Question 1

Which of the following accounts is used with a periodic inventory system?

Accepted Answer

A) Purchases 
B) Purchase Discounts 
C) Purchases Returns and Allowances 
D) All of these answers are correct. 
A) Purchases 
B) Purchase Discounts 
C) Purchases Returns and Allowances 
D) All of these answers are correct.

Question 2

Nicki's Pet Supply needs to estimate its ending inventory.Using the data below,compute Nicki's estimated cost of ending inventory for the month of April.
 $$\begin{array} { l l } 
\text { Beginuning inventory April } 1 & \$ 6,000 \
\text { Purchases for April } & 10,000 \
\text { Retail sales during April } & 15,000
\end{array}$$ 
Normal gross profit average 30%

Accepted Answer

The answer of Nicki's Pet Supply needs to estimate its...

Question 3

The inventory method that assumes the recent goods are sold first is:

Accepted Answer

A) LIFO. 
B) FIFO. 
C) weighted-average. 
D) specific invoice. 
A) LIFO. 
B) FIFO. 
C) weighted-average. 
D) specific invoice.

Question 4

To use the gross profit method to estimate inventory,you need to know the goods available for sale at retail.

Accepted Answer

A) True 
 B)False

Question 5

Under the ________ inventory system,cost of goods sold and the amount of merchandise inventory on hand are updated at the end of the accounting period.

Accepted Answer

The answer of Under the ________ inventory system,cost of goods...

Question 6

Hawkeye Tack uses a periodic inventory system.Hawkeye Tack sold 80 sweaters during September.Other data for September includes:
$$\begin{array} { | c | l | l | } 
\hline \text { Sep. } 1 & \text { Balance } & 40 @ \$ 24 \
\hline 8 & \text { Purchased } & 12 @ \$ 29 \
\hline 17 & \text { Purchased } & 25 @ \$ 35 \
\hline 25 & \text { Purchased } & 35 @ \$ 30 \
\hline
\end{array}$$
Cost of goods sold under the FIFO method is:

Accepted Answer

A) $2,081. 
B) $2,273. 
C) $2,215. 
D) $2,182. 
A) $2,081. 
B) $2,273. 
C) $2,215. 
D) $2,182.

Question 7

In a perpetual inventory system,the Merchandise Inventory account is updated:

Accepted Answer

A) when merchandise is sold. 
B) at the end of the period. 
C) when merchandise is purchased. 
D) All of the above are correct 
A) when merchandise is sold. 
B) at the end of the period. 
C) when merchandise is purchased. 
D) All of the above are correct

Question 8

The ending inventory for this year is overstated.This error would cause:

Accepted Answer

A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be understated. 
D) None of these is correct. 
A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be understated. 
D) None of these is correct.

Question 9

A business has sales of $125,000 and a normal gross profit of 40%.The estimated cost of goods sold is:

Accepted Answer

A) $100,000. 
B) $50,000. 
C) $75,000. 
D) Cannot be determined. 
A) $100,000. 
B) $50,000. 
C) $75,000. 
D) Cannot be determined.

Question 10

LIFO provides an up-to-date ending inventory on the balance sheet because it uses the latest purchases to calculate ending inventory.

Accepted Answer

A) True 
 B)False

Question 11

Hard Candy has a beginning inventory of $2,000.June purchases were $6,000,and retail sales were $3,000.The store has a normal gross profit of 50%.What is the June 30 estimated ending inventory at cost under the gross profit method?

Accepted Answer

A) $6,100 
B) $6,500 
C) $6,700 
D) $6,000 
A) $6,100 
B) $6,500 
C) $6,700 
D) $6,000

Question 12

Which of the following goods should Nassen Company include in its December 31,201X,count?

Accepted Answer

A) Goods held on consignment for Acorn Supply 
B) Goods sold to Crishom,F.O.B.destination,and arrival date scheduled for January 5 
C) Goods that are not salable 
D) Goods in transit purchased F.O.B.destination 
A) Goods held on consignment for Acorn Supply 
B) Goods sold to Crishom,F.O.B.destination,and arrival date scheduled for January 5 
C) Goods that are not salable 
D) Goods in transit purchased F.O.B.destination

Question 13

Under a perpetual inventory system,inventory purchases are entered in the Merchandise Inventory account at cost.

Accepted Answer

A) True 
 B)False

Question 14

The weighted-average method:

Accepted Answer

A) calculates an average unit cost by dividing the total cost of goods sold by the total units sold. 
B) calculates an average unit cost by dividing the total cost of goods available for sale by the total units of goods available for sale. 
C) calculates an average unit cost by adding the total cost of goods available for sale to the total units of goods available for sale. 
D) None of these answers is correct. 
A) calculates an average unit cost by dividing the total cost of goods sold by the total units sold. 
B) calculates an average unit cost by dividing the total cost of goods available for sale by the total units of goods available for sale. 
C) calculates an average unit cost by adding the total cost of goods available for sale to the total units of goods available for sale. 
D) None of these answers is correct.

Question 15

This method assumes that the oldest goods are sold first.

Accepted Answer

A) LIFO 
B) FIFO 
C) Specific invoice method 
D) Weighted-average method 
A) LIFO 
B) FIFO 
C) Specific invoice method 
D) Weighted-average method

Question 16

Assume that in Year 1,the ending merchandise inventory is overstated by $30,000.If this is the only error in Year 1,fill in the items below,indicating which items will be understated(U),overstated(O),or correctly(C)stated for Year 1.
 $\begin{array}{ll}
\text { Ending merchandise inventory } & \text { Year 1 \_\_\_ } \
\text { Beginning merchand ise inventory } & \text { Year 1\_\_\_ } \
\text { Cost of goods sold } & \text { Year 1 \_\_\_ } \
\text { Gross profit } & \text { Year 1 \_\_\_ } \
\text { Net income } & \text { Year 1 \_\_\_ } \
\text { Ending owner's capital } & \text { Year 1 \_\_\_ }
\end{array}$

Accepted Answer

The answer of Assume that in Year 1,the ending merchandise...

Question 17

Sold merchandise on account.- Perpetual
Debit ________ & ________ Credit ________ & ________

Accepted Answer

Debit 2 &

Question 18

Purchased merchandise with cash;terms of 2/10,n/30.- Periodic
Debit ________ Credit ________

Accepted Answer

The answer of Purchased merchandise with cash;terms of 2/10,n/30.- Periodic
Debit...

Question 19

Returned merchandise inventory for cash - Periodic
Debit ________ Credit ________

Accepted Answer

The answer of Returned merchandise inventory for cash - Periodic
Debit...

Question 20

An entry to record the payment to a vendor was not recorded and posted to the general ledger but was posted to the subsidiary ledger.This error would cause:

Accepted Answer

A) the period end assets to be understated. 
B) the period end liabilities to be understated. 
C) the Accounts Payable will be larger than the subsidiary ledger. 
D) the Accounts Payable will be less than the subsidiary ledger. 
A) the period end assets to be understated. 
B) the period end liabilities to be understated. 
C) the Accounts Payable will be larger than the subsidiary ledger. 
D) the Accounts Payable will be less than the subsidiary ledger.

Exam 15: Accounting for Merchandise Inventory

Which of the following accounts is used with a periodic inventory system?

Nicki's Pet Supply needs to estimate its ending inventory.Using the data below,compute Nicki's estimated cost of ending inventory for the month of April. Beginuning inventory April 1 \ 6,000 Purchases for April 10,000 Retail sales during April 15,000 Normal gross profit average 30%

The inventory method that assumes the recent goods are sold first is:

To use the gross profit method to estimate inventory,you need to know the goods available for sale at retail.

Under the ________ inventory system,cost of goods sold and the amount of merchandise inventory on hand are updated at the end of the accounting period.

Hawkeye Tack uses a periodic inventory system.Hawkeye Tack sold 80 sweaters during September.Other data for September includes: Sep. 1 Balance 40@\ 24 8 Purchased 12@\ 29 17 Purchased 25@\ 35 25 Purchased 35@\ 30 Cost of goods sold under the FIFO method is:

In a perpetual inventory system,the Merchandise Inventory account is updated:

The ending inventory for this year is overstated.This error would cause:

A business has sales of $125,000 and a normal gross profit of 40%.The estimated cost of goods sold is:

LIFO provides an up-to-date ending inventory on the balance sheet because it uses the latest purchases to calculate ending inventory.

Hard Candy has a beginning inventory of $2,000.June purchases were $6,000,and retail sales were $3,000.The store has a normal gross profit of 50%.What is the June 30 estimated ending inventory at cost under the gross profit method?

Which of the following goods should Nassen Company include in its December 31,201X,count?

Under a perpetual inventory system,inventory purchases are entered in the Merchandise Inventory account at cost.

The weighted-average method:

This method assumes that the oldest goods are sold first.

Sold merchandise on account.- Perpetual Debit ________ & ________ Credit ________ & ________

Purchased merchandise with cash;terms of 2/10,n/30.- Periodic Debit ________ Credit ________

Returned merchandise inventory for cash - Periodic Debit ________ Credit ________

An entry to record the payment to a vendor was not recorded and posted to the general ledger but was posted to the subsidiary ledger.This error would cause:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Sold merchandise on account.- Perpetual Debit & Credit &

Purchased merchandise with cash;terms of 2/10,n/30.- Periodic Debit Credit

Returned merchandise inventory for cash - Periodic Debit Credit