ACC 231 ASU Exam 2 Wolfe Question and
Answers 2025/2026
Which of the following indicates the shipment is free on board and the buyer pays all of the
shipping and freight costs?
-Cash on deliver
-FOB destination
-2/10, n/30
-FOB shipping point - CORRECT ANSWER FOB shipping point
On December 1, Macy Company sold merchandise with a selling price of $9000 on account to
Mrs. Jorgenson, with terms 4/10, n/30. On December 3, Mrs. Jorgenson returned merchandise
with a selling price of $700. Mrs. Jorgenson paid the amount due on December 9. What journal
entry did Macy Company prepare on December 9 assuming the gross method is used? -
CORRECT ANSWER Debit Cash for $7968, debit Sales Discounts for $332, and credit
Accounts Receivable for $8300
[$9000 - $700 (returned amount)]
,[$8300 * 0.96 (4/10)]
[$7968]
The following account balances were extracted from the accounting records of Thomas
Corporation at the end of the year:
Accounts Receivable: $1,105,000
Allowance for Uncollectible Accounts (Credit): $37,000
Uncollectible-Account Expense: $60,000
What is the net realizable value of the accounts receivable? - CORRECT ANSWER $1,068,000
[Accounts Receivable - Allowance for Uncollectible Accounts]
If the interest rate on a note is 12.5% and the principal was $57,000, what is the maturity value of
the note, if the term of the note is 5 months? - CORRECT ANSWER $59,969
[5 months = 5/12]
[5/12 * 12.5 = 5.208%]
[$57,000 * 5.208%]
[59,969]
,If both current ratio and quick ratio have improved, has a company's liquidity improved? -
CORRECT ANSWER Yes
A company has $28,000 in cash and cash equivalents, $88,000 in short-term investments,
$122,000 in net current receivables, $64,000 in inventory, $14,000 of prepaid insurance and
$11,000 of supplies. The total current liabilities of the firm are $304,000. The quick ratio of the
company is: - CORRECT ANSWER 0.78
[28,000 + 88,000 + 122,000 = 238,000]
[238,000/304,000]
[0.78]
A company has sales revenue of $131,000, cost of goods sold of $63,000, operating expenses of
$34,000, and other expenses of $2,000. The company's gross profit is: - CORRECT ANSWER
$68,000
[131,000 - 63,000]
Gross Profit and Gross Profit Margin Formula - CORRECT ANSWER Gross Profit = Revenue
- COGS
Gross Profit Margin = (Revenue - COGS)/Revenue
Quick Ratio Formula - CORRECT ANSWER Quick Assets/Current Liabilities
, A company has sales revenue of $133,000, cost of goods sold of $63,000, operating expenses of
$37,000, and other expenses of $4,000. The company's operating income is: - CORRECT
ANSWER $33,000
[133,000 - 63,000 - 37,000}
Operating Income Formula - CORRECT ANSWER Gross Profit (Sales Revenue - COGS) -
Operating Expenses
Syrio's Snowboards uses the perpetual inventory system. At year end the general ledger indicated
that the company had a balance of $24,000 in the Inventory account. Actual inventory on hand
per a physical count was $19,000. What action does the company now need to take?
-Debit Purchases and credit Cost of Goods Sold, $5,000
-No action is required because the amount is not material
-Debit Inventory and credit Cost of Goods Sold, $5,000
-Debit Cost of Goods Sold and credit Inventory, $5,000 - CORRECT ANSWER Debit Cost of
Goods Sold and credit Inventory, $5,000
Salieri Company purchased 80 keyboards on account for $15 each from Amadeus, Inc. When
they unpacked the keyboards, Salieri found that 30 of the keyboards were damaged in shipping.
What is the journal entry that Salieri will make to record the purchase return?
Answers 2025/2026
Which of the following indicates the shipment is free on board and the buyer pays all of the
shipping and freight costs?
-Cash on deliver
-FOB destination
-2/10, n/30
-FOB shipping point - CORRECT ANSWER FOB shipping point
On December 1, Macy Company sold merchandise with a selling price of $9000 on account to
Mrs. Jorgenson, with terms 4/10, n/30. On December 3, Mrs. Jorgenson returned merchandise
with a selling price of $700. Mrs. Jorgenson paid the amount due on December 9. What journal
entry did Macy Company prepare on December 9 assuming the gross method is used? -
CORRECT ANSWER Debit Cash for $7968, debit Sales Discounts for $332, and credit
Accounts Receivable for $8300
[$9000 - $700 (returned amount)]
,[$8300 * 0.96 (4/10)]
[$7968]
The following account balances were extracted from the accounting records of Thomas
Corporation at the end of the year:
Accounts Receivable: $1,105,000
Allowance for Uncollectible Accounts (Credit): $37,000
Uncollectible-Account Expense: $60,000
What is the net realizable value of the accounts receivable? - CORRECT ANSWER $1,068,000
[Accounts Receivable - Allowance for Uncollectible Accounts]
If the interest rate on a note is 12.5% and the principal was $57,000, what is the maturity value of
the note, if the term of the note is 5 months? - CORRECT ANSWER $59,969
[5 months = 5/12]
[5/12 * 12.5 = 5.208%]
[$57,000 * 5.208%]
[59,969]
,If both current ratio and quick ratio have improved, has a company's liquidity improved? -
CORRECT ANSWER Yes
A company has $28,000 in cash and cash equivalents, $88,000 in short-term investments,
$122,000 in net current receivables, $64,000 in inventory, $14,000 of prepaid insurance and
$11,000 of supplies. The total current liabilities of the firm are $304,000. The quick ratio of the
company is: - CORRECT ANSWER 0.78
[28,000 + 88,000 + 122,000 = 238,000]
[238,000/304,000]
[0.78]
A company has sales revenue of $131,000, cost of goods sold of $63,000, operating expenses of
$34,000, and other expenses of $2,000. The company's gross profit is: - CORRECT ANSWER
$68,000
[131,000 - 63,000]
Gross Profit and Gross Profit Margin Formula - CORRECT ANSWER Gross Profit = Revenue
- COGS
Gross Profit Margin = (Revenue - COGS)/Revenue
Quick Ratio Formula - CORRECT ANSWER Quick Assets/Current Liabilities
, A company has sales revenue of $133,000, cost of goods sold of $63,000, operating expenses of
$37,000, and other expenses of $4,000. The company's operating income is: - CORRECT
ANSWER $33,000
[133,000 - 63,000 - 37,000}
Operating Income Formula - CORRECT ANSWER Gross Profit (Sales Revenue - COGS) -
Operating Expenses
Syrio's Snowboards uses the perpetual inventory system. At year end the general ledger indicated
that the company had a balance of $24,000 in the Inventory account. Actual inventory on hand
per a physical count was $19,000. What action does the company now need to take?
-Debit Purchases and credit Cost of Goods Sold, $5,000
-No action is required because the amount is not material
-Debit Inventory and credit Cost of Goods Sold, $5,000
-Debit Cost of Goods Sold and credit Inventory, $5,000 - CORRECT ANSWER Debit Cost of
Goods Sold and credit Inventory, $5,000
Salieri Company purchased 80 keyboards on account for $15 each from Amadeus, Inc. When
they unpacked the keyboards, Salieri found that 30 of the keyboards were damaged in shipping.
What is the journal entry that Salieri will make to record the purchase return?
