ACCT 201A Midterm 2 Review
QUESTIONS & ANSWERS(GRADED A+)
3. If a purchaser using a periodic inventory system pays the transportation costs,
then the
a. Merchandise Inventory account is increased.
b. Merchandise Inventory account is not affected.
c. Freight-in account is increased.
d. Delivery Expense account is increased. - ANSWERc. Freight-in account is
increased.
4. Freight costs incurred by a seller on merchandise sold to customers will cause an
increase
a. in the selling expenses of the buyer.
b. in operating expenses for the seller.
c. to the cost of goods sold of the seller.
d. to a contra-revenue account of the seller. - ANSWERb. in operating expenses for
the seller.
1. Gross profit equals the difference between
a. net income and operating expenses.
b. net sales revenues and cost of goods sold.
c. net sales revenues and operating expenses.
d. net sales revenues and cost of goods sold plus operating expenses. - ANSWERb.
net sales revenues and cost of goods sold.
2. Two categories of expenses in merchandising companies are
a. cost of goods sold and financing expenses.
b. operating expenses and financing expenses.
c. cost of goods sold and operating expenses.
d. sales and cost of goods sold. - ANSWERc. cost of goods sold and operating
expenses.
5.Ellis Company sells merchandise on account for $1,500 to Thomas Company with
credit terms of 2/10, n/30. Thomas Company returns $500 of merchandise that was
damaged, along with a check to settle the account within the discount period. What
entry does Ellis Company make upon receipt of the check?
a.
Cash 1,000
.......Accounts Receivable...........1,000
b.
Cash 980
Sales Returns and Allowances 520
.......Accounts Receivable...........1,500
, c.
Cash 980
Sales Returns and Allowances 500
Sales Discounts 20
.......Accounts Receivable...........1,500
d.
Cash 1,470
Sales Discounts 30
.......Sales Returns and Allowances 500
.......Accounts Receivable...........1,000 - ANSWERc.
Cash 980
Sales Returns and Allowances 500
Sales Discounts 20
.......Accounts Receivable...........1,500
Use the following information to answer questions 6 through 8
Financial information is presented below:
Operating Expenses...............$45,000
Sales Returns and Allowances..13,000
Sales Discount............................6,000
Sales........................................150,000
Cost of Goods Sold...................67,000
6. Gross Profit would be
a. $77,000.
b. $64,000.
c. $70,000.
d. $83,000. - ANSWERb. $64,000.
Use the following information to answer questions 6 through 8
Financial information is presented below:
Operating Expenses...............$45,000
Sales Returns and Allowances..13,000
Sales Discount............................6,000
Sales........................................150,000
Cost of Goods Sold...................67,000
7. The gross profit rate would be
a. 0.535
b. 0.489
c. 0.511
d. 0.553 - ANSWERb. 0.489
Use the following information to answer questions 6 through 8
Financial information is presented below:
Operating Expenses...............$45,000
QUESTIONS & ANSWERS(GRADED A+)
3. If a purchaser using a periodic inventory system pays the transportation costs,
then the
a. Merchandise Inventory account is increased.
b. Merchandise Inventory account is not affected.
c. Freight-in account is increased.
d. Delivery Expense account is increased. - ANSWERc. Freight-in account is
increased.
4. Freight costs incurred by a seller on merchandise sold to customers will cause an
increase
a. in the selling expenses of the buyer.
b. in operating expenses for the seller.
c. to the cost of goods sold of the seller.
d. to a contra-revenue account of the seller. - ANSWERb. in operating expenses for
the seller.
1. Gross profit equals the difference between
a. net income and operating expenses.
b. net sales revenues and cost of goods sold.
c. net sales revenues and operating expenses.
d. net sales revenues and cost of goods sold plus operating expenses. - ANSWERb.
net sales revenues and cost of goods sold.
2. Two categories of expenses in merchandising companies are
a. cost of goods sold and financing expenses.
b. operating expenses and financing expenses.
c. cost of goods sold and operating expenses.
d. sales and cost of goods sold. - ANSWERc. cost of goods sold and operating
expenses.
5.Ellis Company sells merchandise on account for $1,500 to Thomas Company with
credit terms of 2/10, n/30. Thomas Company returns $500 of merchandise that was
damaged, along with a check to settle the account within the discount period. What
entry does Ellis Company make upon receipt of the check?
a.
Cash 1,000
.......Accounts Receivable...........1,000
b.
Cash 980
Sales Returns and Allowances 520
.......Accounts Receivable...........1,500
, c.
Cash 980
Sales Returns and Allowances 500
Sales Discounts 20
.......Accounts Receivable...........1,500
d.
Cash 1,470
Sales Discounts 30
.......Sales Returns and Allowances 500
.......Accounts Receivable...........1,000 - ANSWERc.
Cash 980
Sales Returns and Allowances 500
Sales Discounts 20
.......Accounts Receivable...........1,500
Use the following information to answer questions 6 through 8
Financial information is presented below:
Operating Expenses...............$45,000
Sales Returns and Allowances..13,000
Sales Discount............................6,000
Sales........................................150,000
Cost of Goods Sold...................67,000
6. Gross Profit would be
a. $77,000.
b. $64,000.
c. $70,000.
d. $83,000. - ANSWERb. $64,000.
Use the following information to answer questions 6 through 8
Financial information is presented below:
Operating Expenses...............$45,000
Sales Returns and Allowances..13,000
Sales Discount............................6,000
Sales........................................150,000
Cost of Goods Sold...................67,000
7. The gross profit rate would be
a. 0.535
b. 0.489
c. 0.511
d. 0.553 - ANSWERb. 0.489
Use the following information to answer questions 6 through 8
Financial information is presented below:
Operating Expenses...............$45,000
