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4 Written questions

4 Matching questions

  1. Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance.
    A. True
    B. False
  2. All of the following are contra revenue accounts except
    A. Sales Revenue.
    B. Sales Allowances.
    C. Sales Discounts.
    D. Sales Returns.
  3. Which of the following accounts will appear in the trial balance of a merchandising company but not a service company?
    A. Salaries Expense.
    B. Inventory.
    C. Accumulated Depreciation.
    D. Dividends.
  4. Stine Company purchased merchandise with an invoice price of $2,000 and credit terms of 1/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit terms?
    A. 10%
    B. 12%
    C. 18%
    D. 36%
  1. a TRUE
  2. b A
  3. c B
  4. d C

5 Multiple choice questions

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

5 True/False questions

  1. In a periodic inventory system the entry to record the sale of merchandise on account affects which of the following accounts?
    A. Cost of Goods Sold.
    B. Purchases.
    C. Inventory.
    D. Sales Revenue.
    D

          

  2. All of the following items would be reported as Other revenues and gains except
    A. Gain on Sale of Equipment.
    B. Interest Revenue.
    C. Rent Revenue.
    D. Sales Revenue.
    D

          

  3. A company that maintains a perpetual inventory system has an inventory account balance of $50,000. The physical count of goods on hand totals $49,600. Which of the following adjusting entries is correct?
    A. debit Purchases and credit Inventory.
    B. debit Cost of Goods Sold and credit Inventory.
    C. debit Inventory and credit Purchases.
    D. debit Sales Discounts and credit Inventory.
    B

          

  4. There are more steps involved in preparing a worksheet for a merchandising company than for a service company.
    A. True
    B. False
    FALSE

          

  5. In determining Cost of goods sold
    A. Purchase Discounts are deducted from Net Purchases
    B. Freight-out is added to Net Purchases.
    C. Purchase Returns and Allowances are deducted from Net Purchases.
    D. Freight-in is added to Net Purchases.
    B