ACCT 2100 Chap 3 Practice Quiz

ACCT 2100 Chap 3 Practice Quiz - ACCT 2100 Chap 3 Practice...

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ACCT 2100 Chap 3 Practice Quiz CORRECT Which of the following are examples of merchandising businesses? A) General Electric, Wal-Mart, Best Buy B) Ford, Safeway, Macy's C) Sears, Sam's Club, Home Depot D) Apple, Hershey Corporation, Albertson's Feedback:  Merchandising businesses generate revenue by selling goods. They buy the merchandise from suppliers,  hold it for resale, and then sell the goods to end users, which includes consumers as well as other  businesses. The other businesses listed (General Electric, Ford, Apple, Hershey) are examples of  manufacturing businesses.  LO: LO1 CORRECT Lionsclaw, Inc., which operates a perpetual inventory system, incurred the following transactions  during the 2009 fiscal year:  a. At January 1, the company had no inventory of washers  b. The company purchased 3,000 washers for $300 each.  c. Lionsclaw sold 2,000 washers for $500 each  d. Given that these are the only events occurring in 2009, what is the value of inventory as of the  end of 2009? A) $300,000 B) $600,000 C) $1,000,000 D) $900,000 Feedback:  Under the perpetual system, the company purchased 3,000 items for $300 each, totaling $900,000. The  company sold 2,000 of these items for $500 each. The cost of these items was $300 each. Therefore, the  value of the 2,000 items sold was $600,000 (2,000 x $300). This will leave $300,000 in inventory as of the  end of the year.  LO: LO 1, 2 CORRECT A company that operates a perpetual inventory system purchases 1,000 items of inventory for  $40 per item. The goods are shipped FOB shipping point. The freight cost is $800. What is the  per unit value of inventory as a result of this transaction? A) $40.00 B) $40.50 C) $40.08 D) $30.92 Feedback: 
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When goods are purchased and shipped with terms FOB shipping point this means that title has  transferred at the moment the goods were shipped. Therefore, the purchaser is responsible for the  transportation charges. Under the perpetual inventory system, the goods are recorded in the inventory 
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This note was uploaded on 02/05/2012 for the course ACCT 2100 taught by Professor Smith during the Spring '08 term at Kennesaw.

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ACCT 2100 Chap 3 Practice Quiz - ACCT 2100 Chap 3 Practice...

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