Accounting Final Exam - Spring 2024 Review

Quick assets are defined as:

• Cash, short-term investments, and accounts payable.
• Cash, short-term investments, and current receivables.
• Cash, inventory, and current receivables.
• Cash, noncurrent receivables, and prepaid expenses.
• Accounts receivable, inventory, and prepaid expenses.

A company's current assets are $18,940, its quick assets are $10,370 and its current liabilities are $12,500. Its quick ratio is closest to:

• 0.83.
• 1.21.
• 1.51.
• 1.83.
• 2.34.

Cost of goods sold:

• Is another term for merchandise sales.
• Is the term used for the expense of buying and preparing merchandise for sale.
• Is another term for revenue.
• Is also called gross margin.
• Is a term only used by service firms.

A company has net sales of $398,400 and its gross profit is $167,900. Its cost of goods sold is:

• 207400
• 398400
• 167900
• 230500
• 566300

A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:

• 200
• 1564
• 1568
• 1600
• 1800

A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 28 is:

• Debit Merchandise Inventory $1,600; credit Cash $1,600.
• Debit Cash $1,600; credit Accounts Payable $1,600.
• Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568.
• Debit Accounts Payable $1,800; credit Cash $1,800.
• Debit Accounts Payable $1,600; credit Cash $1,600.

Sales returns:

• Refer to merchandise that customers return to the seller for a refund.
• Refer to reductions in the selling price of merchandise sold to customers.
• Represent cash discounts.
• Represent purchases discounts.
• Are not recorded under the perpetual inventory system until the end of each accounting period.

Garza Company had sales of $152,200, sales discounts of $2,300, and sales returns of $3,655. Garza Company's net sales equals:

• 5955
• 146245
• 149900
• 152200
• 158155

The current period's ending inventory is:

• The next period's beginning inventory.
• The current period's cost of goods sold.
• The prior period's beginning inventory.
• The current period's net purchases.
• The current period's beginning inventory.

Frisco Company's Merchandise Inventory account at year-end has a balance of $62,115, but a physical count reveals that only $61,900 of inventory exists. The adjusting entry to record this $215 of inventory shrinkage is:

• Debit Merchandise Inventory $215; credit Inventory Shrinkage Expense $215
• Debit Purchases Discount $215; credit Cost of Goods Sold $215
• Debit Cost of Goods Sold $215; credit Purchases Discount $215
• Debit Inventory Shrinkage Expense $215; credit Cost of Goods Sold $215
• Debit Cost of Goods Sold $215; credit Merchandise Inventory $215