Accounting Exam 2 Actual Exam
Questions And Correct Answers.
An item of merchandise that was sold for $600 cash by a business using the perpetual inventory system.
The item cost $400. After the sale entry has been recorded, what additional entry would be required?
A) a debit to sales and credit to inventory for $600
B) a debit to inventory and a credit to cost of goods sold for $400
C) A debit to cost of goods sold and a credit to purchases for $400
D) A debit to cost of goods sold and a credit to inventory for $400 - Answer D) A debit to Cost of Goods
Sold and a credit to Inventory for $400
What is NOT affected by the choice of an inventory costing method (that is, between FIFO, LIFO, and
weighted average)?
A) cost of goods sold
B) net sales
C) gross profit
D) net income - Answer B) Net Sales
Mr Goeddee deposits $500 in his savings account at the end of every month for three years. The
account's annual interest rate is 6%. To determine the balance in the account after three years, he should
use:
A) i = 0.5%
B) n = 3.
C) C Table B.2, Future Value of 1
D) All of the above - Answer i = % 0.5
, When a firm writes off a bad debt under the allowance method of accounting for bad debts, what
occurs?
A) expenses will increase
B) total assets remain the same
C) both of the above
D) neither of the above - Answer B) Total assets remain the same
Given the following information for Potter Company, what are Net Sales?
Beginning Inventory 10,000
Gross Profit 60,000
Ending Inventory 9,000
Net Purchases 45,000
A) $ 46,000
B) $ 55,000
C) $ 106,000
D) $ 105,000 - Answer C) $ 106,000
Which of the following is true about Cost of Goods Sold?
A) it is a contra-asset on the balance sheet
B) it is an expense
C) it includes selling and administrative costs
D) it includes the cost of bad debts - Answer b. it is an expense
Which accounting principle may allow a company to report an amount NOT in accordance with GAAP?
Questions And Correct Answers.
An item of merchandise that was sold for $600 cash by a business using the perpetual inventory system.
The item cost $400. After the sale entry has been recorded, what additional entry would be required?
A) a debit to sales and credit to inventory for $600
B) a debit to inventory and a credit to cost of goods sold for $400
C) A debit to cost of goods sold and a credit to purchases for $400
D) A debit to cost of goods sold and a credit to inventory for $400 - Answer D) A debit to Cost of Goods
Sold and a credit to Inventory for $400
What is NOT affected by the choice of an inventory costing method (that is, between FIFO, LIFO, and
weighted average)?
A) cost of goods sold
B) net sales
C) gross profit
D) net income - Answer B) Net Sales
Mr Goeddee deposits $500 in his savings account at the end of every month for three years. The
account's annual interest rate is 6%. To determine the balance in the account after three years, he should
use:
A) i = 0.5%
B) n = 3.
C) C Table B.2, Future Value of 1
D) All of the above - Answer i = % 0.5
, When a firm writes off a bad debt under the allowance method of accounting for bad debts, what
occurs?
A) expenses will increase
B) total assets remain the same
C) both of the above
D) neither of the above - Answer B) Total assets remain the same
Given the following information for Potter Company, what are Net Sales?
Beginning Inventory 10,000
Gross Profit 60,000
Ending Inventory 9,000
Net Purchases 45,000
A) $ 46,000
B) $ 55,000
C) $ 106,000
D) $ 105,000 - Answer C) $ 106,000
Which of the following is true about Cost of Goods Sold?
A) it is a contra-asset on the balance sheet
B) it is an expense
C) it includes selling and administrative costs
D) it includes the cost of bad debts - Answer b. it is an expense
Which accounting principle may allow a company to report an amount NOT in accordance with GAAP?
