ACC 200 Exam 2 Questions And Answers With Real
Solutions
What type of asset is equipment? ANS Plant, Property, and Equipment
What is stockholders' equity? ANS Common stock + Retained Earnings
Equation for Net Sales ANS Sales - Discounts - Returns = Net Sales
Equation for Gross Profit ANS Net Sales - Cost of Goods Sold = Gross Profit
What are some issues with high inventory levels? ANS Storage and other costs, obsolete goods
What are some issues with low inventory levels? ANS Lost sales
If the value of inventory is lower than its cost what do you do? ANS Write down inventory to market
value
How often does the perpetual system update inventory and cost of goods sold? ANS With every
purchase and sale
How often does the periodic system update inventory and the cost of goods sold? ANS At the end of
the account period
What is the adjusting journal entry for a buyer who pays within the discount time? (Bought 1000, terms
2/10, n/30, returned 200) ANS Dr. Accounts Payable amount owed (800)
Cr. Cash amount paid (784) Cr. Inventory discount amount (16)
What is the adjusting journal entry for a seller who sold inventory (1000) on a discount (terms 2/10, n/30)
with a cost of goods sold (300)? ANS Dr. Accounts Receivable amount sold (1000)
Cr. Sales (1000)
Solutions
What type of asset is equipment? ANS Plant, Property, and Equipment
What is stockholders' equity? ANS Common stock + Retained Earnings
Equation for Net Sales ANS Sales - Discounts - Returns = Net Sales
Equation for Gross Profit ANS Net Sales - Cost of Goods Sold = Gross Profit
What are some issues with high inventory levels? ANS Storage and other costs, obsolete goods
What are some issues with low inventory levels? ANS Lost sales
If the value of inventory is lower than its cost what do you do? ANS Write down inventory to market
value
How often does the perpetual system update inventory and cost of goods sold? ANS With every
purchase and sale
How often does the periodic system update inventory and the cost of goods sold? ANS At the end of
the account period
What is the adjusting journal entry for a buyer who pays within the discount time? (Bought 1000, terms
2/10, n/30, returned 200) ANS Dr. Accounts Payable amount owed (800)
Cr. Cash amount paid (784) Cr. Inventory discount amount (16)
What is the adjusting journal entry for a seller who sold inventory (1000) on a discount (terms 2/10, n/30)
with a cost of goods sold (300)? ANS Dr. Accounts Receivable amount sold (1000)
Cr. Sales (1000)
