Unit 2 Acct - SAC 1a Revision

Accounts payable is classified as a ___________ __________ on a Balance Sheet.

• current asset

• current liability

• non-current asset

• non-current liability

Office equipment is classified as a ___________ ____________ on a Balance Sheet.

• current asset

• current liability

• non-current asset

• non-current liability

If loan is $50 000 (payable $3 000 per month), it will be classified on a Balance Sheet as

• Current liability $14 000; Non-current liability $36 000

• Current liability $36 000; Non-current liability $14 000

• Current liability $50 000

• Non-current liability $50 000

The two-fold effect of the transaction "Inventory purchased on cash for $3 300 including GST" on the accounting equation is

• Total assets decrease by $3 300; Total liabilities decrease by $3 300

• Total assets decrease by $3 300; Total liabilities decrease by $300; Owner's equity decreases by $3 000

• Total assets decrease by $300; Total liabilities decrease by $300; No effect on owner's equity

The two-fold effect of the transaction "Sold goods on credit for $4 400 including GST; Cost price $2 000" on the accounting equation is

• Assets increase by $2 400; Liabilities increase by $400; Owner's equity increases by $2 000.

• Assets increase by $4 400; Liabilities increase by $400; Owner's equity increases by $4 000.

• Assets decrease by $2 000; Owner's equity decreases by $2 000

The two-fold effect of the transaction "Owner withdrew $400 cash from the business bank account" on the accounting equation is

• Assets decrease by $400; Owner's equity decreases by $400

• Assets decrease by $400; Liabilities decrease by $400

• Liabilities decrease by $400; Owner's equity increases by $400

According to FIFO rules, the cost price of the inventory gained is

• the latest cost price in the BALANCE column

• the latest cost price in the OUT column

• the latest cost price in the IN column

According to the FIFO rules, the cost price of the inventory returned by a customer is determined by

• the latest cost price in the BALANCE column

• the latest cost price in the IN column

• the latest cost price in the OUT column

Calculate the inventory turnover using the following information:

- Inventory on hand at the start: $54 000

- Inventory on hand at the end: $57 000

- Cost of goods sold in the period: $300 000

• 67.5 days

• 65.7 days

• 60 days

To improve inventory turnover rate, the business can implement the following strategies:

• source inventory that are in high demand

• invest in more effective advertising methods

• source more inventory, regardless of whether it will be bought by customers

• all of the above