Accounting Quiz

The inventory system employing accounting records that continuously disclose the amount of inventory is called

• physical

• retail

• perpetual

• periodic

When comparing a retail business to a service business, the financial statement that changes the most is the

• Statement of Financial Position

• Income Statement

• Statement of Changes in Owner's Equity

• Statement of Cash Flows

Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a

• debit to sales

• debit to Merchandise Inventory

• credit to Merchandise Inventory

• credit to Accounts Receivable

Merchandise is ordered on November 12; the merchandise is shipped by the seller, and the invoice is prepared, dated, and mailed by the seller on November 15; the merchandise is received by the buyer on November 17; the entry is made in the buyer's accounts on November 18. The credit period begins what date?

• November 12

• November 15

• November 17

• November 18

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

• Credit to Sales Returns and Allowances

• Debit to Merchandise Inventory

• Credit to Merchandise Inventory

• Debit to Cost of Goods Sold

If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a

• Debit memo

• Sales invoice

• Purchase invoice

• Credit memorandum

The arrangements between buyer and seller as to when payments for merchandise are to be made are called

• Credit terms

• Freight terms

• Terms of endearment

• COD

The entry to record the return of merchandise from a customer would include a

• Debit to Sales

• Credit to Sales

• Debit to Sales Returns & Allowances

• Credit to Sales Returns & Allowances

When merchandise is returned, the buyer would credit

• Merchandise Inventory

• Purchase Returns and Allowances

• Accounts Payable

• A or B depending on the inventory system used

If the buyer is to pay the transportation costs of delivering merchandise, delivery terms are stated as

• FOB n/30

• FOB destination point

• FOB shipping point

• FOB collect