ACCT 1220 Study Guide - Final Guide: Seasoned Equity Offering, Premium-Rate Telephone Number, Debenture

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4 Apr 2017

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Account for inventory using the perpetual and periodic inventory systems. Merchandising and manufacturing: sales revenue, cost of goods sold, gross profit, operating expenses. Sales revenue is reduced by (contra-revenues accounts: credit card discounts, sales returns and allowances, sales discounts (cash discounts): discounts given to customers to encourage early payment. On the income statement: sales revenue, less: Sales returns and allowances: equals: net sales. Inventory is an asset held for resale or used to produce services and goods for sale. Manufacturing firms have three types of inventory: raw materials, work in process, finished goods. The cost principle requires that inventory be recorded at the price paid plus all costs incurred to bring the inventory to saleable conditions: invoice price, freight and insurance, inspection costs, preparation costs. When customers are sold damaged merchandise, they can either: return the merchandise and receive full refund: sales returns, keep the merchandise, but receive some credit (either reduction in a/r, store credit, or cash): sales allowances.

Related Questions

15 ACCOUNT QUESTIONS! I NEED HELP WITH ASAP! THANK YOU SOMUCH!

1. A company reported total stockholders' equity of $290,000 onits Dec 31, 2015, balance sheet. The following information isavailable for the year ended Dec 31, 2016:

Revenues	$620,000
Expenses	330,000
Liabilities, on December 31, 2016	144,000

3. Samores Company sold merchandise on account for $3,000 toCookie Company with credit terms of 2/10, n/30. Five days later,Cookie Company returned $1,000 of merchandise that was damaged,along with a check to settle the account.

What entry does Samores Company make upon receipt of thecheck?

Select one:

Cash		1,960
Sales Returns and Allowances		1,040
	Accounts Receivable		3,000

Cash		2,000
	Accounts Receivable		2,000

Cash		1,960
Sales Returns and Allowances		1,000
Sales Discounts		40
	Accounts Receivable		3,000

Cash		2,940
Sales Discounts		60
	Accounts Receivable		3,000

What are the total assets of the company on December 31,2016?

Select one:

A. $420,000

B. $184,000

C. $724,000

D. $ 38,000

8. The following inventory was available for sale during theyear for Thomasina Tools:

Beginning inventory	10 units at $80
First purchase	15 units at $110
Second purchase	30 units at $140
Third purchase	20 units at $130

Thomasina Tools has 25 units on hand at the end of the year.

What is the dollar amount of inventory at the end of the yearaccording to the first-in, first-out method?

Select one:

A. $3,300

B. $3,150

C. $3,900

D. $5,950

9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:

Beginning inventory	10 units at $41
First purchase	15 units at $55
Second purchase	30 units at $70
Third purchase	25 units at $65

Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.

What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?

Select one:

A. $4,340

B. $9,920

C. $3,465

D. $6,200

12. Determine Sales revenue for Ozzie Company with the followingdata:

Cost of Goods Sold	$840,000
Operating Expenses	210,000
Sales Discounts	15,000
Sales Returns and Allowances	97,500
Net Income	265,000

Select one:

A. $1,192,500

B. $1,222,500

C. $1,417,500

D. $1,387,500

17. Determine Sales revenue for Ozzie Company with the followingdata:

Cost of Goods Sold	$840,000
Operating Expenses	210,000
Sales Discounts	15,000
Sales Returns and Allowances	97,500
Net Income	265,000

Select one:

A. $1,192,500

B. $1,222,500

C. $1,417,500

D. $1,387,500

18. M. Fields Company reported the following year-endamounts:

Total Sales	$33,600
Sales Discounts	600
Sales Returns	?
Cost of Goods Sold	21,000
Gross Profit	4,350

What is the companyâs Sales Returns for the year?

Select one:

A. $ 7,650

B. $ 2,160

C. $10,860

D. $ 2,970

19. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:

Purchases During Sept 2016		Sales During Sept 2016
Sept 7	120 units @ $224	Sept 12	70 units
Sept 17	70 units @ $176	Sept 22	110 units
Sept 25	100 units @ $168	Sept 29	90 units

What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?

Select one:

A. $22,080

B. $26,480

C. $26,000

D. $28,640

24. On which financial statements would you look to find thetotal costs of merchandise that remains and the total that has beensold?

Select one:

A. Balance sheet and income statement

B. Statement of cash flows and balance sheet

C. Balance sheet and statement of cash flows

D. Statement of stockholders' equity and balance sheet

25. Which statement is true of the statement of stockholders'equity?

Select one:

A. It shows a company's stock issuances and dividends paid toshareholders.

B. It reports a company's assets, liabilities, and equities.

C. It reports a company's cash flows from operating activities,investing activities, and financing activities.

D. It reports a company's revenue and expenses for a period.

26. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:

Purchases During Sept 2016		Sales During Sept 2016
Sept 7	120 units @ $224	Sept 12	70 units
Sept 17	70 units @ $176	Sept 22	110 units
Sept 25	100 units @ $168	Sept 29	90 units

What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?

Select one:

A. $22,080

B. $26,480

C. $26,000

D. $28,640

27. The following hammers were available for sale during theyear for Waiculus Tools:

Beginning inventory	10 units at $80
First purchase	15 units at $100
Second purchase	30 units at $120
Third purchase	25 units at $130

Waiculus Tools has 30 hammers on hand at the end of theyear.

What is the dollar amount of cost of goods sold for the yearaccording to the first-in, first-out method?

Select one:

A. $3,150

B. $3,950

C. $5,300

D. $3,900

29. Nickster Company purchased $8,000 worth of merchandise, FOBshipping point. Transportation costs were an additional $700. Thecompany later returned $1,500 worth of merchandise and paid theinvoice within the 2% cash discount period.

The total amount paid for this merchandise is:

Select one:

A. $7,040

B. $8,526

C. $7,070

D. $7,056

30. The following amounts and costs of platters were availablefor sale by Utah Pottery during 2016:

Beginning inventory	10 units at $82
First purchase	15 units at $110
Second purchase	30 units at $140
Third purchase	25 units at $130

Utah Pottery has 35 platters on hand at the end of the year.

How much is cost of goods sold in dollars at the end of the yearaccording to the weighted-average cost method?

Select one:

A. $5,580

B. $3,465

C. $9,920

D. $3,720

31. Current assets are usually listed in the order of their:

Select one:

A. Lack of liquidity: least liquid to most liquid

B. Size: smallest to largest

C. Liquidity: most liquid to least liquid

D. Size: largest to smallest

34. Which of the following assets would not be classified as acurrent asset?

Select one:

A. Supplies

B. Equipment

C. Accounts receivable

D. Prepaid rent

coralyellowjacket724

17 accounting 1 questions! HELP

9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:

Beginning inventory	10 units at $41
First purchase	15 units at $55
Second purchase	30 units at $70
Third purchase	25 units at $65

Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.

What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?

Select one:

A. $4,340

B. $9,920

C. $3,465

D. $6,200

32. Santa Fe Corporation uses the perpetual inventory method. OnMarch 1, it purchased $60,000 of merchandise inventory, terms 2/10,n/30. On March 3, Santa Fe returned goods (not damaged) that cost$6,000. On March 9, Santa Fe paid the supplier.

On March 9, Santa Fe should credit:

Select one:

A. Purchase discounts for $1,200

B. Purchase discounts for $1,080

C. Inventory for $1,080

D. Inventory for $1,200

33. Rocky Company has beginning equity of $600,000, net incomeof $100,000, dividends of $60,000 and investments by owners inexchange for stock of $20,000. Its ending equity is:

Select one:

A. $660,000

B. $480,000

C. $536,000

D. $446,000

35. On September 1, 2016, Chopper, Inc. reported RetainedEarnings of $272,000. During the month of September, Choppergenerated revenues of $40,000, incurred expenses of $24,000,purchased equipment for $10,000 and paid dividends of $12,000.

What is the balance in Retained Earnings on September 30,2016?

Select one:

A. $272,000 debit

B. $276,000 credit

C. $ 16,000 credit

D. $274,000 credit

36. Savannah Company purchases $120,000 of inventory during theperiod and sells $36,000 of it for $60,000. Beginning of the periodinventory was $6,000.

What is the companyâs inventory balance to be reported on itsbalance sheet at year end?

Select one:

A. $36,000

B. $90,000

C. $ 4,000

D. $ 6,000

37. Assuming rising prices, which method will give the highestdollar value for cost of goods sold on the income statement?

Select one:

A. FIFO

B. Average Cost

C. LIFO

D. All of these give equal values for cost of goods sold

38. Kali Company began the period with $20,000 in inventory. Thecompany also purchased an additional $20,000 of inventory andreturned $2,000 for a full credit. A physical count of theinventory at yearâend revealed an inventory on hand of $16,000.What was Kaliâs cost of goods sold for the period?

Select one:

a. $50,000

b. $22,000

c. $48,000

d. $16,000

39. The periodic inventory system differs from the perpetualinventory system:

Select one:

because the periodic system is not compatible with moderntechnology.

because the periodic system continually updates inventory, whilethe perpetual inventory system only updates inventory at the end ofthe period.

because the perpetual system continually updates inventory,while the periodic inventory system only updates inventory at theend of the period.

because the periodic system is more complex and costly.

40. Which one of the following is included in currentassets?

Select one:

A. Common stock

B. Accounts receivable

C. Taxes payable

D. Automobiles

41. For the balance sheet to be in balance, the following mustexist:

Select one:

Total assets must be less than total liabilities

Total assets must be greater than total liabilities

Total assets must equal total liabilities plus stockholders'equity

Total liabilities must equal total stockholders' equity

43. Using a perpetual inventory system, the buyerâs journalentry to record the freight costs includes a:

Select one:

A. Debit to Purchases

B. Debit to Inventory

C. Debit to Freight In

D. Debit to Cost of Goods Sold

44. Joshua records purchases at invoice price and uses theperpetual inventory system. On July 5, Joshua returned $6,000 ofgoods purchased on account to the seller.

How would Joshua record this transaction?

Select one:

Accounts Payable		6,000
	Purchases		6,000

Accounts Receivable		6,000
	Inventory		6,000

Accounts Payable		6,000
	Inventory		6,000

Cash		6,000
	Purchases		6,000

45. Smith & Sons purchased $5,000 of merchandise from theClaremont Company with terms of 3/10, n/30. How much discount isSmith & Sons entitled to take if it pays within the alloweddiscount period of 10 days?

Select one:

$100

$50

$300

$150

46. The accounting record for Max III Company reported thefollowing selected information:

Operating Expenses	$180,000
Sales Returns and Allowances	52,000
Sales Discounts	24,000
Sales Revenue	700,000
Cost of Goods Sold	268,000

Determine Max III Company's gross profit.

Select one:

A. $332,000

B. $280,000

C. $308,000

D. $356,000

48. Using a a perpetual inventory system, the sellerâs journalentry to record the payment for merchandise, received from thebuyer, within the discount period includes a:

Select one:

A. Debit to Accounts Receivable

B. Debit to Cost of Goods Sold

C. Credit to Sales Discounts

D. Debit to Sales Discounts

49.Geraldoâs Groceries purchased milk cartons at an invoiceprice of $6,000 and terms of 2/10, n/30. On arrival of the goods,Geraldoâs realized that half of the milk was past the expirationdate, and returned them immediately to the supplier.

If Geraldoâs pays the remaining amount of the invoice within thediscount period, the amount paid should be:

Select one:

A. $2,880

B. $5,880

C. $2,940

D. $6,000

50. Which one of the following is not a current liability?

Select one:

A. Wages payable

B. Accounts payable

C. Wage expense

D. Taxes payable

rubymacaw554

12 ACCOUNTING QUESTIONS

4. Using a perpetual inventory system, the buyer'sjournal entry to record the return of merchandise purchased onaccount includes a:

Select one:

A. Credit to Cost of Goods Sold

B. Credit to Accounts Payable

C. Credit to Purchase Returns

D. Credit to Inventory

6.Using a perpetual inventory system, the buyerâsjournal entry to record the payment for merchandise within thediscount period includes a:

Select one:

A. Debit to Accounts Payable

B. Debit to Cost of Goods Sold

C. Debit to Purchases

D. Debit to Inventory

7.Which of the following statements regarding cost flows istrue?

Select one:

Cost of goods available for sale is equal to beginning inventoryminus cost of goods purchased.

CGAS = beginning inventory minus ending inventory.

Cost of goods available for sale is equal to beginning inventoryplus cost of goods purchased.

CGAS = cost of goods sold minus cost of goods purchased.

10. Using a perpetual inventory system, the buyerâsjournal entry to record the purchase of merchandise on creditincludes a:

Select one:

A. Debit to Inventory

B. Debit to Freight In

C. Debit to Cost of Goods Sold

D. Debit to Purchases

11. Which of the following is not shown in thestatement of stockholder's equity?

Select one:

A. Unearned revenue

B. Common stock

C. Retained earnings

D. Dividends

13. Using a perpetual inventory system, the sellerâsjournal entry to record the sale of merchandise on account includesa:

Select one:

A. Debit to Accounts Receivable

B. Credit to Cost of Goods Sold

C. Credit to Purchases

D. Debit to Inventory

14. A merchandising company's multi-step income statementdiffers from that of a service company in what way?

Select one:

A service company does not include a line for cost of goodssold.

A service company has a line for selling expenses whereas amerchandising company does not.

There is no difference.

A merchandising company will have a line for income fromoperations whereas a service company will not.

16.Using a perpetual inventory system, the sellerâs journalentry to record the return, by the buyer, of merchandise purchasedon account includes a:

Select one:

A. Credit to Purchase Returns

B. Debit to Cost of Goods Sold

C. Debit to Accounts Receivable

D. Debit to Sales and Allowances

20. For a firm that uses the perpetual inventory system, theSales Returns and Allowances account:

Select one:

A. Is not a contra account

B. Is not used

C. Is debited by the firm receiving returned goods from acustomer

D. Has a normal credit balance

21. Current assets are cash and other assets that will beconverted into cash or used up within:

Select one:

A. One year

B. The normal operating cycle of the business

C. The normal operating cycle of the business or one year,whichever is longer

D. The normal operating cycle of the business or one year,whichever is shorter

22. The balance sheet format that reports assets first and then,beneath the assets, reports the liabilities and stockholders'equity is called the:

Select one:

A. Account form

B. Report form

C. Stack form

D. Classified form

23. Safari Monkey Company sold $2,400,000 worth of merchandise,had $200,000 returned, and then the balance was received during the2% discount period.

What were the companyâs net sales?

Select one:

A. $1,800,000

B. $1,760,000

C. $2,156,000

D. $2,040,000

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ACCT 1220 Study Guide - Final Guide: Seasoned Equity Offering, Premium-Rate Telephone Number, Debenture

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