US Accounting_Chapter 5

Lexel Company sold goods for $1,000, terms 2/10, n/30. How much would Lexel receive if the account were paid within the discount period?

• $882

• $900

• $980

• $1,000

On April 1, 20x4, merchandise was purchased on credit from a wholesaler for $855. On April 19, 20x4, $325 of damaged merchandise was returned. Assuming the perpetual inventory system is used, the entry to record the return of damaged merchandise is

• Debit Accounts Payable, $325; credit Merchandise Inventory, $325

• Debit Merchandise Inventory, $325; credit Accounts Payable, $325

• Debit Purchases Returns and Allowances, $325; credit Accounts Payable, $325

• Debit Accounts Payable, $325; credit Purchases Returns and Allowances, $325

Operating expenses include all the following except

• Selling expenses

• Cost of goods sold

• Delivery expense

• None of these

Losses of inventory are most easily identified using

• Neither the periodic nor perpetual inventory systems

• The periodic inventory system

• Either the periodic or perpetual inventory systems

• The perpetual inventory system

On March 1, Etheredge, Inc., sells merchandise on account to Brooks Company for $7,000, terms 2/10, n/30. On March 3, Brooks returns $500 of the merchandise to Etheredge. On March 9, payment is received from Brooks for the balance due. The entry on March 3 by Etheredge is

• Dr. Sales $500 and Cr. Account Receivable $500

• Dr. Sales Discount $500 and Cr. Cash $500

• Dr. Sales Returns and Allowance $500 and Cr. Account Receivable $500

• Dr. Sales $500 and Cr. Cash $500

Under the perpetual inventory system, in addition to making the entry to record a sale, a company would

• Debit Cost of Goods Sold and credit Merchandise Inventory

• Debit Merchandise Inventory and credit Cost of Goods Sold

• Debit Cost of Goods Sold and credit Purchases

• Make no additional entry until the end of the period

The financing period is

• Also referred to as the cash gap

• The period before cash is paid for merchandise inventory and after cash is received for the sale of that inventory

• Neither of these

• Both of these

Which of the following is deducted from goods available for sale to determine cost of goods sold?

• Ending inventory

• Purchases

• Freight in

• Beginning inventory

A customer takes advantage of a 2 percent sales discount on a $400 purchase. Under the gross price method, the entry to record the receipt of payment is

• Debit Cash, $392, debit Purchases Discounts $8, credit Accounts Receivable, $400

• Debit Cash, $392, debit Sales Discounts $8, credit Accounts Receivable, $400

• Debit Cash $392, credit Sales Discounts, $392

• Debit Cash, $392, credit Accounts Receivable, $392

Under the perpetual inventory system, the sale of merchandise sold on credit is recorded by

• Debiting Accounts Receivable and crediting Sales

• Debiting Cost of Goods Sold and crediting Merchandise Inventory

• Both of these

• Neither of these