ACCT 201A Exam #2 QUESTIONS &
ANSWERS(RATED A+)
Freight costs incurred by the seller on outgoing merchandise are an operating
expense to the seller.
-True or False - ANSWERTrue
For a jewelry retailer, which is an example of Other Revenues and Gains?
-Gain on sale of display cases
-Discount received for paying for merchandise inventory within the discount period
-Unearned revenue
-Repair revenue - ANSWERGain on sale of display cases
The operating cycle of a merchandising company is ordinarily shorter than that of a
service company.
-True or False - ANSWERFalse
Which one of the following statements is correct?
-A company which uses a perpetual inventory system needs only one journal entry
when it sells merchandise.
-A company which uses a perpetual inventory system needs two journal entries
when it sells merchandise.
-A company which uses a perpetual inventory system debits inventory and credits
cost of goods sold when it sells merchandise.
-None of the answer choices are correct. - ANSWERA company which uses a
perpetual inventory system needs two journal entries when it sells merchandise.
Assume that sales revenue are $450,000, sales discounts are $10,000, net income
is $35,000, and cost of goods sold is $320,000. How much are gross profit and
operating expenses, respectively?
-$120,000 and $85,000
-$130,000 and $95,000
-$130,000 and $85,000
-$120,000 and $95,000 - ANSWER$120,000 and $85,000
, Arbor Corporation had reported the following amounts at December 31, 2014: Sales
revenue $184,000: ending inventory $11,600: beginning inventory $17,200:
purchases $60,400: purchases discounts $3,000: purchase returns and allowances
$1,100: freight-in $600: freight-out $900. Calculate the cost of goods available for
sale.
-$56,900
-$197,700
-$69,400
-$74,100 - ANSWER$74,100
Under what system is cost of goods sold determined at the end of an accounting
period?
-Periodic inventory system
-Double entry inventory system
-Perpetual inventory system
-Single entry inventory system - ANSWERPeriodic inventory system
Net income is $15,000, operating expenses are $20,000, net sales total $75,000,
and sales revenues total $95,000. How much is the profit margin?
-20%
-79%
-75%
-16% - ANSWER20%
A physical count of merchandise inventory on June 30 reveals that there are 200
units on hand. Using the FIFO inventory method, the amount allocated to ending
inventory (rounded to whole dollar) for June is
-$1744.
-$1760.
-$1387.
-$1421. - ANSWER$1744
A company purchased inventory as follows:
▪ 160 units at $4.80
▪ 240 units at $5.30
The average unit cost for inventory is
-$4.80.
-$5.30.
-$5.10.
-$5.05. - ANSWER$5.10
Goods in transit shipped FOB shipping point should be included in the buyer's
ending inventory.
-True
-False - ANSWERTrue
ANSWERS(RATED A+)
Freight costs incurred by the seller on outgoing merchandise are an operating
expense to the seller.
-True or False - ANSWERTrue
For a jewelry retailer, which is an example of Other Revenues and Gains?
-Gain on sale of display cases
-Discount received for paying for merchandise inventory within the discount period
-Unearned revenue
-Repair revenue - ANSWERGain on sale of display cases
The operating cycle of a merchandising company is ordinarily shorter than that of a
service company.
-True or False - ANSWERFalse
Which one of the following statements is correct?
-A company which uses a perpetual inventory system needs only one journal entry
when it sells merchandise.
-A company which uses a perpetual inventory system needs two journal entries
when it sells merchandise.
-A company which uses a perpetual inventory system debits inventory and credits
cost of goods sold when it sells merchandise.
-None of the answer choices are correct. - ANSWERA company which uses a
perpetual inventory system needs two journal entries when it sells merchandise.
Assume that sales revenue are $450,000, sales discounts are $10,000, net income
is $35,000, and cost of goods sold is $320,000. How much are gross profit and
operating expenses, respectively?
-$120,000 and $85,000
-$130,000 and $95,000
-$130,000 and $85,000
-$120,000 and $95,000 - ANSWER$120,000 and $85,000
, Arbor Corporation had reported the following amounts at December 31, 2014: Sales
revenue $184,000: ending inventory $11,600: beginning inventory $17,200:
purchases $60,400: purchases discounts $3,000: purchase returns and allowances
$1,100: freight-in $600: freight-out $900. Calculate the cost of goods available for
sale.
-$56,900
-$197,700
-$69,400
-$74,100 - ANSWER$74,100
Under what system is cost of goods sold determined at the end of an accounting
period?
-Periodic inventory system
-Double entry inventory system
-Perpetual inventory system
-Single entry inventory system - ANSWERPeriodic inventory system
Net income is $15,000, operating expenses are $20,000, net sales total $75,000,
and sales revenues total $95,000. How much is the profit margin?
-20%
-79%
-75%
-16% - ANSWER20%
A physical count of merchandise inventory on June 30 reveals that there are 200
units on hand. Using the FIFO inventory method, the amount allocated to ending
inventory (rounded to whole dollar) for June is
-$1744.
-$1760.
-$1387.
-$1421. - ANSWER$1744
A company purchased inventory as follows:
▪ 160 units at $4.80
▪ 240 units at $5.30
The average unit cost for inventory is
-$4.80.
-$5.30.
-$5.10.
-$5.05. - ANSWER$5.10
Goods in transit shipped FOB shipping point should be included in the buyer's
ending inventory.
-True
-False - ANSWERTrue
