Accounting Expert Answers & Study Resources : Page 282

37) Perez Company sold 500 units of inventory at $25 per unit for cash. The company uses the perpetual inventory system. The cost of the units sold was $10 per unit. Provide the journal entries to record the sale. 38) Perez Company sold 500 units of inventory at $25 per unit.

16) A subsidiary ledger is: A) an accounting journal designed to record a specific type of transaction. B) a created list of the accounts used by a business entity to define each class of items for which cash is spent or received. C) a complete record of business transactions recorded in a ledger.

22) An adjusted trial balance of Woods Company for the year 2015 is given below. Prepare a single-step income statement for the company. Cash $15,000 Accounts Receivable 42,000 Merchandise Inventory 60,000 Supplies 15,000 Land 300,000 Accounts Payable $3,000 Notes Payable 25,000 Smith, Capital 326,000 Smith, Withdrawals 3,000 Sales Revenues 480,000 Sales Returns and Allowances 6,000 Sales Discounts 9,000 Cost of Goods Sold 240,000 Salaries Expense 15,000 Utility Expense 69,000 Rent Expense 54,000 Interest Expense 6,000 Totals $834,000 $834,000 Learning Objective 5-6 1) The gross profit percentage measures the profitability.

11) An entity that buys goods and sells them to customers at a markup is a: A) merchandiser. B) service provider. C) manufacturer. D) producer. 12) Gross profit is calculated as the difference between net sales revenue and: A) purchases. B) cost of goods sold. C) cost of merchandise inventory. D) selling and administrative expenses. 13) The Gajet Store Inc..

11) A company discovers that its cost of goods sold is understated by an insignificant amount. They do not need to correct the error because of the conservatism principle. 12) A company discovers that its cost of goods sold is understated by an insignificant amount. They do not need to correct.

17) A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold 150 units for $50 each from March 1 through December 31. If the company uses the weighted-average inventory costing method, calculate the amount of Cost of Goods.

21) An accounting information system is said to be relevant if it: A) works smoothly with the business's employees and organizational structure. B) safeguards a business's assets and reduces the likelihood of fraud and errors. C) provides information that will improve decision making and reduce uncertainty. D) can accommodate changes in the business over.

11) External auditors evaluate company controls to ensure the financial statements are presented fairly in accordance with Generally Accepted Accounting Principles. 12) The Sarbanes-Oxley Act was passed by the Public Company Accounting Oversight Board. 13) Burglar alarms, fire alarms, and security cameras improve internal control. 14) Separating the custody of assets from accounting.

35) A company purchased inventory for $75,000 from a vendor on account, FOB shipping point, with terms of 3/10, n/30. The company paid the shipper $1,500 cash for freight in. The company paid the vendor 9 days after the sale. If there was no beginning inventory, the cost of inventory.

31) Which of the following is an example of a storage device in an accounting information system? A) monitor B) network C) printer D) server 32) Which of the following is an input device in an accounting information system? A) keyboard B) internet protocol C) printer D) router 33) Which of the following is an output device in an accounting.

2) The net income calculated using both the single and multi-step formats of income statement is always the same. 3) Operating income is gross profit minus operating expenses. 4) A single-step income statement shows subtotals for gross profit and operating income. 5) In a multi-step income statement, interest revenue and interest expense are.

Learning Objective 7-4 1) Hardware is electronic equipment that includes computers, monitors, printers, and the network that connects them. 2) Enterprise resource planning (ERP) systems are software systems that can integrate all of a company's functions, departments, and data into a single system. 3) One of the main disadvantages of a typical ERP.

45) Reid Art Supply Company uses a perpetual inventory system. The company had the following transactions during August, 2015: Aug. 5:Purchased $2,900 of merchandise on account. Freight and credit terms were FOB shipping point, 3/15, n/60. Aug. 9:Paid transportation costs of $440 for the Aug. 5 purchase. Aug. 10:Returned $600 of defective merchandise.

14) A merchandiser uses a perpetual inventory system. The third step in the process of closing the accounts of a merchandiser is to: A) make the revenue accounts equal to zero via the Income Summary account. B) make the Income Summary account equal to zero via the Owner's Name, Withdrawals account. C) make.

11) Which of the following is an example of hardware? A) monitor B) Microsoft Office C) ERP D) QuickBooks 12) Which of the following is an entry-level accounting software package? A) Microsoft Word B) QuickBooks C) Minitab D) router 13) An enterprise resource planning (ERP) system is a: A) hardware system that controls the access of employees to different levels of.

13) The purchases journal of a business that uses periodic inventory system will include a column titled: A) Cost of Goods Sold DR. B) Purchases DR. C) Accounts Payable DR. D) Merchandise Inventory DR. 14) Cash purchases are generally recorded in the: A) sales journal. B) cash receipts journal. C) cash payments journal. D) purchases journal. 15) Which of the.

  Learning Objective 5-1 1) A wholesaler is a merchandiser who buys merchandise from a manufacturer and sells the same to a retailer. 2) Hitech Inc., a small, local grocer, without optical scanning cash registers and computer systems, wants to introduce an inventory system to track its inventory. The perpetual inventory system is.

27) A company that uses the perpetual inventory system sold goods to a customer on account for $2,000. The cost of the goods sold was $1,000. Which of the following journal entries correctly records this transaction? A) Cost of Goods Sold 2,000                Sales Revenue 2,000 B) Merchandise Inventory 2,000                Cost of Goods Sold 2,000 C) Accounts Receivable 2,000               .

  Learning Objective 7-1 1) An accounting information system (AIS) collects, records, stores, and processes accounting data to produce information that is useful for decision makers. 2) The collection of time records is an Accounting Information System activity that is classified as a business transaction that involves the sale of merchandise inventory. 3) An.

  Learning Objective 8-1 1) Internal control is an organizational plan that ensures that the financial statements are prepared and submitted in time. 2) Sarbanes-Oxley Act requires all the private companies in the U.S. to maintain an internal control system. 3) The Public Company Accounting Oversight Board oversees the work of auditors of public.

11) One of the advantages of a computerized accounting information system, as compared to a manual one, is that it does not cost to ensure that the firm's data and information are secure. 12) In an accounting information system, outputs are the reports used for decision making, including the financial statements. 13).

19) When inventory costs are declining, which of the following inventory costing methods will result in the highest cost of goods sold? A) First-in, first-out B) Last-in, first-out C) Weighted-average D) Specific identification 20) During a period of declining inventory costs, which of the following costing methods should be used by a company that intends.

18) Williams Company had the following balances and transactions during 2014. Beginning Inventory 10 units at $70 June 10 Purchased 20 units at $80 December 30 Sold 15 units December 31 Replacement cost $90 Williams maintains its records of inventory on a perpetual basis using the FIFO method. Calculate the amount of ending Merchandise Inventory at December 31, 2014.

25) Which of the following is true of freight in? A) It is an administrative expense. B) It is a selling expense. C) It is transportation cost on purchases. D) It is transportation cost on sales. 26) A company using the perpetual inventory system purchased inventory worth $25,000 on account with terms of 2/10, n/30..

  Learning Objective 6-1 1) The consistency principle states that a business should use the same accounting methods from period to period. 2) The lower-of-cost-or-market rule demonstrates accounting conservatism in action. 3) A company reports in its financial statements that it uses the FIFO method of inventory costing. This is an example of the.

3) Under the last-in, first-out method, the amount of cost of goods sold calculated using the perpetual inventory system will differ from the amount calculated using the periodic inventory system. 4) Samson Company had the following balances and transactions during 2014: Beginning Merchandise Inventory 10 units at $95 March 10 Sold 8 units June 10 Purchased 20.

4) If a physical count of inventory indicates that the Merchandise Inventory account is overstated, an additional adjusting entry is required to record the difference. 5) The entry to close Cost of Goods Sold includes a debit to Income summary. 6) The inventory account balance is $50,000. An actual count of inventory.

9) Which of the following inventory costing methods yields the highest cost of goods sold during a period of rising inventory costs? A) Specific identification B) Weighted-average C) Last-in, first-out D) First-in, first-out 10) Which of the following inventory costing methods yields the lowest cost of goods sold during a period of rising inventory costs? A).

5) The ending merchandise inventory for the current year is overstated by $20,000. What effect will this error have on the following year's Net Income? A) Net income will be overstated by $40,000. B) Net income will be overstated by $20,000. C) Net income will be understated by $20,000. D) Net income will be.

6) Generally, all transactions are recorded in a special journal as well as the general journal. 7) Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger. 8) After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in.

7) Net sales revenue is equal to sales revenue less cost of goods sold. 8) When a seller grants a sales allowance, the customer does not return any goods to the seller. 9) A company sold merchandise worth $221 for $350 on account. The seller uses the perpetual inventory system. The entry.

15) Freight out is an addition to the Merchandise Inventory account if the seller uses the perpetual inventory system. 16) On January 21st, 2014, Bessant merchandisers, received merchandise from Mullies Inc. On that date, it found a few of these goods to be damaged. On January 22, it returned the damaged.

36) Which of the following will be recorded in the Other Accounts CR column of the cash receipts journal? A) cash sales B) receipt of interest revenue C) receipt of accounts receivable D) sales discounts 37) A CR.5 posting reference in a subsidiary ledger indicates that: A) the posting is transferred from the cash receipts journal,.

12) The following contains information from the records of the Wellborn Engineers and Architects. Current Assets $74,000 Current Liabilities 44,000 Long-term Assets 95,000 Long-term Liabilities 60,000 Total Revenues 50,000 Total Expenses 30,000 Calculate the current ratio. A) 1.58 B) 2.32 C) 0.59 D) 1.68 13) The following contains information from the records of the Wellborn Engineers and Architects. Current Assets $74,000 Current Liabilities 44,000 Long-term Assets 95,000 Long-term Liabilities 60,000 Total Revenues 50,000 Total Expenses 30,000 Which of the following statements.

21) The disclosure principle states that a company should disclose all major accounting methods and procedures in the: A) balance sheet. B) income statement. C) footnotes to the financial statements. D) adjusted trial balance. 22) The materiality concept states that a company must: A) report only such information that enhances the financial position of the company. B).

12) The following data is available: Net sales $13,000 Normal gross profit 45% Beginning inventory 8,000 Net purchases 7,000 Using the gross profit method, the amount of gross profit would be: A) $15,000 B) $6,750 C) $5,850 D) $3,600 13) The following data is available: Net sales $20,000 Normal gross profit 45% Beginning inventory 8,000 Net purchases 7,000 Using the gross profit method, the cost of goods sold would be: A) $12,000 B) $11,000 C) $13,000 D).

27) The Sales Discounts account is a contra account to the: A) Purchases account. B) Sales Revenue account. C) Merchandise Inventory account. D) Sales Returns and Allowance account. 28) Gross profit is calculated as: A) sales revenue less sales discounts and allowances. B) sales revenue less operating expenses. C) net sales revenue less sales discounts. D) net sales revenue.

2) If a merchandiser uses the periodic inventory system, it is necessary to conduct physical count of inventory to determine the quantity of inventory on hand. 3) Which of the following line items would appear on the income statement of a company that uses the periodic inventory system, but not on.

21) Which of the following is a requirement of the Sarbanes-Oxley Act? A) An outside auditor must issue an internal control report for each public company. B) The Public Company Oversight Board must conduct audits of public companies. C) The accounting firm that audits a public client must also provide consulting services for.

12) In which of the financial statements do Merchandise Inventory and Cost of goods sold appear? A) on the balance sheet and statement of owner's equity, respectively B) on the statement of owner's equity and income statement, respectively C) on the balance sheet and income statement, respectively D) on the income statement and statement.

26) Multi Corporation sold merchandise for $4,450 to Susan on credit. The cost of goods sold was $1,185. Assuming that the firm is following a perpetual inventory system, it will record $4,450 in the: A) general journal. B) Accounts Receivable DR, Sales Revenue CR column of the sales journal. C) Merchandise Inventory DR.

5) Nurix Inc. sold goods on credit terms n/20 to Jelly Harper Inc. This means no discounts are offered, and the amount of the invoice must be paid within 20 days from the date of invoice. 6) Defective, damaged, or otherwise unsuitable merchandise that is returned to the seller is referred.

23) A cash payments journal is a special journal used to record: A) only the cash payments by currency. B) the net of the cash payments and cash receipts by currency. C) cash payments by check and currency. D) the net of cash payments and cash receipts by check and currency. 24) Cash disbursement journals.

21) Which of the following transactions is recorded in the "Receive Payments" function of QuickBooks? A) Paying electricity bill B) Sold merchandise inventory on account to a customer C) Sold a product to a customer for cash D) Coupon payments to the bondholders 22) Which of the following transactions is recorded in the "Enter Bills".

8) Which of the following values is considered the market value when valuing inventory at lower-of-cost-or-market? A) Sales price less the company's normal mark-up percentage B) Current replacement cost C) Cost plus the company's normal mark-up percentage D) Historic cost 9) Under GAAP, which of the following amounts would be reported as Merchandise Inventory on.

3) When recording in a purchases journal with a periodic inventory system, the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR. 4) Credit purchases are recorded in the purchases journal. 5) The Other Accounts DR columns of a purchases journal are used for recording.

7) The total cost spent on inventory that was available to be sold during a period is called cost of goods sold. 8) Which of the following inventory costing methods is based on the actual cost of each particular unit of inventory? A) Specific identification B) Weighted-average C) Last-in, first-out D) First-in, first-out 9) Which of.

17) Up-to-date Merchandisers has the following transactions for the month of July. Sales revenue $460,000 Cost of goods sold 300,000 Operating expenses 85,000 Sales discounts 20,000 Sales returns and allowances 15,000 Interest revenue 5,000 Calculate Gross Profit. A) $90,000 B) $125,000 C) $140,000 D) $160,000 18) On November 1, 2015, Wrenns Martch sold merchandise with a cost of $5,000 for $10,000, FOB destination, with payment terms of 3/10,.

2) Gross profit is calculated by dividing sales revenue by cost of goods sold. 3) The gross profit method is a way to estimate inventory on the basis of the cost of goods sold model. 4) A way to estimate the cost of ending merchandise inventory on the basis of the ratio.

5) Inventory turnover measures: A) the days' sales in inventory ratio. B) how rapidly merchandise inventory is purchased. C) how rapidly merchandise inventory is sold. D) the time period for inventory become obsolete (worthless). 6) A lower days' sales in inventory for Company X when compared to other companies, indicates that Company X: A) is able.