3-Chapter 3 Practice Questions - BB

3-Chapter 3 Practice Questions - BB - Chapter 3 Review...

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Chapter 3 Review Questions 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? a. $5,100. b. $5,300. c. $4,900. d. $5,200. 2. A company with a perpetual inventory system purchases 2,000 items of inventory for $50 per item. The goods are shipped FOB destination. The freight cost is $1,000. The company then sells 1,100 items for $70 per item. These goods are shipped FOB destination at a cost of $450. Assuming that these are the only events that take place during this accounting period, what is the value of inventory on hand at the end of the accounting period? a. $23,000 b. $45,550 c. $44,000 d. $45,000 3. X Co. purchased $2,000 of inventory on account. This inventory was sold for $3,000 cash. The amount of gross margin reported on the income statement and the amount of net cash
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This note was uploaded on 02/10/2011 for the course ACC 201 taught by Professor Cromartie during the Spring '11 term at UNC Greensboro.

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3-Chapter 3 Practice Questions - BB - Chapter 3 Review...

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