ach_test_3 - Achievement Test 3: Chapters 5 and 6 Financial...

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Achievement Test 3: Chapters 5 and 6 Name _________________________ Financial Accounting Instructor ______________________ Section # _______ Date _________ Part I II III IV V Total Points 45 25 12 10 8 100 Score PART I — MULTIPLE CHOICE (45 points) Instructions Designate the best answer for each of the following questions. ____ 1. When a customer returns goods for credit, the seller should a. credit Accounts Payable. b. credit Accounts Payable. c. debit Accounts Receivable. d. credit Merchandise Inventory ____ 2. Credit terms of 3/10, n/30 mean that a(n) a. 10% cash discount may be taken if payment is made immediately; a 3% discount if paid within 30 days. b. 3% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due within 30 days. c. 3% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due at the end of the month. d. additional amount equal to 3% of the invoice price must be paid if payment is not received within 10 days; the account is overdue after 30 days. ____ 3. A periodic inventory system a. allows for the determination of cost of goods sold after each sale. b. requires a physical inventory count to determine the cost of goods on hand. c. requires that detailed inventory records be kept. d. requires the use of a cost of goods sold account. ____ 4. In accordance with the revenue recognition principle, sales revenues are recorded when a. earned, which typically occurs when the goods are transferred from the seller to the buyer. b. cash is received from the customer for items already delivered. c. an order is received from a customer with delivery of the product expected to take place within the next 30 days. d. the accountant determines which period's income statement "needs" more revenue.
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Test Bank for Financial Accounting: Tools for Business Decision Making, Fourth Edition AT3-2 ____ 5. The inventory turnover ratio is computed by dividing a. cost of goods sold by average inventory. b. cost of goods sold by ending inventory. c. sales by ending inventory. d. sales by average inventory. ____ 6. Which of the following items would appear in the income statement of both a merchandising company and a service company? a. Cost of goods sold b. Gross profit c. Operating expenses d. Sales ____ 7. Freight terms of FOB destination point mean that the a. buyer must bear the freight costs. b. seller must debit freight out.
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This note was uploaded on 12/05/2009 for the course ACCT 2102 taught by Professor Constable,d during the Fall '08 term at Georgia Perimeter.

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ach_test_3 - Achievement Test 3: Chapters 5 and 6 Financial...

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