5 Written questions
3 Matching questions
- Which of the following accounts will normally appear in the ledger of a merchandising company that uses a perpetual inventory system?
C. Cost of Goods Sold.
D. Purchase Discounts.
- 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.
- 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.
- a B
- b D
- c C
5 Multiple choice questions
5 True/False questions
A merchandiser using a perpetual system will require one additional adjusting entry to make the records agree with the actual inventory on hand.
B. False → B
Which one of the following transactions is recorded with the same entry in a
perpetual and a periodic inventory system?
A. cash received on account with a discount
B. payment of freight costs on a purchase
C. return of merchandise sold
D. sale of merchandise on credit → D
If Sales Revenue is $400,000, Cost of Goods Sold is $310,000, and Operating expenses are $60,000, the Gross profit is
D. $400,000. → A
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. → C
Hale Company sells merchandise on account for $1,000 to Long Company with credit terms of 2/10, n/30. Long Company returns $200 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?
D. $784 → C