ACC 231 exam #2 Question and
answers correctly solved 2025/2026
Merchandise inventory - correct answer ✔Goods purchased for resale to customers.
Periodic Inventory System - correct answer ✔Businesses does not keep a continuous record of
inventory on hand. A physical count will be taken at the end of the period to determine the cost of the
ending balance and the cost of goods sold.
What is the formula to calculate the available goods for sale? - correct answer ✔BEGINNING BALANCE
+ PURCHASES
What is the formula to calculate the cost of goods sold? - correct answer ✔BEGINNING BALANCE +
PURCHASES - ENDING BALANCE
Perpetual inventory system - correct answer ✔Keeps a continuous record of inventory on hand and
cost of goods sold.
Subsidiary ledger - correct answer ✔An accounting record that contains details such as a list of
customers who has A/R or A/P.
Sale invoice - correct answer ✔A bill that documents the sale of goods to customers.
What are the business transactions with customers? - correct answer ✔Cash sales, credit sales, sale
return/allowances, and discount sales.
What is the formula to calculate net income? - correct answer ✔Sales revenue - cost of goods sold.
, Whenever a product is sold, what does the merchandiser recognize? - correct answer ✔1. Sales
revenue of the selling price of product sold to customer
2. Cost of goods sold of merchandisers cost of product
Sales return is a contra-account to what account and what kind of normal balance does it have? - correct
answer ✔It's a contra-account to sales revenue. It has a normal balance of debit.
Credit memorandum - correct answer ✔A document that supports the return of goods from customers
or allowances of unsatisfactory goods or the adjustment of customer's account balance.
Sales discount have a normal balance of what? And which account will it close with? - correct answer
✔It has a normal balance of debit and will be closed with expense.
When does a merchandiser usually pay the costs? - correct answer ✔1. When receiving goods from
suppliers
2. When delivering goods to customers
3. Advertising and other selling costs.
Title - correct answer ✔A legally recognized possession or ownership of property.
Free on board shipping point - correct answer ✔Aka FOB; the title transfers to the buyer once the
goods are shipped at the seller's place of business thus, the buyer pays for the shipping.
Free on board destination - correct answer ✔Title transfers to buyer when the goods are received at
the buyer's destination. Seller pays for shipping.
Selling expense - correct answer ✔Expense related to advertising or selling of products such as sale
salary, sale commissions, depreciation on items used for sales, and delivery expense.
answers correctly solved 2025/2026
Merchandise inventory - correct answer ✔Goods purchased for resale to customers.
Periodic Inventory System - correct answer ✔Businesses does not keep a continuous record of
inventory on hand. A physical count will be taken at the end of the period to determine the cost of the
ending balance and the cost of goods sold.
What is the formula to calculate the available goods for sale? - correct answer ✔BEGINNING BALANCE
+ PURCHASES
What is the formula to calculate the cost of goods sold? - correct answer ✔BEGINNING BALANCE +
PURCHASES - ENDING BALANCE
Perpetual inventory system - correct answer ✔Keeps a continuous record of inventory on hand and
cost of goods sold.
Subsidiary ledger - correct answer ✔An accounting record that contains details such as a list of
customers who has A/R or A/P.
Sale invoice - correct answer ✔A bill that documents the sale of goods to customers.
What are the business transactions with customers? - correct answer ✔Cash sales, credit sales, sale
return/allowances, and discount sales.
What is the formula to calculate net income? - correct answer ✔Sales revenue - cost of goods sold.
, Whenever a product is sold, what does the merchandiser recognize? - correct answer ✔1. Sales
revenue of the selling price of product sold to customer
2. Cost of goods sold of merchandisers cost of product
Sales return is a contra-account to what account and what kind of normal balance does it have? - correct
answer ✔It's a contra-account to sales revenue. It has a normal balance of debit.
Credit memorandum - correct answer ✔A document that supports the return of goods from customers
or allowances of unsatisfactory goods or the adjustment of customer's account balance.
Sales discount have a normal balance of what? And which account will it close with? - correct answer
✔It has a normal balance of debit and will be closed with expense.
When does a merchandiser usually pay the costs? - correct answer ✔1. When receiving goods from
suppliers
2. When delivering goods to customers
3. Advertising and other selling costs.
Title - correct answer ✔A legally recognized possession or ownership of property.
Free on board shipping point - correct answer ✔Aka FOB; the title transfers to the buyer once the
goods are shipped at the seller's place of business thus, the buyer pays for the shipping.
Free on board destination - correct answer ✔Title transfers to buyer when the goods are received at
the buyer's destination. Seller pays for shipping.
Selling expense - correct answer ✔Expense related to advertising or selling of products such as sale
salary, sale commissions, depreciation on items used for sales, and delivery expense.
