PRACTICE EXAM AND ANSWERS
covering Chapters 6 and 8
ABC Toys received an order from a customer on March 1.
The toys were shipped
on March 18.
The customer sent a check for full payment on April 10.
received the check on April 12 and deposited it in the bank account.
ABC should record
sales revenue related to this series of transactions on
None of the above is correct
A company had the following partial list of account balances at year-end:
Sales Returns and Allowances
Sales Discounts (a contra account)
Allowance for Doubtful Accounts
Bad Debt Expense
The amount of Net Sales shown on the income statement would be
When goods are sold on credit, revenue usually should be recognized at the date
receipt of the sales order
passage of title from the seller to the buyer
receipt of the goods by the buyer
manufacture of the goods
cash collection of the sales price
Birdman Co. reported the following data at year-end.
Sales, $200,000; beginning
inventory, $10,000; ending inventory, $8,000; cost of goods sold, $120,000; and
gross margin, $80,000.
What was the amount of merchandise purchased during
None of the above