Which of the following accounts would be closed at the end of the year using the perpetual inventory system?

• a. Cost of Goods Sold
• b. Merchandise Inventory
• c. Accounts Receivable
• d. Accounts Payable

Which of the following is most closely linked to accounting conservatism? a. Lower-of-cost-or-market rule b. Materiality concept c. Disclosure principle d. Consistency principle

For each of the following accounts, identify whether it would be closed at year-end (yes or no) and on which financial statement the account would be reported (Balance Sheet, Income Statement, or Retained Earnings Statement).

A. Accounts Payable

The adjusted trial balance shows a. amounts that may be out of balance. b. account balances after adjustments. c. assets and liabilities only. d. revenues and expenses only.

The balance sheet reports a. financial position on a specific date. b. results of operations on a specific date. c. financial position for a specific period. d. results of operations for a specific period.

Prepare the journal entries to record the following transactions on Opps Company’s books under a perpetual inventory system.

(a) On March 2, Novy Company sold $900,000 of merchandise to Opps Company, terms 2/10, n/30. The cost of the merchandise sold was$590,000.

(b) On March 6, Opps Company returned $90,000 of the merchandise purchased on March 2. The cost of the returned merchandise was$62,000.

(c) On March 12, Novy Company received the balance due from Opps Company.

Which of the following is true of accrual basis accounting and cash basis accounting? a. Accrual accounting records revenue only when it is earned. b. Accrual accounting is not allowed under GAAP. c. Cash basis accounting records all transactions. d. All of the above are true.

Cushman Company, Inc. had $800.000 in sales, sales discounts of$12,000, sales returns and allowances of $18,000, cost of goods sold of$380,000, and $275,000 in operating expenses.

How much is the company's gross profit?

A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned$200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is:

a. Debit Merchandise Inventory $200; credit Accounts Payable$200.

b. Debit Merchandise Inventory $200; credit Sales Returns$200.

c. Debit Accounts Payable $1,800; credit Purchase Returns$200; credit Merchandise Inventory $1,600.

d. Debit Merchandise Inventory$1,600; credit Cash $1,600.

e. Debit Accounts Payable$200; credit Merchandise Inventory $200

Freddy Flint owns a small retail business called Flint’s Fantasy. The cash account has a balance of $20,000 on July 1. The following transactions occurred during July:

July 1$~~~~$Issued Check No. 414 in payment of July rent,$1,500. $~~~~$ 1 $~~~~$ Purchased merchandise on account from Tang’s Toys, Invoice No. 311, $2,700, terms 2/10, n/30.$$3$$Purchased merchandise on account from Sillas & Company, Invoice No. 812,$3,100, terms 1/10, n/30. $~~~~$ 5 $~~~~$ Returned merchandise purchased from Tang’s Toys, receiving a credit memo on the amount owed, $500.$$8$$Purchased merchandise on account from Daisy’s Dolls, Invoice No. 139,$1,900, terms 2/10, n/30. $~~~~$ 11 $~~~~$ Issued Check No. 415 to Tang’s Toys for merchandise purchased on account, less return of July 5 and less 2% discount. $~~~~$ 13 $~~~~$ Issued Check No. 416 to Sillas & Company for merchandise purchased on account, less 1% discount. $~~~~$ 15 $~~~~$ Returned merchandise purchased from Daisy’s Dolls, receiving a credit memo on the amount owed, $400.$$18$$Issued Check No. 417 to Daisy’s Dolls for merchandise purchased on account, less return of July 15 and less 2$$25$$Purchased merchandise on account from Allied Business, Invoice No. 489,$2,450, terms n/30. $~~~~$ 26 $~~~~$ Purchased merchandise on account from Tang’s Toys, Invoice No. 375, $1,980, terms 2/10, n/30.$$29$$Purchased merchandise on account from Sillas & Company, Invoice No. 883,$3,460, terms 1/10, n/30.

REQUIRED

1. Enter the transactions in a general journal.
2. Post from the journal to the general ledger and accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.

Assets are listed on the balance sheet in the order of their

• a. purchase date.
• b. adjustments.
• c. liquidity.
• d. balance.

Journalize the following transactions that occurred in February 2016 for Faucet. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Feb. 3. Purchased merchandise inventory on account from Sidecki Wholesalers, $3,500. Terms 2/15, n/EOM, FOB shipping point. 4. Paid freight bill of$75 on February 3 purchase. 4. Purchased merchandise inventory for cash of $2,200. 6. Returned$800 of inventory from February 3 purchase. 8. Sold merchandise inventory to Harvey Company, $5,700, on account. Terms 2/15, n/35. Cost of goods,$2,508. 9. Purchased merchandise inventory on account from Teaton Wholesalers, $6,000. Terms 2/10, n/30, FOB destination. 10. Made payment to Sidecki Wholesalers for goods purchased on February 3, less return and discount. 12. Received payment from Harvey Company, less discount. 13. After negotiations, received a$100 allowance from Teaton Wholesalers. 15. Sold merchandise inventory to Jackson Company, $2,900, on account. Terms 3/10, n/EOM. Cost of goods,$1,276. 22. Made payment, less allowance, to Teaton Wholesalers for goods purchased on February 9. 23. Jackson Company returned $500 of the merchandise sold on February 15. Cost of goods,$220. 25. Sold merchandise inventory to Secker for $2,000 on account that cost$880. Terms of 2/10, n/30 were offered, FOB shipping point. As a courtesy to Secker, $85 of freight was added to the invoice for which cash was paid by Faucet. 26. After negotiations, granted a$100 allowance to Secker for merchandise purchased on February 25. 27. Received payment from Secker, less allowance and discount. 28. Received payment from Jackson Company, less return.

Use Inventory Table B discussed before. and the gross profit inventory method to estimate the ending inventory and cost of goods sold if a $54 \%$ gross profit on sales is realized and net sales are $\$ 1,644.72$.

See the example discussed before.

Use Inventory Table A and the gross profit inventory method to estimate the ending inventory and cost of goods sold if a $30 \%$ gross profit is realized on sales and net sales are $\$ 115,440$