INTRODUCTION TO FINANCIAL ACCOUNTING EXAM 2
LATEST ACTUAL WITH VERIFIED QUESTIONS &
CORRECT ANSWERS
Question 1.
merchandise inventory
ANSWER
goods purchased for resale to customers in the normal course of merchandising operations
Question 2.
wholesalers
ANSWER
businesses that buy goods from manufacturers and resell them to retailers
Question 3.
retailers
ANSWER
businesses that buy goods from manufacturers or wholesalers and resell them to the general
public
Question 4.
periodic inventory system
ANSWER
inventory system which does not keep a continuous record of inventory on hand; a physical
count is taken at the end of the period to determine cost of goods sold and ending inventory
Question 5.
perpetual inventory system
ANSWER
inventory system which keeps a continuous record of inventory on hand and the cost of goods
sold
,Question 6.
subsidiary ledger
ANSWER
accounting record that contains details such as list of customers and accounts receivable due
from each or a list of suppliers and accounts payable due to each
Question 7.
purchase returns and allowances
ANSWER
reduction in the amount owed for a purchase due to returning merchandise or accepting
unsatisfactory goods
Question 8.
sales invoice
ANSWER
a bill that documents the sale of goods to a customer
Question 9.
credit terms
ANSWER
payment terms for customers who buy on account
Question 10.
n/30
ANSWER
credit term specifying that payment for a purchase is due within 30 days after the date of that
invoice
Question 11.
n/eom
ANSWER
credit term specifying that payment for a purchase is due by the end of the month
, Question 12.
purchase discount
ANSWER
discount received on purchases by paying early within a discount period
Question 13.
discount period
ANSWER
period in which the customer can make an early payment for a purchase and receive a
discount on that purchase
Question 14.
sales revenue
ANSWER
amount that a business earns from selling its inventory
Question 15.
cost of goods sold
ANSWER
cost of inventory that the business has sold to its customers
Question 16.
compound journal entry
ANSWER
a journal entry affecting more than two accounts
Question 17.
sales return and allowances
ANSWER
a reduction in the amount of sales due to customers returning merchandise or accepting
unsatisfactory goods
LATEST ACTUAL WITH VERIFIED QUESTIONS &
CORRECT ANSWERS
Question 1.
merchandise inventory
ANSWER
goods purchased for resale to customers in the normal course of merchandising operations
Question 2.
wholesalers
ANSWER
businesses that buy goods from manufacturers and resell them to retailers
Question 3.
retailers
ANSWER
businesses that buy goods from manufacturers or wholesalers and resell them to the general
public
Question 4.
periodic inventory system
ANSWER
inventory system which does not keep a continuous record of inventory on hand; a physical
count is taken at the end of the period to determine cost of goods sold and ending inventory
Question 5.
perpetual inventory system
ANSWER
inventory system which keeps a continuous record of inventory on hand and the cost of goods
sold
,Question 6.
subsidiary ledger
ANSWER
accounting record that contains details such as list of customers and accounts receivable due
from each or a list of suppliers and accounts payable due to each
Question 7.
purchase returns and allowances
ANSWER
reduction in the amount owed for a purchase due to returning merchandise or accepting
unsatisfactory goods
Question 8.
sales invoice
ANSWER
a bill that documents the sale of goods to a customer
Question 9.
credit terms
ANSWER
payment terms for customers who buy on account
Question 10.
n/30
ANSWER
credit term specifying that payment for a purchase is due within 30 days after the date of that
invoice
Question 11.
n/eom
ANSWER
credit term specifying that payment for a purchase is due by the end of the month
, Question 12.
purchase discount
ANSWER
discount received on purchases by paying early within a discount period
Question 13.
discount period
ANSWER
period in which the customer can make an early payment for a purchase and receive a
discount on that purchase
Question 14.
sales revenue
ANSWER
amount that a business earns from selling its inventory
Question 15.
cost of goods sold
ANSWER
cost of inventory that the business has sold to its customers
Question 16.
compound journal entry
ANSWER
a journal entry affecting more than two accounts
Question 17.
sales return and allowances
ANSWER
a reduction in the amount of sales due to customers returning merchandise or accepting
unsatisfactory goods
