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5 Written Questions

3 Matching Questions

  1. The following amounts relate to Amato Company for the current year: Beginning Inventory, $20,000; Ending Inventory, $28,000; Purchases, $166,000; Purchase Returns, $4,800; and Freight-Out, $6,000. The amount of Cost of Goods Sold for the period is
    A. $159,200.
    B. $169,200.
    C. $162,800.
    D. $153,200.
  2. Under a perpetual inventory system, when goods are purchased for resale by a company
    A. purchases on account are debited to Inventory.
    B. purchases on account are debited to Purchases.
    C. purchase returns are debited to Purchase Returns and Allowances.
    D. freight costs are debited to Freight-out.
  3. Villa Sales Company had the following amounts related to its business: Beginning inventory, $12,000; Purchases, $42,000; Net sales, $50,000; and Gross profit, $15,000. The amount of the ending inventory is
    A. $54,000.
    B. $77,000.
    C. $19,000.
    D. $35,000.
  1. a C
  2. b A
  3. c D

5 Multiple Choice Questions

  1. B
  2. B
  3. TRUE
  4. D
  5. B

5 True/False Questions

  1. Gross profit will result if
    A. operating expenses are less than net income.
    B. sales revenues are greater than operating expenses.
    C. sales revenues are greater than cost of goods sold.
    D. operating expenses are greater than cost of goods sold.
    B

          

  2. When goods are purchased for resale by a company using a periodic inventory system
    A. purchases on account are debited to Inventory.
    B. purchases on account are debited to Purchases.
    C. purchase returns are debited to Purchase Returns and Allowances.
    D. freight costs are debited to Purchases.
    B

          

  3. Which of the following accounts may be found in the adjustment columns of a worksheet for a merchandiser but not a service company?
    A. Prepaid Insurance
    B. Accumulated Depreciation
    C. Cost of Goods Sold
    D. Salaries and Wages Expense
    C

          

  4. The steps in the accounting cycle for a merchandising company are the same as those in a service company except
    A. an additional adjusting journal entry for inventory may be needed in a merchandising company.
    B. closing journal entries are not required for a merchandising company.
    C. a post-closing trial balance is not required for a merchandising company.
    D. a multiple-step income statement is required for a merchandising company.
    D

          

  5. In a worksheet, Inventory is shown in the following columns
    A. adjusted trial balance debit and balance sheet debit.
    B. income statement debit and balance sheet debit.
    C. income statement credit and balance sheet debit.
    D. income statement credit and adjusted trial balance debit.
    A

          

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