Question 1 of 40 Score: 2.5 (of possible 2.5 points)
Michelin Jewelers completed the following transactions. Michelin Jewelers uses the
perpetual inventory system. On April 2, Michelin sold $9,000 of merchandise to a
customer on account with terms of 3/15, n/30. Michelin’s cost of the merchandise sold
was $5,500. On April 4, the customer reported damaged goods and Michelin granted a
$1,000 sales allowance. On April 10, Michelin received payment from the customer. If
this were the only transaction for the period, what amount would be shown on the
income statement for Gross profit?
A. $2,260
B. $3,500
C. $3,260
D. $3,230
Answer Key: A
Question 2 of 40 Score: 0 (of possible 2.5 points)
A company that uses the perpetual inventory method purchased inventory for $2,000
from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company
paid the shipper $100 cash for freight in. The company then returned $200 of damaged
goods and got an allowance from the vendor. The company paid the vendor 8 days after
the sale. Assuming this was the only transaction affecting inventory, and that there was
no beginning balance, what would the cost basis of the inventory be?
A. $1,764
B. $1,864
C. $2,100
D. $1,900
Answer Key: B
Question 3 of 40 Score: 2.5 (of possible 2.5 points)
,One hundred units of inventory on hand at the end of the year are recorded at their cost
of $10 each using LIFO. Current replacement cost is $8.00. What amount would be
reported as Inventory on the balance sheet?
A. $1,000.00
B. $10.00
C. $800.00
D. $8.00
Answer Key: C
Question 4 of 40 Score: 0 (of possible 2.5 points)
Prepaid rent in the worksheet's trial balance column is $4,000. Prepaid rent in the
balance sheet column is $2,000. Which of the following entries
would have caused this difference?
A. A $2,000 debit entry to Prepaid rent in the worksheet's adjustments column
B. A $2,000 credit entry to Rent expense in the worksheet's adjustments column
C. A $2,000 credit entry to Prepaid rent in the worksheet's adjustments column
D. A $2,000 debit entry to Cash in the worksheet’s adjustments column
Answer Key: C
Question 5 of 40 Score: 0 (of possible 2.5 points)
Williams Company had the following balances and transactions during 2013.
What would the company's inventory amount be on the December 31, 2013 balance
sheet if the perpetual average-costing method is used? (Answers are rounded to the
nearest dollar.) Please note replacement cost is the same as market value and must be
used in this problem if applicable.
, A. $1,200
B. $1,150
C. $1,050
D. $ 900
Answer Key: B
Question 6 of 40 Score: 0 (of possible 2.5 points)
A company purchased 100 units for $20 each on January 31. It purchased 100 units for
$30 on February 28. It sold 150 units for $45 each from March 1 through December 31.
If the company uses the Last-In, First-Out inventory costing method, what is the amount
of ending inventory on December 31?
A. $1,500
B. $1,250
C. $1,000
D. $2,250
Answer Key: C
Question 7 of 40 Score: 0 (of possible 2.5 points)
The following is the adjusted trial balance for Tuttle Photography.
After the closing entries, what will the final balance in Capital be?
A. $207,200
B. $184,200
Michelin Jewelers completed the following transactions. Michelin Jewelers uses the
perpetual inventory system. On April 2, Michelin sold $9,000 of merchandise to a
customer on account with terms of 3/15, n/30. Michelin’s cost of the merchandise sold
was $5,500. On April 4, the customer reported damaged goods and Michelin granted a
$1,000 sales allowance. On April 10, Michelin received payment from the customer. If
this were the only transaction for the period, what amount would be shown on the
income statement for Gross profit?
A. $2,260
B. $3,500
C. $3,260
D. $3,230
Answer Key: A
Question 2 of 40 Score: 0 (of possible 2.5 points)
A company that uses the perpetual inventory method purchased inventory for $2,000
from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company
paid the shipper $100 cash for freight in. The company then returned $200 of damaged
goods and got an allowance from the vendor. The company paid the vendor 8 days after
the sale. Assuming this was the only transaction affecting inventory, and that there was
no beginning balance, what would the cost basis of the inventory be?
A. $1,764
B. $1,864
C. $2,100
D. $1,900
Answer Key: B
Question 3 of 40 Score: 2.5 (of possible 2.5 points)
,One hundred units of inventory on hand at the end of the year are recorded at their cost
of $10 each using LIFO. Current replacement cost is $8.00. What amount would be
reported as Inventory on the balance sheet?
A. $1,000.00
B. $10.00
C. $800.00
D. $8.00
Answer Key: C
Question 4 of 40 Score: 0 (of possible 2.5 points)
Prepaid rent in the worksheet's trial balance column is $4,000. Prepaid rent in the
balance sheet column is $2,000. Which of the following entries
would have caused this difference?
A. A $2,000 debit entry to Prepaid rent in the worksheet's adjustments column
B. A $2,000 credit entry to Rent expense in the worksheet's adjustments column
C. A $2,000 credit entry to Prepaid rent in the worksheet's adjustments column
D. A $2,000 debit entry to Cash in the worksheet’s adjustments column
Answer Key: C
Question 5 of 40 Score: 0 (of possible 2.5 points)
Williams Company had the following balances and transactions during 2013.
What would the company's inventory amount be on the December 31, 2013 balance
sheet if the perpetual average-costing method is used? (Answers are rounded to the
nearest dollar.) Please note replacement cost is the same as market value and must be
used in this problem if applicable.
, A. $1,200
B. $1,150
C. $1,050
D. $ 900
Answer Key: B
Question 6 of 40 Score: 0 (of possible 2.5 points)
A company purchased 100 units for $20 each on January 31. It purchased 100 units for
$30 on February 28. It sold 150 units for $45 each from March 1 through December 31.
If the company uses the Last-In, First-Out inventory costing method, what is the amount
of ending inventory on December 31?
A. $1,500
B. $1,250
C. $1,000
D. $2,250
Answer Key: C
Question 7 of 40 Score: 0 (of possible 2.5 points)
The following is the adjusted trial balance for Tuttle Photography.
After the closing entries, what will the final balance in Capital be?
A. $207,200
B. $184,200
