Question 1

The journal entry to record a customer's return of an item for a cash refund would:

Accepted Answer

A) be the same under both the periodic and perpetual system. 
B) only include one entry under the perpetual system. 
C) include two entries under the perpetual system. 
D) include none of the above. 
A) be the same under both the periodic and perpetual system. 
B) only include one entry under the perpetual system. 
C) include two entries under the perpetual system. 
D) include none of the above.

Question 2

To use the gross profit method to estimate the value of the ending inventory,the company needs the following information:

Accepted Answer

A) average gross profit rate,net sales,ending inventory,and net purchases 
B) average gross profit rate,net sales,beginning inventory at cost,and net purchases at retail 
C) average gross profit rate,net sales,ending inventory at retail,and net purchases at retail 
D) average gross profit rate,net sales,beginning inventory at cost,and net purchases at cost 
A) average gross profit rate,net sales,ending inventory,and net purchases 
B) average gross profit rate,net sales,beginning inventory at cost,and net purchases at retail 
C) average gross profit rate,net sales,ending inventory at retail,and net purchases at retail 
D) average gross profit rate,net sales,beginning inventory at cost,and net purchases at cost

Question 3

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.
 $\begin{array}{llcc}
  \text {  Beginning inventory April 1} &\$2,000  \
 \text {  Purchases for April } &12,000\
 \text { Retail sales during April } &13,000\
\end{array}$
 $\begin{array}{llcc}
  \text { Normal gross profit average } &40\%  \
\end{array}$

Accepted Answer

@#IMG-DLM&_TB5851_00

Question 4

Under the perpetual inventory method,purchase returns are credited to ________.

Accepted Answer

merchandis

Question 5

The ________ holds the merchandise of another business to be sold.

Accepted Answer

The answer of The ________ holds the merchandise of another...

Question 6

Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year.Assume a periodic inventory system.
 $\begin{array} { l l l } 
\text { April } 1 \text { Beginning inventory } & 20 \text { units } \$ \$ 30 \
11 & \text { Purchases } & 70 \text { units } @ \$ 32 \
21 & \text { Purchases } & 50 \text { units } @ \$ 35
\end{array}$  Sales for April: 115 units
a)________ FIFO
b)________ LIFO
c)________ Weighted-average

Accepted Answer

a)FIFO (20 × $30)+ (70 × $32)+

Question 7

Barry's Books uses a periodic inventory system.Barry's Books sold 45 copies of Helpful Hints during September.Other data for September include: $\begin{array} { | r | l | l | } 
\hline \text { Sep. 1 } & \text { Balance } & 12 \text { books } @ \$ 20 \
\hline 8 & \text { Purchased } & 10 \text { books } @ \$ 21 \
\hline 17 & \text { Purrchased } & 30 \text { books } @ \$ 22 \
\hline 25 & \text { Purrchased } & 15 \text { books } @ \$ 24 \
\hline
\end{array}$ Cost of goods sold under the FIFO method is:

Accepted Answer

A) $956. 
B) $514. 
C) $1,020. 
D) some other number 
A) $956. 
B) $514. 
C) $1,020. 
D) some other number

Question 8

A method that uses average gross profit rate and net sales to compute inventory is:

Accepted Answer

A) the retail method. 
B) the LIFO. 
C) the weighted-average method. 
D) None of these answers are correct. 
A) the retail method. 
B) the LIFO. 
C) the weighted-average method. 
D) None of these answers are correct.

Question 9

The retail method is used by many merchandising businesses to estimate the amount of inventory.

Accepted Answer

A) True 
 B)False

Question 10

The ending inventory for this year is understated.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 overstated. 
D) None of these are 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 overstated. 
D) None of these are correct.

Question 11

The ________ system of accounting for inventory provides information on a transaction-by-transaction basis.

Accepted Answer

The answer of The ________ system of accounting for inventory...

Question 12

Given the following accounts:
[1]	Cash
[2]	Accounts receivable
[3]	Merchandise inventory
[4]	Supplies
[5]	Accounts payable
[6]	Sales
[7]	Sales returns and allowances
[8]	Sales discounts
[9]	Cost of goods sold
[10]	Purchases
[11]	Purchase returns and allowances
[12]	Purchase discounts
[13]	Freight-in
Indicate the account(s) to be debited and credited to record the following transactions.
-Paid for merchandise after the discount period expired.- Perpetual
Debit ________ & ________ Credit ________ & ________

Accepted Answer

The answer of Given the following accounts:
[1]	Cash
[2]	Accounts receivable
[3]	Merchandise inventory
[4]	Supplies
[5]	Accounts payable
[6]	Sales
[7]	Sales...

Question 13

Goods that are consigned to another party:

Accepted Answer

A) belong to the other party because title has passed. 
B) belong to the company that has consigned them. 
C) belong to the consignor. 
D) Both B and C are correct. 
A) belong to the other party because title has passed. 
B) belong to the company that has consigned them. 
C) belong to the consignor. 
D) Both B and C are correct.

Question 14

Only periodic systems must take a physical inventory at year-end.

Accepted Answer

A) True 
 B)False

Question 15

Under the average-cost method,costs are matched with individual sale items.

Accepted Answer

A) True 
 B)False

Question 16

A company should use the specific invoice method to value items such as automobiles for retail sale.

Accepted Answer

A) True 
 B)False

Question 17

Prepare journal entries for the following transactions for Jane's Violin Shop applying the perpetual inventory system.Omit explanations.
 $\begin{array}{llcc}
 \text { Mar: } & \text { 12 Purchased on account 2 boxes of bows for $ \$ 120 $  } &  \
 &\text { 16 Returned 1 bow for $ \$ 10 $ credit. } &\
& \text { 22 Sold 3 bows for $ \$ 150 $, cost $ \$ 50 $. } &\
& \text {29 Paid the balance diue on account  } &\
\end{array}$

Accepted Answer

The answer of Prepare journal entries for the following transactions...

Question 18

Which is not a good reason to use the specific invoice method?

Accepted Answer

A) The flow of goods and flow of cost are the same. 
B) It can be used with goods with large sales volume. 
C) It is simple to use if there is a small amount of high-cost unique goods. 
D) Costs are matched with the sales they helped to produce. 
A) The flow of goods and flow of cost are the same. 
B) It can be used with goods with large sales volume. 
C) It is simple to use if there is a small amount of high-cost unique goods. 
D) Costs are matched with the sales they helped to produce.

Question 19

A business uses the retail inventory method to estimate the value of the ending inventory.For the month of May,the cost of goods available for sale is $15,625 at cost and $21,550 at retail.The cost ratio is:

Accepted Answer

A) 72.5%. 
B) 27.5%. 
C) 37.9%. 
D) None of these are correct. 
A) 72.5%. 
B) 27.5%. 
C) 37.9%. 
D) None of these are correct.

Question 20

The inventory method that assumes the oldest 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.

Exam 15: Accounting for Merchandise Inventory

The journal entry to record a customer's return of an item for a cash refund would:

To use the gross profit method to estimate the value of the ending inventory,the company needs the following information:

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. Beginning inventory April 1 \2 ,000 Purchases for April 12,000 Retail sales during April 13,000 Normal gross profit average 40\%

Under the perpetual inventory method,purchase returns are credited to ________.

The ________ holds the merchandise of another business to be sold.

A method that uses average gross profit rate and net sales to compute inventory is:

The retail method is used by many merchandising businesses to estimate the amount of inventory.

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

The ________ system of accounting for inventory provides information on a transaction-by-transaction basis.

Goods that are consigned to another party:

Only periodic systems must take a physical inventory at year-end.

Under the average-cost method,costs are matched with individual sale items.

A company should use the specific invoice method to value items such as automobiles for retail sale.

Which is not a good reason to use the specific invoice method?

A business uses the retail inventory method to estimate the value of the ending inventory.For the month of May,the cost of goods available for sale is $15,625 at cost and $21,550 at retail.The cost ratio is:

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

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: The Conclusion of the Payroll Process

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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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