WorksheetsBAC1 FQ1
Total questions: 25
Worksheet time: 1hrs 1mins
EASY ROUND
1. The major revenue of a merchandiser is ___ while the major expense(s) is (are)___:
a. gross margin, operating expenses
b. income from operations, cost of goods sold
c. sales revenue, cost of goods sold
d. sales revenue, operating expenses
2. Inventory held by a business is a (n) ____ and when sold becomes a(n) _____:
a. asset, expense
b. liability, withdrawal
c. liability, asset
d. asset, contra asset
3. Credit terms are 1/10, n/30 indicates that the buyer is:
a. allowed a 1% discount if payment is made within 10 days
b. allowed a 10% discount if payment is made within 30 days
c. allowed a 1% discount if payment is made within 30 days
d. allowed a 30% discount if payment is made within 10 days
4. When the seller accepts a return of goods from the purchaser originally sold on account, the seller’s journal entry would include a debit to:
a. sales discounts and credit to cash
b. sales returns and allowances and credit to sales discounts
c. sales returns and allowances and credit to accounts receivable
d. sales revenue and credit to cash
5. Sales revenue, P480,000; Cost of goods sold, 300,000; Sales discounts, 20,000; Sales returns and allowances, 15,000; Operating expenses, 85,000; and Interest revenue, 5,000. How much is the gross margin?
a. P105,000
b. P140,000
c. P145,000
d. P90,000
6. Beginning inventory plus net purchases and plus freight in equals:
a. net purchases
b. cost of goods sold
c. gross purchases
d. cost of goods available for sale
7. Expenses other than cost of goods sold, that are incurred in the entity’s major line of business are called:
a. merchandising expenses
b. operating expenses
c. servicing expenses
d. other expenses
8. A printed price of a manufacturer or wholesaler that is subject to trade discounts is called
a. list price
b. net price
c. gross price
d. retail price
9. Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?
a. selling expense
b. administrative expense
c. miscellaneous expense
d. other expense
10. When goods are shipped FOB destination and the seller pays the transportation charges, the buyer
a. journalizes a reduction for the cost of the merchandise
b. makes no journal entry for the transportation
c. journalizes a reimbursement to the seller
d. does not take a discount
MODERATE ROUND
1. A company makes a purchase of P2,000 of inventory, subject to credit terms of 3/10, n/45 and returns P500 of inventory prior to payment. What is the amount of the payment assuming payment is made within the discount period?
a. P1,500
b. P1,440
c. P1,455
d. P1,560
2. Cost of goods sold is P7,400. Beginning inventory is P3,500 and ending inventory is P4,000. If there is no freight in and total purchases were P8,250, what were purchase returns and allowances?
a. P850
b. P350
c. P500
d. none of the above
3. Cost of goods sold is P8,000 greater than net purchases. Beginning inventory is P120,000. What is ending inventory?
a. P128,000
b. P112,000
c. P120,000
d. none of the above
4. The closing process includes crediting the following accounts to bring their balances to zero:
a. purchases and freight in
b. allowance for doubtful accounts
c. purchase discounts and sales discounts
d. purchase returns and allowances and purchase discounts
5. Which one of the following is not a difference between a retail business and a service business?
a. accounting equation
b. in what is sold
c. the inclusion of gross profit in the income statement
d. merchandise inventory included in the balance sheet
6. Which account is not classified as a selling expense?
a. Sales discounts
b. Sales salaries
c. Transportation-out
d. Advertising expense
7. 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 with what date?
a. November 12
b. November 17
c. November 18
d. November 15
8. A sales invoice included the following information: merchandise price, P4,000; transportation, P300 terms 1/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of P600 is granted prior to payment, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period, what is the amount of cash received by the seller?
a. P3,666
b. P3,366
c. P3,400
d. P3,950
9. Apple Co sells merchandise on credit to Zea Co in the amount of P8,000. The invoice is dated September 15 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
a. P80, September 30
b. P160, September 30
c. P160, September 25
d. P80, September 25
10. Closing entries will include
a. Dr. Sales, Purchase returns and allowances, Purchase discounts
b. Cr. Purchases, Sales discounts, Sales returns and allowances
c. Adjust Merchandise Inventory account to match physical inventory
d. All are correct.
FINAL ROUND
1. Sales revenue, 750,000; Freight in, 44,000; Beginning inventory, 75,000; Purchases discounts, 20,000; Sales returns and allowances, 44,000; Operating expenses, 99,000; Ending inventory, 72,000; Purchases, 415,000; Sales discounts, 25,000; William Browning withdrawals, 61,000; and Purchase returns and allowances, 36,000. The cost of goods sold is:
a. P470,000
b. P406,000
c. P478,000
d. P351,000
2. Julie Beth Company bought goods from Lisel Company, with shipping terms FOB destination. Which of the following statements correctly identifies who is to pay the freight bill when the title is transferred?
a. Julie Beth pays transportation, and title is exchanged when goods are loaded at Lisel Company
b. Lisel pays transportation, and title is exchanged when goods are unloaded at Lisel Company.
c. Lisel pays transportation, and title is exchanged when goods are unloaded at Julie Beth Company.
d. The buyer pays the freight, thus the term FOB (free on board).
3. Silver Co. sold merchandise to Bronze Co. on account, P23,000, terms 2/15, net 45. The cost of the merchandise sold is P18,500. Silver Co. issued a credit memorandum of P2,500 for merchandise returned that originally cost P1,900. The Bronze Co. paid the invoice within the discount period. What is the amount of net sales from the above transactions?
a. P20,500
b. P3,490
c. P20,090
d. P23,000
4. Black Company sold Red Company merchandise on account FOB shipping point, 2/10, net 30, for P10,000. Black prepaid the P200 shipping charge. Which of the following entries does Black make to record this sale?
a. Accounts receivable-Red, debit P10,000; Sales, credit P10,000
b. Accounts receivable-Red, debit P10,400; Sales, credit P10,400
c. Accounts receivable-Red, debit P10,000; Sales, credit P10,000 and Transportation out, debit P200; Cash, credit P200
d. Accounts receivable-Red, debit P10,000; Sales, credit P10,000 and Accounts receivable-Red, debit P200; Cash, credit P200.
5. A retailer purchases merchandise with a catalog list price of P10,000. The retailer receives a 25% trade discount and credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period?
a. P10,000
b. P7,350
c. P7,500
d. P9,800
