4 Written Questions
3 Matching Questions
- FOB destination means that the seller places the goods free on board the common carrier and the buyer pays the freight costs.
- To record the sale of goods for cash in a perpetual inventory system
A. only one journal entry is necessary to record cost of goods sold and reduction of inventory.
B. only one journal entry is necessary to record the receipt of cash and the sales revenue.
C. two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to record the cost of goods sold and reduction of inventory.
D. two journal entries are necessary: one to record the receipt of cash and reduction of inventory, and one to record the cost of goods sold and sales revenue.
- 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 D
- b B
- c C
5 Multiple Choice Questions
5 True/False Questions
Under a periodic system, the company uses separate accounts to record freight costs, returns, and discounts.
B. False → TRUE
Under a perpetual inventory system, which of the following is not part of the journal entries made when merchandise is sold on credit?
A. credit the Cost of Goods Sold account.
B. credit the Sales Revenue account.
C. credit the Inventory account.
D. debit the Accounts Receivable account. → A
Income from operations is
A. Net sales less Cost of goods sold.
B. Net sales less Operating expenses.
C. Gross profit less Other expenses and losses.
D. Gross profit less Operating expenses. → B
Which of the following appears on both a single-step and a multiple-step income statement?
B. Gross profit.
C. Income from operations.
D. Cost of goods sold. → D
Cost of goods available for sale is computed by adding
A. inventory to ending inventory.
B. beginning inventory to the cost of goods purchased.
C. purchases and freight-in.
D. purchases to purchases discounts and freight-in. → B