Acct 2001 Exam 1: Practice Questions Page 1 of 8 Chapter 5 1. Under the perpetual system when goods previously sold on account are returned to the seller, the seller should: This is a sales return transaction a. Debit accounts receivable Credit A/R b. Debit accounts payable Use for purchase transaction. c. Debit sales returns and allowance d. Credit inventory Debit Inventory
2. Gross Profit is:
3. On June 2, ABC Company sold merchandise to XYZ Company for $2,000 with terms 2/15, n/30. XYZ Company returns damaged goods of $600. On June 16 ABC receives a check from XYZ to settle the account. What is the amount of the check?
4. Which of the following is notcorrect regarding the perpetual inventory system?
5. Sales returns and allowances and sales discounts are: a. Sales accounts b. Liability accounts c. Expense accounts d. Contra revenue accounts
6. Under the perpetual inventory system, purchases of merchandise for sale are recorded in an account called:
7. Which of the following would not be considered an operating expense?
Expenses on Multi-Step Income Statement include: Cost of Goods Sold Operating Expenses Non-Operating Expenses Income Tax Expense