ACCN 2010 Chapter 5 Quiz | Tulane University
- Tulane University / ACCN 2010
- 11 Jul 2021
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- Accounting & Economics Assignment Help / Finance
ACCN 2010 Chapter 5 Quiz | Tulane University
1.
When using a perpetual inventory system, why are discounts credited to Inventory?
The discounts are debited to discount expense and thus the credit has to be made to merchandise inventory.
The discounts reduce the cost of the inventory.
The discounts are a reduction of business expenses.
None of these answers choices are correct.
2.
Metlock’s Market recorded the following events involving a recent purchase of inventory:
Received goods for $78200, terms 2/9, n/30.
Returned $1700 of the shipment for credit.
Paid $700 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company’s inventory
increased by $75656.
increased by $75670.
increased by $74970.
increased by $77200.
3.
Assets purchased for resale are recorded in which of the following accounts?
Patents
Supplies
Equipment
Inventory
4.
Which of the following accounts is classified as a contra revenue account?
Sales Returns and Allowances
Sales Revenue
Purchase Discounts
Cost of Goods Sold
5.
The journal entry to record a credit sale ignoring cost of goods sold is
Accounts Receivable
Sales Revenue
Accounts Receivable
Sales Returns and Allowances
Cash
Service Revenue
Cash
Sales Revenue
6.
Under the perpetual inventory system, in addition to making the entry to record a sale, a company would
debit Cost of Goods Sold and credit Purchases.
make no additional entry until the end of the period.
debit Inventory and credit Cost of Goods Sold.
debit Cost of Goods sold and credit Inventory.
7.
The entry to record a sale of $2400 with terms of 2/10, n/30 will include a
debit to Sales Revenue for $2352.
credit to Sales Revenue for $2400.
debit to Sales Discounts for $48.
credit to Accounts Receivable for $2400.
8.
The entry to record the receipt of payment within the discount period on a sale of $1100 with terms of 2/15, n/30 will include a
debit to Sales Revenue for $1078.
credit to Sales Revenue for $1100.
credit to Accounts Receivable for $1100.
credit to Sales Discounts for $22.
9.
The credit terms offered to a customer by a business firm were 2/10, n/30, which means
two sales returns can be made within 10 days of the invoice date and no returns thereafter.
the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date.
the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date.
the customer must pay the bill within 10 days.
10.
Sheridan Company sells merchandise on account for $1600 to Pronghorn Company with credit terms of 2/12, n/30. Pronghorn Company returns $300 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?
$1274
$1150
$1232
$1268
11.
Pharoah Company sells merchandise on account for $3600 to Morton Company with credit terms of 2/14, n/30. Morton Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Pharoah Company make upon receipt of the check?
Cash 2940
Sales Returns and Allowances 600
Sales Discounts 60
Accounts Receivable 3600
Cash 3000
Accounts Receivable 3000
Cash 2940
Sales Returns and Allowances 660
Accounts Receivable 3600
Cash 3528
Sales Discounts 72
Sales Returns and Allowances 600
Accounts Receivable 3000
12.
With respect to the income statement
sales discounts increase the amount of sales.
contra revenue accounts do not appear on the income statement.
sales discounts are included in the calculation of gross profit.
contra revenue accounts increase the amount of operating expenses.
13.
Indicate which one of the following would not appear on both a single-step income statement and a multiple-step income statement.
Operating expenses
Cost of goods sold
Sales revenue
Gross profit
14.
Positive operating income will result if gross profit exceeds
cost of goods sold plus operating expenses.
salaries and wages expense.
operating expenses.
costs of goods sold.
15.
Interest expense would be classified on a multiple-step income statement under the heading
Other revenues and gains.
Other expenses and losses.
Operating expenses.
Cost of goods sold.
16.
Financial information is presented below:
Operating expenses $ 33000
Sales revenue 211000
Cost of goods sold 129000
Gross profit would be
$178000.
$ 49000.
$ 33000.
$ 82000.
17.
Financial information is presented below:
Operating expenses $ 33000
Sales revenue 211000
Cost of goods sold 129000
Gross profit would be
$178000.
$ 49000.
$ 33000.
$ 82000.
17
Financial information is presented below:
Operating expenses $ 26000
Sales revenue 250000
Cost of goods sold 171000
The gross profit rate would be
0.32.
0.68.
0.10.
0.21.
18.
At the beginning of the year, Whispering Winds had an inventory of $370000. During the year, the company purchased goods costing $1040000. If Whispering Winds reported ending inventory of $310000 and sales of $1900000, their cost of goods sold and gross profit rate would be
$1100000 and 58%.
$1100000 and 42.11%.
$730000 and 57.89%
$1170000 and 42%.
19.
Which of the following would not be considered a merchandising operation?
Service firm
Retailer
Wholesaler
Merchandising company
20.
The operating cycle of a merchandising company is
always one year in length.
about the same as that of a service company.
ordinarily shorter than that of a service company.
ordinarily longer than that of a service company.
.
USA 
India