Question 1

Individual inventory items are tracked in the:

Accepted Answer

A)  accounts receivable ledger. 
B)  purchases journal 
C)  accounts payable ledger. 
D)  inventory ledger. 
A)  accounts receivable ledger. 
B)  purchases journal 
C)  accounts payable ledger. 
D)  inventory ledger. D

Question 2

The retail method is often used for interim financial reports.

Accepted Answer

A) True 
 B)False  True

Question 3

Under the perpetual inventory system, in addition to making the entry to record a return of goods from a customer, a company would:

Accepted Answer

A)  debit Merchandise Inventory and credit Cost of Goods Sold. 
B)  debit Cost of Goods Sold and credit Merchandise Inventory. 
C)  debit Sales and credit Cost of Goods Sold. 
D)  debit Purchases and credit Cost of Goods Sold. 
A)  debit Merchandise Inventory and credit Cost of Goods Sold. 
B)  debit Cost of Goods Sold and credit Merchandise Inventory. 
C)  debit Sales and credit Cost of Goods Sold. 
D)  debit Purchases and credit Cost of Goods Sold. A

Question 4

Mack Industries uses the periodic inventory system. What is the entry to record $250 of returned merchandise, with a cost of $100, from customer Jake Sanders?

Accepted Answer

A)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Merchandise Inventory for $100; credit Cost of Goods Sold for $100. 
B)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Purchases for $100; credit Purchase Returns & Allowances for $100. 
C)  Debit Sales Returns & Allowances for $250; credit Cash for $100; credit Sales for $150. 
D)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250. 
A)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Merchandise Inventory for $100; credit Cost of Goods Sold for $100. 
B)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Purchases for $100; credit Purchase Returns & Allowances for $100. 
C)  Debit Sales Returns & Allowances for $250; credit Cash for $100; credit Sales for $150. 
D)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250.

Question 5

Under the _________ inventory system, every sale has a corresponding cost entry.

Accepted Answer

The answer of Under the _________ inventory system, every sale...

Question 6

Indicate the account(s) to be debited and credited to record the following transactions.

-Sold merchandise in exchange for cash. - Perpetual
Debit ________ & ________ Credit ________ & ________

Accepted Answer

A)  Cash 
B)  Accounts receivable 
C)  Merchandise inventory 
D)  Supplies 
E)  Accounts payable
F) Sales
G) Sales returns and allowances
H) Sales discounts
I) Cost of goods sold
J) Purchases
K) Purchase returns and allowances
L)Purchase discounts
M) Freight-in 
A)  Cash 
B)  Accounts receivable 
C)  Merchandise inventory 
D)  Supplies 
E)  Accounts payable
F) Sales
G) Sales returns and allowances
H) Sales discounts
I) Cost of goods sold
J) Purchases
K) Purchase returns and allowances
L)Purchase discounts
M) Freight-in

Question 7

Merchandise Inventory is recorded on the:

Accepted Answer

A)  Balance Sheet. 
B)  Statement of owner's equity. 
C)  Income Statement. 
D)  None of these is correct. 
A)  Balance Sheet. 
B)  Statement of owner's equity. 
C)  Income Statement. 
D)  None of these is correct.

Question 8

Lois's Furniture uses a periodic inventory system. Lois sold 45 tables during August. Other data for August include:   Ending inventory under the LIFO method is:

Accepted Answer

A)  $6,440. 
B)  $5,550. 
C)  $2,590. 
D)  $1,700. 
A)  $6,440. 
B)  $5,550. 
C)  $2,590. 
D)  $1,700.

Question 9

The retail method is used by many manufacturing businesses to estimate the amount of sales.

Accepted Answer

A) True 
 B)False

Question 10

Under the perpetual system, when merchandise is sold, the journal entry would include a:

Accepted Answer

A)  debit to Merchandise Inventory; a credit to Accounts Payable or Cash. 
B)  debit to Cost of Goods Sold; a credit to Merchandise Inventory. 
C)  debit to Accounts Receivable or Cash and a credit to Sales. 
D)  Both B and C are correct. 
A)  debit to Merchandise Inventory; a credit to Accounts Payable or Cash. 
B)  debit to Cost of Goods Sold; a credit to Merchandise Inventory. 
C)  debit to Accounts Receivable or Cash and a credit to Sales. 
D)  Both B and C are correct.

Question 11

Mack Industries uses the perpetual inventory system. What is the entry to record $250 of returned merchandise, with a cost of $100, from customer Jake Sanders?

Accepted Answer

A)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250. 
B)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Purchases for $100; credit Purchase Returns & Allowances for $100. 
C)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Merchandise Inventory for $100; credit Cost of Goods Sold for $100. 
D)  Debit Sales Returns & Allowances for $250; credit Cash for $100, credit Sales for $150. 
A)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250. 
B)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Purchases for $100; credit Purchase Returns & Allowances for $100. 
C)  Debit Sales Returns & Allowances for $250; credit Accounts Receivable for $250; debit Merchandise Inventory for $100; credit Cost of Goods Sold for $100. 
D)  Debit Sales Returns & Allowances for $250; credit Cash for $100, credit Sales for $150.

Question 12

Mack Industries uses the perpetual inventory system. What is the entry to record a $300 sale on account to customer Jake Sanders, with a $100 cost of sale?

Accepted Answer

A)  Debit Accounts Receivable for $300; credit Sales for $300; debit Cost of Goods Sold for $100; credit Merchandise Inventory for $100. 
B)  Debit Accounts Receivable for $300; credit Sales for $100; debit Cost of Goods Sold for $300; credit Merchandise Inventory for $100. 
C)  Debit Accounts Receivable for $300; credit Sales for $300. 
D)  Debit Sales for $300; credit Accounts Receivable for $300. 
A)  Debit Accounts Receivable for $300; credit Sales for $300; debit Cost of Goods Sold for $100; credit Merchandise Inventory for $100. 
B)  Debit Accounts Receivable for $300; credit Sales for $100; debit Cost of Goods Sold for $300; credit Merchandise Inventory for $100. 
C)  Debit Accounts Receivable for $300; credit Sales for $300. 
D)  Debit Sales for $300; credit Accounts Receivable for $300.

Question 13

In a perpetual inventory system, Merchandise Inventory is credited when recording the cost of a sale.

Accepted Answer

A) True 
 B)False

Question 14

Shayla's Design uses a periodic inventory system. Shayla sold 33 artist kits during January. Other data for January include:   Cost of Goods Sold under the LIFO method is:

Accepted Answer

A)  $1,278. 
B)  $1,044. 
C)  $1,000. 
D)  $766. 
A)  $1,278. 
B)  $1,044. 
C)  $1,000. 
D)  $766.

Question 15

A purchases journal may be used to track inventory.

Accepted Answer

A) True 
 B)False

Question 16

A credit customer purchased $800 worth of items. Four days later, the customer returned $100 worth of those items. The entry to record this under the perpetual inventory method would include:

Accepted Answer

A)  a debit to Sales Returns and Allowances $100. 
B)  a credit to Merchandise Inventory at cost. 
C)  a debit to Cost of Goods Sold at cost. 
D)  a credit to Sales Returns and Allowances $100. 
A)  a debit to Sales Returns and Allowances $100. 
B)  a credit to Merchandise Inventory at cost. 
C)  a debit to Cost of Goods Sold at cost. 
D)  a credit to Sales Returns and Allowances $100.

Question 17

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 18

Barry's Books uses a periodic inventory system. Barry's Books sold 40 copies of Helpful Hints during September. Other data for September include:   Cost of goods sold under the FIFO method is:

Accepted Answer

A)  $720. 
B)  $975. 
C)  $1,575. 
D)  some other number. 
A)  $720. 
B)  $975. 
C)  $1,575. 
D)  some other number.

Question 19

The _________ method assumes the goods purchased first are sold first.

Accepted Answer

The answer of The _________ method assumes the goods purchased...

Question 20

The gross profit method is used to determine the value of beginning inventory using a predetermined gross profit rate.

Accepted Answer

A) True 
 B)False

Exam 15: Accounting for Merchandise Inventory

Individual inventory items are tracked in the:

The retail method is often used for interim financial reports.

Under the perpetual inventory system, in addition to making the entry to record a return of goods from a customer, a company would:

Mack Industries uses the periodic inventory system. What is the entry to record $250 of returned merchandise, with a cost of $100, from customer Jake Sanders?

Under the _________ inventory system, every sale has a corresponding cost entry.

Indicate the account(s) to be debited and credited to record the following transactions. -Sold merchandise in exchange for cash. - Perpetual Debit ________ & ________ Credit ________ & ________

Merchandise Inventory is recorded on the:

Lois's Furniture uses a periodic inventory system. Lois sold 45 tables during August. Other data for August include: Ending inventory under the LIFO method is:

The retail method is used by many manufacturing businesses to estimate the amount of sales.

Under the perpetual system, when merchandise is sold, the journal entry would include a:

Mack Industries uses the perpetual inventory system. What is the entry to record $250 of returned merchandise, with a cost of $100, from customer Jake Sanders?

Mack Industries uses the perpetual inventory system. What is the entry to record a $300 sale on account to customer Jake Sanders, with a $100 cost of sale?

In a perpetual inventory system, Merchandise Inventory is credited when recording the cost of a sale.

Shayla's Design uses a periodic inventory system. Shayla sold 33 artist kits during January. Other data for January include: Cost of Goods Sold under the LIFO method is:

A purchases journal may be used to track inventory.

A credit customer purchased $800 worth of items. Four days later, the customer returned $100 worth of those items. The entry to record this under the perpetual inventory method would include:

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

Barry's Books uses a periodic inventory system. Barry's Books sold 40 copies of Helpful Hints during September. Other data for September include: Cost of goods sold under the FIFO method is:

The _________ method assumes the goods purchased first are sold first.

The gross profit method is used to determine the value of beginning inventory using a predetermined gross profit rate.

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

Indicate the account(s) to be debited and credited to record the following transactions. -Sold merchandise in exchange for cash. - Perpetual Debit & Credit &