ACCT 2810 Miller Exam 2 With All Correct & 100%
Verified Answers |Latest Update |Already Graded A+
service businesses ✔Correct Answer--Revenue activities involve providing services to customers.-
Example: Family Health Care, P.C.
Retail Operations ✔Correct Answer--Merchandisers
-Revenue activities involve the buying and selling of merchandise.
-Example: Home Depot Inc.
gross profit ✔Correct Answer-net sales - cost of goods sold
net sales ✔Correct Answer-sales revenue less returns and discounts
Cost of Goods Sold ✔Correct Answer-cost paid for merchandise that was sold
periodic system ✔Correct Answer-Inventory records are updated "periodically".
-Inventory purchases recorded in "Purchases" account
-No entry to adjust inventory at point of sale
-Ending inventory count is used to determine COGS at the end of the period
Perpetual System ✔Correct Answer-Inventory records are updated at the point of sale.
-Inventory purchases are recorded in "Inventory" account"Inventory" account is adjusted at point of
sale
-Inventory account balance shows what inventory should be on hand at any point in the period.
(Balance in the inventory account is kept up to date "perpetually".)
discounts ✔Correct Answer-Received by buyers for making an early payment of an invoice
credit terms ✔Correct Answer-2/10, n30
-Refers to the timing of when payments for merchandise are to be made, agreed on by the buyer and
the seller
-If payment is required on delivery, the terms are cash or net cash
-Buyer should make the payments within a credit period
fob ✔Correct Answer-free on board
FOB destination ✔Correct Answer-Title passes from the seller to the buyer when the goods are
delivered to the buyer.
FOB shipping point ✔Correct Answer-title passes when the seller ships the inventory, not when the
buyer receives it.
adjustments for retail operations ✔Correct Answer-inventory shrinkage, Estimated customer
refunds and allowances, Estimated customer merchandise returns
customer refunds payable ✔Correct Answer-estimate is used in the adjusting process to record a
liability
, estimated returns inventory ✔Correct Answer-inventory expected to be returned in the future
-Estimated at the end of the period as part of the adjusting process
cash sale ✔Correct Answer-Seller collects the sales tax
Sale made on account ✔Correct Answer-Seller charges the buyer by increasing Accounts
Receivable
Inventory Shrinkage ✔Correct Answer-Difference between the balance of Merchandise Inventory
and the physical inventory on hand at the end of the accounting period
Multiple-Step Income Statement Format ✔Correct Answer--Cost of goods sold
-Gross profit
-Income from operations
-Selling expenses
-Administrative expenses
-Other revenue
-Other expense
Single-Step Income Statement for Retail Company ✔Correct Answer--Revenue
-expenses
-net income
Objectives of Internal Control ✔Correct Answer-safeguard assets, accurate information,
compliance with laws and regulations
elements of internal control ✔Correct Answer-control environment, risk assessment, control
activities, information and communication, monitoring
control enviroment ✔Correct Answer--Overall attitude of the management and the employees
about the importance of controls
-factors that influence a company's control environment
-Management's philosophy and operating style
-Company's organizational structure
-Company's personnel policies
risk assessment ✔Correct Answer--Management should:
-Identify risks and analyze their significance
-Assess the probability of the occurrence of risks
-Take necessary actions to minimize risks
Control Procedures ✔Correct Answer--Provide reasonable assurance that business goals will be
achieved
-Include:
-Competent personnel, rotating duties, and mandatory vacations
-Separating responsibilities for related operations
-Separating operations, custody of assets, and accounting
-Proofs and security measures
human element of controls ✔Correct Answer-fatigue, carelessness, confusion, or misjudgment can
cause human errors
Verified Answers |Latest Update |Already Graded A+
service businesses ✔Correct Answer--Revenue activities involve providing services to customers.-
Example: Family Health Care, P.C.
Retail Operations ✔Correct Answer--Merchandisers
-Revenue activities involve the buying and selling of merchandise.
-Example: Home Depot Inc.
gross profit ✔Correct Answer-net sales - cost of goods sold
net sales ✔Correct Answer-sales revenue less returns and discounts
Cost of Goods Sold ✔Correct Answer-cost paid for merchandise that was sold
periodic system ✔Correct Answer-Inventory records are updated "periodically".
-Inventory purchases recorded in "Purchases" account
-No entry to adjust inventory at point of sale
-Ending inventory count is used to determine COGS at the end of the period
Perpetual System ✔Correct Answer-Inventory records are updated at the point of sale.
-Inventory purchases are recorded in "Inventory" account"Inventory" account is adjusted at point of
sale
-Inventory account balance shows what inventory should be on hand at any point in the period.
(Balance in the inventory account is kept up to date "perpetually".)
discounts ✔Correct Answer-Received by buyers for making an early payment of an invoice
credit terms ✔Correct Answer-2/10, n30
-Refers to the timing of when payments for merchandise are to be made, agreed on by the buyer and
the seller
-If payment is required on delivery, the terms are cash or net cash
-Buyer should make the payments within a credit period
fob ✔Correct Answer-free on board
FOB destination ✔Correct Answer-Title passes from the seller to the buyer when the goods are
delivered to the buyer.
FOB shipping point ✔Correct Answer-title passes when the seller ships the inventory, not when the
buyer receives it.
adjustments for retail operations ✔Correct Answer-inventory shrinkage, Estimated customer
refunds and allowances, Estimated customer merchandise returns
customer refunds payable ✔Correct Answer-estimate is used in the adjusting process to record a
liability
, estimated returns inventory ✔Correct Answer-inventory expected to be returned in the future
-Estimated at the end of the period as part of the adjusting process
cash sale ✔Correct Answer-Seller collects the sales tax
Sale made on account ✔Correct Answer-Seller charges the buyer by increasing Accounts
Receivable
Inventory Shrinkage ✔Correct Answer-Difference between the balance of Merchandise Inventory
and the physical inventory on hand at the end of the accounting period
Multiple-Step Income Statement Format ✔Correct Answer--Cost of goods sold
-Gross profit
-Income from operations
-Selling expenses
-Administrative expenses
-Other revenue
-Other expense
Single-Step Income Statement for Retail Company ✔Correct Answer--Revenue
-expenses
-net income
Objectives of Internal Control ✔Correct Answer-safeguard assets, accurate information,
compliance with laws and regulations
elements of internal control ✔Correct Answer-control environment, risk assessment, control
activities, information and communication, monitoring
control enviroment ✔Correct Answer--Overall attitude of the management and the employees
about the importance of controls
-factors that influence a company's control environment
-Management's philosophy and operating style
-Company's organizational structure
-Company's personnel policies
risk assessment ✔Correct Answer--Management should:
-Identify risks and analyze their significance
-Assess the probability of the occurrence of risks
-Take necessary actions to minimize risks
Control Procedures ✔Correct Answer--Provide reasonable assurance that business goals will be
achieved
-Include:
-Competent personnel, rotating duties, and mandatory vacations
-Separating responsibilities for related operations
-Separating operations, custody of assets, and accounting
-Proofs and security measures
human element of controls ✔Correct Answer-fatigue, carelessness, confusion, or misjudgment can
cause human errors
