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More+Exam+1+Practice+Problems - 77. Cost of goods sold: A)...

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Unformatted text preview: 77. Cost of goods sold: A) B) C) D) E) Is another term for merch andise sales. Is the term us ed for the cost of buying and preparing merchandise for sal e. Is another term for rev enue. Is also called gross margin. Is a term only used by s ervice firms. 78. A comp any had sales of $695,000 and its cost of goods sold of $278,000. Its gross margin equals: A) B) C) D) E) $(417,000). $ 695,000. $ 278,000. $ 417,000. $ 973,000. 79. A comp any had sales of $375,000 and its gross profit was $157,500. Its cost o f goods sold equals: A) B) C) D) E) $(217,000). $ 375,000. $ 157,500. $ 217,500. $ 532,500. 82. A company had expenses other than cost o f goods sold of $51,000. Determine sales and gross profit given cost of goods sold was $25,000 an d net income was $60,000. A) B) C) D) E) Sales: Sales: Sales: Sales: Sal es: $136,000; Gross Profit: $111,000. $136,000; Gross Profit: $85,000. $85,000; Gross Profit: $136,000. $111,000; Gross Profit: $136,000. $60,000; Gross Profit: $25,000 . 106. A comp any uses the perp etual inventory system and recorded the following entry: Accounts Pay able ................................................ Merchandise Inv entory ............................ Cash This entry reflects a: A) B) C) D) E) Purchase. Return. Sale. Payment of the account payable and recognition of a cash discount taken. Purchase and recognition of a cash discount taken. 2,500 50 2,450 107. A debit memorandum is: A) B) C) D) Required wh enever a journal entry is recorded. The source document for the purchase of merchandise i nventory. Required wh en a purch ase discount is granted. The document a buyer issues to inform the seller of a d ebit made to the s eller's account in the buy er's reco rds. E) Not necessary in a perpetual inventory system. 109. A comp any purch ased $7,500 worth of merch andise. Transportation costs were an additional $80. The comp any later return ed $900 wort h of merchandise and paid the invoice within the 3 % cash discount period. The total amount paid for this merchandise is: A) B) C) D) E) $6,479.60. $6,482.00. $7,275.00. $7,355.00. $6,680.00. 114. Sales returns: A) B) C) D) E) Refer to merchandise that customers return to the seller after the sal e. Refer to reductions in the selling price of merchandise sold to customers. Repres ent cash discounts. Repres ent trade discounts. Are not record ed under the perpetual inventory system until the end of each accounting period. 116. A debit to Sales Returns and Allowan ces and a credit to Accounts Receivable: A) B) C) D) E) Reflects an increase in amount due fro m a customer. Recognizes that a customer returned merchandise and/or received an allo wance. Requires a debit memorandu m to recognize the customer's return. Is reco rded wh en a customer tak es a discount. All of the abov e. 120. On October 1, Robertson Comp any sold merch andise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. Th e cost o f the items so ld is $4,000. Robertson uses the perpetual inventory system. Alberts pays the invoice o n October 8 , and takes the appropriate discount. The journ al entry that Robertson makes on October 8 is: A) Cash ...................................................................... Accounts receivable .................................... B) Cash ...................................................................... Accounts receivable .................................... C) Cash ...................................................................... Sales discounts ..................................................... Accounts receivable .................................... D) Cash ...................................................................... Accounts receivable .................................... E) Cash ...................................................................... Sales discounts ..................................................... Accounts receivable .................................... 5,684 116 5,800 5,684 5,684 3,920 80 4,000 4,000 4,000 5,800 5,800 ...
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This note was uploaded on 01/22/2011 for the course MGT 11A taught by Professor Armstrong during the Fall '08 term at UC Davis.

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