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Quiz 4

1. A company usually determines the amount of supplies used during a period


by
2. If the adjusting entry to record depreciation at the end of the month was not
done, the financial statements would have
3. If the adjusting entry to record accrued salaries at the end of the month was
not done, the financial statements would have the following problems

4. If the adjusting entry to adjust the unearned revenue account for earned
revenue was not done at eh end of the month the financial statements would
have the following problems
5. Management usually wants ______ financial statements and the IRS requires
all businesses to file _______ tax returns.
6. Unearned Revenue is classified as a liability.

7. Which of the following is not generally an accounting time period?


8. Which of the following would not result in unearned revenue?
9. At the end of the accounting period, the balances of which types of accounts
are carried over to the next accounting period?

10.Depreciation on the furniture for the month is $200. The adjusting entry done
at the end of the month is
11.Accrued revenues are earned but not yet received or recorded.
12.Under the accrual basis of accounting

13.The purpose of adjusting entries is to


14.The general term employed to indicate an expense that has not been paid or
revenue that has not been received and has not yet been recognized in the
accounts is
15.If the adjusting entry to record accrued revenue at the end of the month was
not done, the financial statements would have the following problems

16.Accumulated Depreciation is a contra asset account.


17.The matching principle matches expenses with revenues.
18.The revenue recognition principle dictates that revenue should be recognized
in the accounting records when it is earned.

19.Goods purchased for future use in the business, such as supplies, are called
prepaid expenses.
20.At the end of the month on a Wednesday, the business owes employees
$720; the business will not pay the employees until Friday. The adjusting
entry done at the end of the month is

Quiz 5

1. Company A sells $600 of merchandise on account to Company B with credit


of 2/10, n/30. If Company B remits a check taking advantage of the discount
offered, what is the amount of Company Bs check?
2. If a purchaser using a perpetual inventory system pays the transportation
costs for purchased goods, then the
3. Freight costs incurred by a seller on merchandise sold to customers will cause
an increase

4. Inventory becomes part of cost of goods sold when a company sells the
inventory.
5. What type of account is Sales Returns and Allowances? Contra Revenue
6. A credit sale of $900 is made on July 15, terms 2/10, net/30, on which a
return of $50 is granted on July 18. What amount is received as payment in
full on July 24?

7. Gross profit does not appear on a service company income statement.


8. Each of the following companies is a merchandising company except a
moving company.
9. Which accounts normally have a debit balance? Both sales discounts and
sales returns and allowances.

10.Which of the following is a true statement about inventory systems?


11.Sales revenue may be recorded before cash is collected.
12.A decline in a company's gross profit could be caused by all of the following
except paying lower prices to its suppliers.

13.A Sales Returns and Allowances account is not debited if a customer utilizes a
prompt payment incentive.
14.The operating expenses section of an income statement for a merchandising
company would not include Cost of goods sold.
15.Use the following data to answer the question.
Sales $1,200,000
Sales Discounts $18,000
Sales Returns and Allowances $24, 000
Cost of Goods Sold $720,000
Operating Expenses $240, 000
Gross Profit on the Income Statement is

16.You are a sporting goods store owner. You want your gross profit rate to be
high.
17.A merchandiser that sells directly to consumers is a retailer.
18.Sales revenues are usually considered earned when goods have been
transferred from the seller to the buyer.

19.Holmes Company paid within the discount period for merchandise with a cost
of $8,000; the payment terms were 2/10, n/30. The journal entry to record
this transaction is
20.Use the following data for this question.
Operating Expenses $45,000
Sales Returns and Allowances $13,000
Sales Discounts $6,000
Sales $150,000
Cost of Goods Sold $67,000
The gross profit rate would be

Quiz 6

1. The following information was available for Hawley Company at December


31, 2007. Hawleys inventory turnover ratio in 2007 was
2. If goods in transit are shipped FOB destination the seller has legal title
3. Your merchandising company is taking inventory. Your company has sold
goods the Suttle Company; Suttle company has title to those goods. You
are still holding the goods for Suttles pickup. These goods should be
included

4. The factor which determines whether or not goods should be included in a


physical count of inventory is legal title.
5. When a perpetual inventory system is used, which of the following is a
purpose of taking a physical inventory? To check the accuracy of the
perpetual inventory records
6. Days in inventory is calculated by dividing 365 days by the inventory
turnover ratio.

7. Which accounting concept or principle is violated by the lower of cost or


market rule for inventory? Cost principle
8. Which of the following is an advantage of the Average Cost method of
costing inventory?
9. Your merchandising company is taking inventory. Your company has
shipped goods on consignment to Hamlin Company. These goods should
be included in the inventory of your company.

10.If companies use different inventory cost flow assumptions when the cost
of goods have not been constant through the year, then the cost of goods
purchased during the year will be identical.
11.In a period of rising prices, which of the following inventory methods
generally results in the lowest net income figure? LIFO method
12.Your merchandising company is taking inventory. Your company has
bought goods from Hawthorne Company. The goods are in transit from
Hawthorne Company shipped FOB destination. These goods should be
included in the inventory of Hawthorne Company.

13.Your merchandising company is taking inventory. Your company has


bought goods from Hull Company; your company has title to those goods.
Hull Company is still holding the goods for your company's pickup. These
goods should be included in the inventory of your company.
14.At December 31, 2007 Sunrise Company's inventory records indicated a
balance of $752,000. Upon further investigation it was determined that
this amount included the following:
$112,000 in inventory purchases made by Sunrise shipped from the seller
12/27/07 terms FOB destination, but not due to be received until January
2nd
$74,000 in goods sold by Sunrise with terms FOB destination on
December 270i. The ood are not expected to reach their destination until
January 6th.
$6,000 of goods received on consignment from Dollywood Company
What is Sunrise's correct ending inventory balance at December 31, 2007?

15.Use the following data for the question.


Jan 01 Beginning Inventory 100 units at 55 per unit Total: 5500
Jan 03 Purchase 50 units at $6 per unit Total: 5300
Jan 10 Purchase 80 units at $7 per unit Total: 5560
Jan 17 Purchase 30 units at $8 per unit Total: $240
Goods Available for Sale 260 units Total: $1,600
Jan 24 Sale 220 units
Using FIFO, the Cost of Goods Sold on the Income Statement is
16.Which of the following is not a common cost flow assumption used in
costing inventory? Middle-in, first-out

17.The consistent application of an inventory costing method enhances


comparability.
18.Of the following companies, which one would not likely employ the specific
identification method for inventory costing? Hardware Store

19.Use the following data for the question.


Jan 01 Beginning Inventory 100 units at 55 per unit Total: 5500
Jan 03 Purchase 50 units at 56 per unit Total: 5300
Jan 10 Purchase 80 units at 57 per unit Total: 5560
Jan 17 Purchase 30 units at 58 per unit Total: 5240
Goods Available for Sale 260 units Total: 51,600
Jan 24 Sale 220 units
The Jan 24 sale consisted of 100 units from the beginning inventory, 40
units from the Jan 3 purchase, 60 units from the Jan 10 purchase, and 20
units from the Jan 17 purchase.
Using Specific Identification, the ending Inventory valuation is
20.Days in Inventory shows the number of days the company held an
average inventory item before selling it to a customer.

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