ECONOMICS

Looking for assistance with this Accounting Quiz. Multiple choice questions. For all essay questions, show your work.

 

1. (Multiple Choice)

Wilshire Equipment Company sold merchandise on credit.  No discounts were offered.  The proper journal entry to record this sale would be:

A.   Debit Sales, and Credit Accounts Receivable.
B.   Debit Cash, and Credit Accounts Receivable.
C.   Debit Accounts Receivable, and Credit Sales.
D.   Debit Accounts Receivable, and Credit Purchases (or Inventory).
E.   None of these.

2. (Multiple Choice)

Using the gross method of recording sales, what sales price should be recorded when an item with an $1,100 list price is sold with a 15% trade discount?  The sales invoice includes the terms 2/10, n/30?

A.   $935.
B.   $1,078.
C.   $1,100.
D.   $916.30.
E.   None of these.

3. (Multiple Choice)

Merchandise is sold on account on January 16, terms 2/10, n/30, and recorded by debiting Accounts Receivable and crediting Sales for $2,000.  If payment occurs on January 21, the journal entry would include a credit to:

A.   Accounts Receivable for $1,960.
B.   Accounts Receivable for $2,000.
C.   Sales Discounts for $40.
D.   Cash for $1,960.
E.   None of these.

4. (Multiple Choice)

Sperry Company had beginning inventory of $80,000, purchased merchandise during the period for $140,000, and had ending inventory of $95,000.  How much was goods available for sale?

A.   $125,000.
B.   $155,000.
C.   $175,000.
D.   $315,000.
E.   None of these.

5. (Multiple Choice)

A typical internal accounting control feature would be:

A.   managerial authorization of refunds.
B.   prenumbered documents.
C.   requiring two signatures on checks..
D.   All of the above.
E.   None of these.

6. (Essay)

Mathew Company provided the following data concerning its income statement: sales, $1,000,000; purchases, $400,000; beginning inventory, $250,000; ending inventory, $275,000; operating expenses, $95,000; freight-in, $5,000; sales discounts, $20,000; purchases discounts, $15,000; sales returns & allowances, $120,000; and purchases returns & allowances, $45,000.  The data are complete and provide the basis for preparation of an income statement.  How much is cost of goods sold?

7. (Essay)

Given below are account balances for Clayton Company:

Gross sales, $100,000
Sales returns and allowances, $8,000
Selling expenses, $12;000
Cost of goods sold, $46,000
Interest expense, $3,000

How much is the gross profit margin?

8. (Essay)

Given below are account balances for Aoki Company:

Net sales, $100,000
Administrative expenses, $22,000
Selling expenses, $12;000
Cost of goods sold, $46,000
Interest expense, $3,000

How much is the net profit margin?

9. (Multiple Choice)

The inventory classification on a retailer’s balance sheet may include:

A.   raw materials.
B.   work in process.
C.   ready goods.
D.   All of the above.
E.   None of these.

10. (Multiple Choice)

Inventory accounts are classified in which section of the balance sheet?

A.   Current assets.
B.   Investments.
C.   Property, plant, and equipment.
D.   Intangible assets.
E.   None of these.

11. (Multiple Choice)

Ashton agrees to purchase certain inventory items from Duart.  Duart is to ship the goods F.O.B. destination.  At Ashton’s fiscal year end, Duart called to say that the goods had been shipped and Ashton could expect to receive them within a week.

A.   Ashton should include the goods in inventory.
B.   Ashton should not include the goods in inventory.
C.   Ashton may optionally include the goods in inventory.
D.   Ashton may optionally exclude the goods from inventory.
E.   None of these.

12. (Multiple Choice)

The recorded cost of inventory would include the purchase price plus:

A.   transportation charges incurred by the seller.
B.   interest costs incurred on money borrowed to finance the inventory.
C.   transportation charges incurred by the buyer.
D.   All of these.
E.   None of these.

13. (Multiple Choice)

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