ACC 231 UPDATED EXAMS SCRIPT QUESTIONS
AND ANSWERS SURE A+
✔✔If an employee rings up a false refund and pockets the cash, this would be
considered a(n): - ✔✔cash register scheme
✔✔Cost of Goods Sold includes: - ✔✔The actual cost of the item. NOT management
salaries, administrative fees, or depreciation expense
✔✔The entry to record the company's cost of selling merchandise under a perpetual
inventory system would be a: - ✔✔Debit to COGS and credit to inventory
✔✔a company had sales for the week of $3663, of which, $3000 was on credit and
$663 in cash sales. the cost of the merchandise sold was $1848. The journal entries
would include: - ✔✔a debit to COGS for $1848; credit to inventory for $1848
✔✔T or F? Net Sales - COGS = Profit - ✔✔True; and ONLY COGS. other expenses do
not count!!!
✔✔A method of valuing inventory based on the assumption that the newest goods will
be sold first is the: - ✔✔LIFO method
, ✔✔A custom boat shop would probably cost its inventory using the: - ✔✔specific-
identification method of inventory costing
✔✔Inventory errors cancel out at the end of _______ accounting periods. - ✔✔2
✔✔A company has $4300 in net sales, $3500 in gross profit, $1600 in ending inventory,
and $2000 in beginning inventory. The company's COGS is: - ✔✔$800.
Net sales - gross profit
✔✔Woods Co. had an inventory balance of $2800 on Jan 1. During the accounting
period they made purchases of $10,500. The ending inventory balance was $3,250. If
Woods Co. uses the periodic inventory system, what is the COG available for sale? -
✔✔$13,300
$10,500+$2800
✔✔If an invoice states 2/10, n/45, the 10 refers to: - ✔✔days in the discount period
✔✔Under the perpetual inventory system, Sales Returns cause: - ✔✔a decrease in cost
of goods sold
✔✔In order to pay the least income tax possible in periods of rising inventory costs, the
company should use which inventory costing method? - ✔✔LIFO
✔✔_______ produces the lowest cost of goods sold and the highest gross profit when
prices are increasing . - ✔✔FIFO
✔✔The Betta Corp's inventory account balance was $1300 at the end of the year. The
actual inventory on hand was $1150. What amount should Betta report on the balance
sheet for inventory? - ✔✔$1150
✔✔If period 1 ending inventory is understated, then: - ✔✔the COGS is overstated and
net income is understated in period 1.
✔✔The journal entry to record the purchase of $8200 of inventory on account under the
perpetual inventory system is: - ✔✔debit inventory $8200; credit accounts payable
$8200
✔✔Physical inventory counts must be done: - ✔✔regardless of inventory system
✔✔If inventory is sold FOB destination, the title transfers from seller to buyer : -
✔✔when the goods reach their destination
✔✔Gross Profit Method - ✔✔net sales revenue - COGS
AND ANSWERS SURE A+
✔✔If an employee rings up a false refund and pockets the cash, this would be
considered a(n): - ✔✔cash register scheme
✔✔Cost of Goods Sold includes: - ✔✔The actual cost of the item. NOT management
salaries, administrative fees, or depreciation expense
✔✔The entry to record the company's cost of selling merchandise under a perpetual
inventory system would be a: - ✔✔Debit to COGS and credit to inventory
✔✔a company had sales for the week of $3663, of which, $3000 was on credit and
$663 in cash sales. the cost of the merchandise sold was $1848. The journal entries
would include: - ✔✔a debit to COGS for $1848; credit to inventory for $1848
✔✔T or F? Net Sales - COGS = Profit - ✔✔True; and ONLY COGS. other expenses do
not count!!!
✔✔A method of valuing inventory based on the assumption that the newest goods will
be sold first is the: - ✔✔LIFO method
, ✔✔A custom boat shop would probably cost its inventory using the: - ✔✔specific-
identification method of inventory costing
✔✔Inventory errors cancel out at the end of _______ accounting periods. - ✔✔2
✔✔A company has $4300 in net sales, $3500 in gross profit, $1600 in ending inventory,
and $2000 in beginning inventory. The company's COGS is: - ✔✔$800.
Net sales - gross profit
✔✔Woods Co. had an inventory balance of $2800 on Jan 1. During the accounting
period they made purchases of $10,500. The ending inventory balance was $3,250. If
Woods Co. uses the periodic inventory system, what is the COG available for sale? -
✔✔$13,300
$10,500+$2800
✔✔If an invoice states 2/10, n/45, the 10 refers to: - ✔✔days in the discount period
✔✔Under the perpetual inventory system, Sales Returns cause: - ✔✔a decrease in cost
of goods sold
✔✔In order to pay the least income tax possible in periods of rising inventory costs, the
company should use which inventory costing method? - ✔✔LIFO
✔✔_______ produces the lowest cost of goods sold and the highest gross profit when
prices are increasing . - ✔✔FIFO
✔✔The Betta Corp's inventory account balance was $1300 at the end of the year. The
actual inventory on hand was $1150. What amount should Betta report on the balance
sheet for inventory? - ✔✔$1150
✔✔If period 1 ending inventory is understated, then: - ✔✔the COGS is overstated and
net income is understated in period 1.
✔✔The journal entry to record the purchase of $8200 of inventory on account under the
perpetual inventory system is: - ✔✔debit inventory $8200; credit accounts payable
$8200
✔✔Physical inventory counts must be done: - ✔✔regardless of inventory system
✔✔If inventory is sold FOB destination, the title transfers from seller to buyer : -
✔✔when the goods reach their destination
✔✔Gross Profit Method - ✔✔net sales revenue - COGS
