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Quiz 5

  1. A net income always results when

    1. the cost of goods sold exceeds operating expenses.
    2. revenues exceed the cost of goods sold.
    3. revenues exceed operating expenses.
    4. the gross margin from sales exceeds operating expenses.

  2. A sale is made on June 1 for $200, terms 2/10, n/30, on which a sales return of $50 is granted on June 7. The dollar amount received for payment in full on June 9 is:

    1. $200.
    2. $150.
    3. $147.
    4. $196.

  3. If beginning and ending merchandise inventories are $400 and $700, respectively, and the cost of goods sold is $3,400, net purchases:

    1. are $3,700.
    2. are $3,400.
    3. are $3,100.
    4. cannot be determined.

  4. The entry to record the payment within the discount period for a purchases of $1,000 under terms of 2/10, n/30 on which a purchase return of $300 was made would include a credit to Cash for:

    1. $980.
    2. $700.
    3. $686.
    4. $680.

  5. A purchase of merchandise for $750 including freight of $50 under terms of 2/10, n/30, FOB shipping point would include a:

    1. debit to Freight In of $50.
    2. debit to Purchases of $750.
    3. credit to Accounts Payable of $700.
    4. credit to Freight Payable of $50.

  6. Which of the following accounts is used only under the net method of recording purchases?

    1. Purchases Returns and Allowances
    2. Purchases Discounts Lost
    3. Purchases
    4. Purchases Discounts

  7. Under which of the following inventory systems would be a wholesaler most likely know the exact quantity in inventory of a particular item on hand in the middle of a month?

    1. Periodic inventory system
    2. Perpetual inventory system
    3. Either the periodic or the perpetual inventory system
    4. Neither the periodic nor the perpetual inventory system

  8. Samuel’s Company shows a beginning merchandise inventory of $12,000 and an ending merchandise inventory of $14,000. Under the periodic inventory system, what is the balance of the Merchandise Inventory account at the end of the accounting period before and after the adjusting and closing entries?

    1. $12,000 and $14,000
    2. $14,000 and 12,000
    3. $14,000 and $14,000
    4. $12,000 and $12,000

  9. The closing entries for a merchandising concern would contain a debit to:

    1. Sales Discounts.
    2. Purchases.
    3. Freight In.
    4. Purchases Discounts.

  10. Which of the following appears as an operating expense on the income statement of a merchandising concern?

    1. Freight In
    2. Freight Out
    3. Sales Returns and Allowances
    4. Purchases Returns and Allowances

 

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