EXAM2 - Dr. M.D. Chase Accounting Principles Code 1...

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Dr. M.D. Chase Accounting Principles Examination 2J Page 1 Code 1 1. The term "net sales" refers to gross sales revenue reduced by sales discounts and transportation-in. a. true b. false 2. The cost of goods available for sale in a given accounting period is equal to the beginning inventory plus the delivered cost of goods purchased during the period minus any purchase discounts and purchase returns and allowances. a. true b. false 3. The Purchases account is used to record the cost of merchandise purchased for resale and the cost of assets acquired for use in the business. a. true b. false 4. In preparing a work sheet for a merchandising business, the figure for ending inventory is entered in the Income Statement credit column and the Balance Sheet debit column. a. true b. false 5. A "cash discount" is called a "purchase discount" by the buying company and "sales discount" by the selling company. a. true b. false 6. All the following accounts normally have "credit" balances except: a. Sales. b. Purchase discounts. c. Accumulated depreciation. d. Sales returns and allowances. 7. Abbott, Inc., sold merchandise to Barco, Inc., for $100,000 with credit terms of 2/10, n/30. Upon inspection of the goods, Barco found that items priced at $10,000 were defective and returned them for full credit to the supplier. Abbott agreed to the return. If Barco, Inc., pays for the remainder of the merchandise within the discount period, the amount of the check issued to Abbott should be: a. $88,200 b. $98,000 c. $88,000 d. $100,000 8. Which of the following lists of accounts is used in computing the cost of goods sold? a. Transportation-in, Purchases, and Inventory. b. Net Sales, Inventory, and Purchases. c. Purchases, Purchase Discounts, and Gross Profit. d. Inventory, Purchases, and Sales Returns and Allowances.
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Dr. M.D. Chase Accounting Principles Examination 2J Page 2 Code 1 9. The beginning inventory of the Tecolote Pro Shop was $120,000. If the cost of goods sold was $390,000 and ending inventory was $85,000, the purchases must have been: a. $185,000 b. $355,000 c. $425,000 d. $595,000 10. In a "periodic" inventory system, "cost of goods sold" is computed as: a. Beginning inventory minus ending inventory. b. Cost of goods available for sale minus ending inventory. c. Beginning inventory plus purchases. d. Beginning inventory plus purchases minus gross profit. 11. Western Shop uses the periodic inventory system and maintains its records on a calendar-year basis. The Inventory account had a debit balance of $55,000 on January 1. During the first four months of the year sales were $72,000, purchases were $44,000, and transportation-in was $2,800. The balance in the ledger account for Inventory at April 30 was: a. $27,000 b. $29,800 c. $99,000 d. $55,000 12. Which of the following amounts would NOT appear in the Income Statement columns of a work sheet for a merchandising company?
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This note was uploaded on 02/25/2010 for the course ACCT 300A taught by Professor Bob during the Spring '10 term at Arizona.

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EXAM2 - Dr. M.D. Chase Accounting Principles Code 1...

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