit Cost of Goods Sold and credit Merchandise Inventory.d. debit Merchandise Inventory and credit Cost of Goods Sold.2. When the seller advances the transportation costs and the terms of sale are FOBshipping point, the seller records the payment of the transportation costs bydebitinga. Accounts Receivable.b. Transportation In.c. Accounts Payable.d. Sales.3. Under the perpetual inventory system, which of the following accounts would notbe used?a.Cost of Goods Soldb. Merchandise InventoryC.Salesd. Purchases4. Which of the following is not considered in computing net cost of purchases?a. Purchasesb. Purchases Returns and Allowancesc. Transportation paid on purchased goodsd. Transportation paid on goods shipped to customers5. The account that appears in the chart of accounts for a merchandising entity but notfor a service entity isa. Sales Returns and Allowances.b. Accumulated Depreciation.c.Accounts Receivable.d. Advertising Expense.6. Merchandise Inventory becomes part of Cost of Goods Sold when a companysells the inventory.b. pays for the inventory.c. purchases the inventory.d. receives payment from the customer.a.1. The excess of Net Sales over the Cost of Goods Sold is calleda. Profit.b. Gross Profit.c. Operating Profit.d. Merchandising Profit.& Under the perpetual inventory system, in addition to making the entry to record asale, a company wouldmake no additional entry until the end of the period.b. debit Merchandise Inventory and credit Cost of Goods Sold.debit Cost of Goods Sold and credit Purchases.a.C.d. debit Cost of Goods Sold and credit Merchandise Inventory.9. When a seller of merchandise allowed a customer a reduction from the originalprice for defective goods, the seller will issue to the customer aa. sales invoice.b. official receipt.c. debit memorandum.d. credit memorandum.10. Each of the following companies is a merchandising company except aa. wholesale parts company.b. furniture store.c. candy store.d. car wash.11. Which of the following terms does not mean the same as the others?a. Bottom Lineb. Operating ProfitGross Profitd. Profit from OperationsC.12. Which of the following goods would not be included in Merchandise Inventory for apurchasing company?a. goods ordered and received from the supplierb. goods on hand in the showroomC. goods in transit shipped FOB shipping pointd. goods in transit shipped FOB destination13.A sale on March 21 with terms of n/10 eom is due to be collected bya. April 30.b. April 10.C. April 1.d. March 31.

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1. Under the perpetual inventory system, in addition to making the entry to record a sales return, a company would a. make no additional entry until the end of the period. b. debit Cost of Goods Sold and credit Purchases. c. debit Cost of Goods Sold and credit Merchandise Inventory. d. debit Merchandise Inventory and credit Cost of Goods Sold.

1. Under the perpetual inventory system, in addition to making the entry to record a sales return, a company would a. make no additional entry until the end of the period. b. debit Cost of Goods Sold and credit Purchases. c. debit Cost of Goods Sold and credit Merchandise Inventory. d. debit Merchandise Inventory and credit Cost of Goods Sold.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The amount shown in the adjustments credit column for Merchandise Inventory on the worksheet is: A.Cost of Goods Sold. B.total purchases. C.ending inventory. D.beginning inventory.
Under a periodic inventory system, closing entries will include Oa. debits to Sales, Purchases Returns and Allowances, and Purchases Discounts Ob. adjustments to Merchandise Inventory to match physical inventory Oc. credits to Purchases and Sales Discounts Od. All of these choices are correct.
When merchandise sold is assumed to be in the order in which the purchases were made, the company is using a.weighted average cost b.first-in, last-out c.last-in, first-out d.first-in, first-out The debit balance in Cash Short and Over at the end of an accounting period is reported as a.a liability on the balance sheet b.an expense on the income statement c.an asset on the balance sheet d.income on the income statement One of the main disadvantages of the corporate form is the a.charter b.professional management c.requirement to stock d.double taxation of dividends
Which of the following entries would be made to record the purchase of inventory on account, if a company uses the perpetual inventory system? A. a debit to Purchases and a credit to Accounts Payable B. a debit to Accounts Payable and a credit to Merchandise Inventory C. a debit to Merchandise Inventory and a credit to Accounts Payable D. a debit to Accounts Payable and a credit to Purchases
Using a perpetual system, the entry to record the sale of merchandise on account includes a a. Debit to sales b. Credit to merchandise inventory c. Credit to accounts receivable d. Debit to merchandise inventory.
The price a business pays for goods it purchases to sell is called: A. markup B. purchase price C. cost of merchandise
When purchases of merchandise are made on account with a perpetual inventory system, the transaction is recorded with which entry? Da. debit Merchandise Inventory; credit Cash Discounts Ob. debit Merchandise Inventory; credit Purchases Oc. debit Accounts Payable; credit Merchandise Inventory Od. debit Merchandise Inventory; credit Accounts Payable
Assuming a periodic inventory system is used, the entry to record a purchase of merchandise on credit includes: Multiple Choice a debit to Purchases and a credit to Accounts Receivable. a debit to Purchases and a credit to Accounts Payable. a debit to Accounts Payable and a credit to Purchases. a credit to Purchases and a credit to Accounts Payable.
When the merchandise inventory account provides a running balance of the goods on hand, which inventory system is being used? a.Perpetual inventory system b.Periodic inventory system c.Either the periodic or the perpetual inventory system, since both keep a running balance in the merchandise inventory account d.Neither the periodic nor the perpetual inventory system, since both systems do not keep a running balance in the merchandise inventory account
Assuming that the amount of the physical count of the stock of merchandise is less than the recorded amount, the adjusting entry is a debit to Cost of Goods Sold and a credit to Merchandise Inventory for the amount of the difference. On the other hand, if the physical count of the stock of merchandise is more than the recorded amount, the adjusting entry is to debit Merchandise Inventory and credit Cost of Goods Sold for the amount of the difference. Chloe Company employs the perpetual inventory system. Cost of Goods Sold for the year before any adjustment is $275,450. The computer record shows the amount of ending inventory to be $55,382, while the physical count shows ending inventory to be $51,405. Record the adjustment into T accounts and then journalize the adjusting entry. Cost of Goods Sold Merchandise Inventory + – Bal. fill in the blank 1 Adj. fill in the blank 2 + – Bal. fill…
1.Complete the applicable inventory record card, and calculate cost of goods sold and the cost of ending inventory under each of the following inventory cost flow assumptions: a. FIFO b. LIFO c. Specific identification d. Weighted average. 2. Prepare the journal entries required to record purchases and sales using the FIFO inventory cost flow assumption. Descriptions are not necessary. 3. Refer to the "Compare" page. Calculate the sum of cost of goods sold and ending inventory balances under each of the four inventory cost flow assumptions. Explain the results.…
What is the correct entry to write off the inventory under perpetual method? Dr. Cost of Goods sold Cr. Inventory Account B Dr. Sales Cr. Cost of Goods sold © Dr. Sales Cr. Inventory Account Dr. Inventory Account Cr. Cost of Goods sold