BKAL1013 A141

TUTORIAL # 4
1.

RM6,860.00
RM6,982.50
RM7,000.00
RM6,985.00

Cost of merchandise sold would be classified as a (an):

A.
B.
C.
D.

6.

RM11,662
RM11,672
RM12,250
RM11,172

Merchandise with an invoice price of RM7,000 is purchased with terms of 2/10, n/30, FOB shipping
point. Transportation costs paid by the buyer were RM125. What is the cost of the merchandise
purchased if payment is made during the discount period?
A.
B.
C.
D.

5.

shows gross profit but not income from operations.

shows both gross profit and income from operations.
shows neither gross profit nor income from operations.
shows income from operations but not gross profit.

A sales invoice included the following information: merchandise price, RM12,000; transportation,
RM500; terms 2/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of
RM600 is granted prior to payment, that the transportation is prepaid by the seller, and that the
invoice is paid within the discount period, what is the amount of cash received by the seller?
A.
B.
C.
D.

4.

debit Cash, credit Accounts Receivable.

debit Accounts Receivable, credit Sales.
debit Accounts Receivable, credit Cash.
debit Merchandise Inventory, credit Accounts Payable.

Multiple-step Statement of Profit or Loss and Others Comprehensive Incomes:

A.
B.
C.
D.

3.

DUE DATE: 13 November 2014

When a corporation sells merchandise and the terms are FOB shipping point and pays the shipping
costs, the seller would record the transportation costs with the following entry:
A.
B.
C.
D.

2.

th

asset.
expense.
liability.
revenue.

The discount period for credit terms of 1/10, n/30 is:

A.
B.
C.
D.

1 day.
10 days.
20 days.
30 days.

BKAL1013 A141

7.

Freight costs incurred by the seller are recorded in the:

A.
B.
C.
D.

8.

The sales discount is based on:

A.
B.
C.
D.

9.

statement of changes in owners equity.

statement of retained earnings.
statement of financial position.
statement of cash flows.

Information about the accounting policies adopted in preparing the financial statements are explained
in the:
A.
B.
C.
D.

13.

Reflect prospective cash receipts to investors and creditors.

Reflect the companys resources and claim to its resources.
Reflect future investment earnings.
Reflect prospective cash flows to the company.

If you were analyzing a corporations shareholders equity, and you wanted to determine how many
units of common share were issued during the current year, the best financial statement to review
would be the:
A.
B.
C.
D.

12.

Sales Returns and Allowances and Accounts Receivable

Accounts Receivable and Cost of Merchandise Sold
Merchandise Inventory and Cost of Merchandise Sold
Sales Returns and Allowances and Merchandise Inventory

Which of the following is NOT an objective of financial reporting?

A.
B.
C.
D.

11.

invoice price plus transportation costs.

invoice price less discount.
invoice price plus transportation costs less returns and allowances.
invoice price less returns and allowances.

In a perpetual inventory system, what accounts are credited when a customer returns merchandise to
the seller?
A.
B.
C.
D.

10.

sales account.
cost of merchandise sold account.
transportation in account.
transportation out account.

statement of changes in owners equity.

notes to the financial statements.
statement of cash flow.
corporate governance statement.

How often is the annual report being issued?

A.
B.
C.
D.

Every six month

Every month
Once a year
None of the above is correct

BKAL1013 A141

14. Credit terms are 3/12, n/30 indicates that the buyer is:
a.
b.
c.
d.

Allowed a 30% discount if payment is made within 12 days

Allowed a 12% discount if payment is made within 30 days
Allowed a 3% discount if payment is made within 12 days
Allowed a 3% discount if payment is made within 30 days

15. A merchandiser purchases inventory on account under a perpetual inventory system with terms of
3/15, n/45. The merchandiser would :
A.
B.
C.
D.

Debit Purchase Discounts on date of purchase if the discount is not taken

Debit Purchase Discounts on date of purchase if the discount is taken
Credit Inventory on date of payment if discount is not taken
Credit Inventory on date of payment if discount is taken

16. Merchandise subject terms 2/10, n/ 30, FOB destination, is sold on account to a customer for
RM15,000. The purchaser returns RM2,000 of merchandise within the discount period. Assuming
payment is made within the discount period, what is the amount of cash discount allowable?
A.
B.
C.
D.

RM300
RM260
RM400
RM150

17. A purchase return or allowance under a perpetual inventory system is credited to:
A.
B.
C.
D.

Inventory
Account Receivable
Account Payable
Purchases

18. The major revenue of merchandiser is _________ while the major expense(s) is (are) ____________.
A.
B.
C.
D.

sales revenue, cost of goods sold

gross profit, operating expenses
sales revenue, operating expenses
income from operation, cost of goods sold

19. The buyer is responsible for the shipping costs when the shipping is:
A.
B.
C.
D.

FOB shipping point

COD shopping point
FOB destination
COD destination

20. Which of the following account would the seller debit when the purchaser takes advantage of credit
terms within the discount period?
A. Purchase Discount
B. Purchase Returns and Allowances
C. Sales Returns and Allowances

BKAL1013 A141

D. Sales Discount
21. Under a perpetual inventory system, the entry to record the cost of goods sold would include a debit
to:
A.
B.
C.
D.

Cost of Goods Sold and credit to Inventory for the cost of the inventory
Inventory and credit to Sales Revenue for the retail price of the inventory
Cost of Goods Sold and credit to Inventory for the retail price of the inventory
Inventory and credit to Sales Revenue for the cost of the inventory

Use the following data for Questions 22 to 27.

MyGoodfellas Trading has the following information:
Net sales
Gross purchases
Gross profit
Ending inventory
Sales return
Purchases returns

22.

What is the gross sales amount?

A.
B.
C.
D.

23.

RM600,000
RM690,000
RM693,000
RM707,000

What is the cost of goods sold?

A.
B.
C.
D.

25.

RM1,007,000
RM1,010,000
RM1,100,000
RM1,400,000

What is the net purchases amount?

A.
B.
C.
D.

24.

RM
1,000,000
700,000
400,000
100,000
10,000
7,000

RM300,000
RM400,000
RM600,000
RM900,000

Herry Pottery Maker Enterprise purchased goods having a list price of RM36,000, a trade discount of
30%, and a cash discount of 5%. The cash payment to settle the account within the discount period
is:
A. RM23,400
B. RM23,940

BKAL1013 A141

C. RM25,200
D. RM34,200
26.
If merchandised sold on account is returned, the seller may inform the buyer of the
on the item by issuing:
A.
B.
C.
D.
27.

an invoice
a receipt
a credit note
a debit note

Which of the following is a FALSE statement about a multiple-step income statement?

A.
B.
C.
D.

Operating expenses are often classified as selling and administrative expenses

There may be a section for operating assets
There may be a section for non-operating activities
There is a section for cost of goods sold

reduction

BKAL1013 A141

TUTORIAL # 4

DUE DATE: 13th November 2014

MATRIC NO: _____________

NAME:

GROUP: _____

POSITION NO: ______

______________________________________

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