Exam 2 Practice Questions - Acct 2001 Exam 1 Practice...

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Acct 2001 Exam 1: Practice Questions Page 1 of 7 Chapter 5 1. Under the perpetual system when goods previously sold on account are returned to the seller, the seller should: a. Debit accounts receivable b. Debit accounts payable c. Debit sales returns and allowance d. Credit 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?
Acct 2001 Exam 1: Practice Questions Page 2 of 7 8. Horizon, Inc. purchased merchandise on account. Subsequently, Horizon paid for the merchandise within the discount period. What journal entry would Horizon make using the perpetual method?
9. Income from Operations is: a. Gross Profit Operating Expenses Income Taxes b. Gross Profit Income Taxes c. Net Sales Cost of Goods Sold d. Gross Profit Operating Expenses
10. Profit Margin Ratio is calculated as:
11. Journalize the following transactions using the perpetual inventory system: June 3 Purchased goods of $5,000. Credit terms were 3/15 n 30. June 9 Returned 20% of the inventory purchased on June 3. June 17 Paid supplier for goods purchased on June 3. June 18 Sold inventory on credit terms 2/10 n/30, $2,000 (cost $1,180). June 22 Received damaged goods from customer of the June 18 sale, $800 (cost, $480).
Acct 2001 Exam 1: Practice Questions Page 3 of 7 Chapter 6 12. When legal title of goods remains with the seller until the goods reach the buyer the terms are __________ and the ___________ has legal title.

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