ACCT 2810 Miller Exam 2 – Practice Questions, Study Guide & Accounting Exam
Review 2026
service businesses - ANS ✔✔-Revenue activities involve providing services to customers.-
Example: Family Health Care, P.C.
Retail Operations - ANS ✔✔-Merchandisers
-Revenue activities involve the buying and selling of merchandise.
-Example: Home Depot Inc.
gross profit - ANS ✔✔net sales - cost of goods sold
net sales - ANS ✔✔sales revenue less returns and discounts
Cost of Goods Sold - ANS ✔✔cost paid for merchandise that was sold
periodic system - ANS ✔✔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 - ANS ✔✔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 - ANS ✔✔Received by buyers for making an early payment of an invoice
credit terms - ANS ✔✔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 - ANS ✔✔free on board
FOB destination - ANS ✔✔Title passes from the seller to the buyer when the goods are
delivered to the buyer.
FOB shipping point - ANS ✔✔title passes when the seller ships the inventory, not when the
buyer receives it.
adjustments for retail operations - ANS ✔✔inventory shrinkage, Estimated customer refunds
and allowances, Estimated customer merchandise returns
customer refunds payable - ANS ✔✔estimate is used in the adjusting process to record a
liability
estimated returns inventory - ANS ✔✔inventory expected to be returned in the future
-Estimated at the end of the period as part of the adjusting process
cash sale - ANS ✔✔Seller collects the sales tax
Sale made on account - ANS ✔✔Seller charges the buyer by increasing Accounts Receivable
Review 2026
service businesses - ANS ✔✔-Revenue activities involve providing services to customers.-
Example: Family Health Care, P.C.
Retail Operations - ANS ✔✔-Merchandisers
-Revenue activities involve the buying and selling of merchandise.
-Example: Home Depot Inc.
gross profit - ANS ✔✔net sales - cost of goods sold
net sales - ANS ✔✔sales revenue less returns and discounts
Cost of Goods Sold - ANS ✔✔cost paid for merchandise that was sold
periodic system - ANS ✔✔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 - ANS ✔✔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 - ANS ✔✔Received by buyers for making an early payment of an invoice
credit terms - ANS ✔✔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 - ANS ✔✔free on board
FOB destination - ANS ✔✔Title passes from the seller to the buyer when the goods are
delivered to the buyer.
FOB shipping point - ANS ✔✔title passes when the seller ships the inventory, not when the
buyer receives it.
adjustments for retail operations - ANS ✔✔inventory shrinkage, Estimated customer refunds
and allowances, Estimated customer merchandise returns
customer refunds payable - ANS ✔✔estimate is used in the adjusting process to record a
liability
estimated returns inventory - ANS ✔✔inventory expected to be returned in the future
-Estimated at the end of the period as part of the adjusting process
cash sale - ANS ✔✔Seller collects the sales tax
Sale made on account - ANS ✔✔Seller charges the buyer by increasing Accounts Receivable
