ACIS_2115_Quiz_5 - ACIS 2115 Quiz 5 1. ABC Co. purchased...

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ACIS 2115 Quiz 5 1. ABC Co. purchased $5,000 of inventory on account with payment terms of 2/10, n/30. The goods were delivered FOB shipping point. ABC paid freight costs of $200 in cash. ABC paid for the goods within the discount period. Assuming a beginning inventory balance of zero, what would be the balance in the inventory account after the purchase and payment for inventory were recorded? ABC Co. keeps perpetual inventory records and uses the net method of accounting for inventory purchases. A. $5,200. B. $5,100. C. $5,000 D. $4,900. E. $4,700. 2. X Co. purchased $2,000 of inventory on account. This inventory was sold for $3,000 cash. X Co. also paid operating expenses of $500 in cash. The amount of gross margin reported on the income statement and the amount of net cash inflow from operating activities reported on the statement of cash flows would be A. $500 / $500. B. $500 / $2,500. C.
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This note was uploaded on 04/01/2008 for the course ACIS 2115 taught by Professor Jayardley during the Spring '07 term at Virginia Tech.

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