ACC 250 Quiz 3 Questions And Answers With
Updated Solutions
credit terms ✅ ANS The terms of purchase or sale as stated on the invoice
FOB Destination ✅ ANS A situation in which the buyer takes ownership (title) at the delivery destination
point
Invoice ✅ ANS A seller's request for cash from the purchaser.
Cost of Goods Sold ✅ ANS the cost of the merchandise inventory that the business has sold to customers
purchase allowance ✅ ANS An amount granted to the purchaser as an incentive to keep goods that are not
"as ordered"
FOB shipping point ✅ ANS A situation in which the buyer takes title to the goods after the goods leave the
seller's place of business
Wholesaler ✅ ANS A type of merchandiser that buys goods from manufacturers and then sells them to
retailers
Purchase discount ✅ ANS a discount that business offer to purchasers as an incentive for early payment
Retailer ✅ ANS A type of merchandiser that buys merchandise either from a manufacturer or a wholesaler
and then sells those goods to consumers.
when using the perpetual inventory system, the entry to close Cost of of Goods Sold will include a debit to
Income Summary ✅ ANS ture
A merchandiser reports sales revenue of $24,000 and sales discounts forfeited of $1,440. The merchandiser
uses a perpetual inventory systems. The first entry in the closing process would include? ✅ ANS A credit to
income summary for $25,440
, (24,000+1,440) these are normally credits the income summary is credited
On the income statement a merchandising company reports the cost of merchandise inventory that has been
sold to customer. ✅ ANS True
A company that issues the perpetual inventory system sold goods for $2,400 to a customer on account. The
company purchased the inventory for $800. Which of the following journal entries correctly records the cost of
goods sold? ✅ ANS Cost of Goods Sold (D 800)
Merchandise inv. (C 800)
Carpenter Company generated sales revenue of $1,000,000 in 2019. Its cost of goods sold amounted to
$600,000. Calculate Capenter's gross profit percentage. ✅ ANS 40%
Gross profit/revenue
(1,000,000-600,000)/1,000,000
The following information relates to Sports Bikes Company
Net Sales revenue $203,000
cost of goods sold 160,000
interest revenue 10,000
operating expenses 40,000
calculate the operating income. ✅ ANS 3,000
-ignore interest revenue
(203,000-160,000) -40,000=3,000
In a period of rising costs, the last in first out (LIFO) method results in a higher cost of goods sold and a lower
net income than the first in first out (FIFO) method. ✅ ANS True
Updated Solutions
credit terms ✅ ANS The terms of purchase or sale as stated on the invoice
FOB Destination ✅ ANS A situation in which the buyer takes ownership (title) at the delivery destination
point
Invoice ✅ ANS A seller's request for cash from the purchaser.
Cost of Goods Sold ✅ ANS the cost of the merchandise inventory that the business has sold to customers
purchase allowance ✅ ANS An amount granted to the purchaser as an incentive to keep goods that are not
"as ordered"
FOB shipping point ✅ ANS A situation in which the buyer takes title to the goods after the goods leave the
seller's place of business
Wholesaler ✅ ANS A type of merchandiser that buys goods from manufacturers and then sells them to
retailers
Purchase discount ✅ ANS a discount that business offer to purchasers as an incentive for early payment
Retailer ✅ ANS A type of merchandiser that buys merchandise either from a manufacturer or a wholesaler
and then sells those goods to consumers.
when using the perpetual inventory system, the entry to close Cost of of Goods Sold will include a debit to
Income Summary ✅ ANS ture
A merchandiser reports sales revenue of $24,000 and sales discounts forfeited of $1,440. The merchandiser
uses a perpetual inventory systems. The first entry in the closing process would include? ✅ ANS A credit to
income summary for $25,440
, (24,000+1,440) these are normally credits the income summary is credited
On the income statement a merchandising company reports the cost of merchandise inventory that has been
sold to customer. ✅ ANS True
A company that issues the perpetual inventory system sold goods for $2,400 to a customer on account. The
company purchased the inventory for $800. Which of the following journal entries correctly records the cost of
goods sold? ✅ ANS Cost of Goods Sold (D 800)
Merchandise inv. (C 800)
Carpenter Company generated sales revenue of $1,000,000 in 2019. Its cost of goods sold amounted to
$600,000. Calculate Capenter's gross profit percentage. ✅ ANS 40%
Gross profit/revenue
(1,000,000-600,000)/1,000,000
The following information relates to Sports Bikes Company
Net Sales revenue $203,000
cost of goods sold 160,000
interest revenue 10,000
operating expenses 40,000
calculate the operating income. ✅ ANS 3,000
-ignore interest revenue
(203,000-160,000) -40,000=3,000
In a period of rising costs, the last in first out (LIFO) method results in a higher cost of goods sold and a lower
net income than the first in first out (FIFO) method. ✅ ANS True
