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Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system.
Determine the cost assigned to ending inventory using LIFO.
 
 
Date                                      Activities                                             Units Acquired at Cost                   Units Sold at Retail
May 1                   Beginning Inventory                       270 units                                                             @ $12    
5                                             Purchase                                             280 units                                                             @ $14    
10                                          Sales                                                     200 units                                                             @ $22
15                                           Purchase                                             160 units                                                             @ $15    
24                                          Sales                                                      150 units                                                             @ $23
 
Multiple Choice
 
    $5,200
    $4,840
    $9,560
    $4,360
    $4,510
 
LIPO = last in, first out purchased units - sold units ans. $5,200
   
On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements.
The following information is available:
 
Beginning inventory, January 1: $5,700
Net sales: $86,000
Net purchases: $84,000
 
The company's gross margin ratio is 25%. Using the gross profit method, the estimated ending inventory value would be:
 
    $25,200.
    $89,700.
    $64,500.
    $21,500.
    $21,000
 
Net sales x 100% - gross margin ratio 86000 x .75 ans. 64500
   
Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system.
Determine the cost assigned to cost of goods sold using LIFO.
 
Date                      Activities                             Units Acquired at Cost   Units Sold at Retail
May       1             Beginning Inventory       270 units                                             @ $12    
5             Purchase                             280 units                                             @ $14    
10           Sales                                      200 units                                             @ $22
15           Purchase                             160 units                                             @ $15    
24           Sales                                      150 units                                             @ $23
 
    $4,360
    $4,840
    $4,510
    $5,200
    $5,050
 
LIPO = last in, first out ans. $5,050
   
A company had the following purchases during its first year of operations:
 
                Purchases
January:               24 units at $115
February:             34 units at $126
May:     29 units at $138
September:         26 units at $146
November:          24 units at $156
 
 
On December 31, there were 45 units remaining in ending inventory. These 45 units consisted of 6 from January,
7 from February, 11 from May, 5 from September, and 16 from November. Using the specific identification method, what is the cost of the ending inventory?
 
    $5,440.
    $6,316.
    $5,434.
    $6,160.
    $6,472
   
Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system.
Determine the cost assigned to cost of goods sold using FIFO.
 
 
Date                      Activities                                             Units Acquired at Cost   Units Sold at Retail
May       1             Beginning Inventory                       270 units @                                        $12         
5             Purchase                                             280 units @                                        $14         
10         Sales                                                       200 units @                                        $22
15           Purchase                                             160 units @                                        $15         
24          Sales                                                     150 units @                                        $23
 
    $5,200
    $4,360
    $4,510
    $4,840
    $5,050
 
FIFO = first in, first out ans. $4,360
   
A company had inventory on November 1 of 5 units at a cost of $14 each.
On November 2, they purchased 15 units at $16 each. On November 6 they purchased 11 units at $19 each.
On November 8, 13 units were sold for $49 each. Using the LIFO perpetual inventory method,
what was the value of the inventory on November 8 after the sale?
A company had inventory on November 1 of 5 units at a cost of $18 each. On November 2, they purchased 11 units at $20 each.
On November 6 they purchased 7 units at $23 each. On November 8, 11 units were sold for $53 each. Using the LIFO perpetual inventory method,
what was the value of the inventory on November 8 after the sale?
 
 
November 1           5 units $14 each
November 2,        15 purchased $16 each. On November 6      11 purchased units at $19
November 8,        13 sold for $49 each. Using the
 
November 1 of 5 units at a cost of $18 each.
On November 2, they purchased 11 units at $20 each.
On November 6 they purchased 7 units at $23 each.
On November 8, 11 units were sold for $53 each
 
LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?
 
    $321
    $278
    $292
    $266
    $279
   
Grays Company has inventory of 19 units at a cost of $7 each on August 1. On August 3, it purchased 29 units at $9 each.
21 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 21 units that were sold?
 
Grays Company has
August 1     inventory of 19 units at $7
August 3, purchased 29 units at $9 each.
August 6 sold 21 units
 
Grays Company has inventory of 30 units at a cost of $11 each on August 1. On August 3, it purchased 40 units at $12 each.
32 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 32 units that were sold?
 
August 1 inventory of 30 units at a cost of $11
August 3, it purchased 40 units at $12 each
32 units are sold on August 6
 
    $155.
    $399.
    $151.
    $157.
    $128.
   
Jammer Company uses a weighted average perpetual inventory system and reports the following:
                                 
August 2              Purchase              21 units at $17.00 per unit.
August 18            Purchase              23 units at $17.00 per unit.
August 29            Sale                        42 units.
August 31            Purchase              26 units at $20.00 per unit.
 
 
What is the per-unit value of ending inventory on August 31? (Round your per unit answers to 2 decimal places.)
 
    $20.00
    $17.00
    $19.79
    $17.00
    $21.14
 
21 + 23 = 44 - 42 = 2
2 x 17 = (34) + 26 x 20 = 554/28 $19.79
   
Hull Company reported the following income statement information for the current year:
                                                 
Sales                                      $             426,000                
Cost of goods sold:                                           
Beginning inventory       $             156,000                
Cost of goods purchased                                              289,000                
Cost of goods available for sale                 445,000                
Ending inventory                                                             160,000                
Cost of goods sold                                                           285,000                
Gross profit                        $             141,000                
 
The beginning inventory balance is correct. However, the ending inventory figure was overstated by $36,000. Given this information, the correct gross profit would be:
 
    $120,000.
    $177,000.
    $118,000.
    $141,000.
    $105,000
 
Sales + Ending inventory - Cost of goods purchases + Ending inventory
gross profit - overstated amount
141,000 – 360,00 = 105,000
   
A company had beginning inventory of 11 units at a cost of $20 each on March 1.
On March 2, it purchased 11 units at $34 each. On March 6 it purchased 5 units at $25 each.
On March 8, it sold 25 units for $68 each. Using the FIFO perpetual inventory method, what was the cost of the 25 units sold?
 
 
March 1 beginning inventory 11 units at $20
March 2, purchased 11 units at $34 March 6 it purchased 5 units at $25
March 8, it sold 25 units for $68
 
FIFO perpetual inventory method, what was the cost of the 25 units sold?
 
    $540
    $594
    $719
    $669
    $625
   
Bedrock Company reported a December 31 ending inventory balance of $414,500. The following additional information is also available:
 
The ending inventory balance of $414,500 included $73,700 of consigned inventory for which Bedrock was the consignor.
The ending inventory balance of $414,500 included $25,400 of office supplies that were stored in the warehouse and were to
be used by the company's supervisors and managers during the coming year.
 
 
The ending inventory balance of $414,500 included $73,700 of consigned inventory for which Bedrock was the consignor.
The ending inventory balance of $414,500 included $25,400 of office supplies that were stored in the warehouse and were
to be used by the company's supervisors and managers during the coming year.
 
Based on this information, the correct balance for ending inventory on December 31 is:
 
    $359,400
    $241,000
    $303,000
    $340,100
    $389,100
   
Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method.
 
                                 
June 1   Beginning inventory        14 units at $20 each
June 15                 Sale of 6 units for $50 each           
June 29                 Purchase              6 units at $25 each
 
The cost of the ending inventory is:
 
Multiple Choice
 
    $350
    $120
    $150
    $280
    $310
   
Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $100,000 in sales during the second quarter of this year.
If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter, its estimated ending inventory by the gross profit method is:
 
$30,000.
$21,000.
$20,000.
$18,000.
$27,000.
 
Gross profit ratio = Gross profit/ Sales
30% = Gross profit/ $100000
Gross profit = $100000 x 30%
Gross profit = $100000 x 0.30
Gross profit = $30000
Step 2- Calculating Cost of Goods sold (COGS):
Sales - COGS = Gross profit
$100000 - COGS = $30000
COGS = $100000 - $30000
COGS = $70000
Step 3- Calculating Ending Inventory:
COGS = Beginning inventory + Inventory purchases - Ending inventory
$70000 = $18000 + $72000 - Ending inventory
$70000 = $90000 - Ending inventory
Ending inventory = $90000 - $70000
Ending inventory = $20000
   
A company’s inventory records report the following:
 
August 1              Beginning balance            18 units @ $8
August 5              Purchase              13 units @ $7
August 12            Purchase              17 units @ $8
 
On August 15, it sold 36 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?
 
    $288
    $576
    $372
    $96
    $116
 
FIFO perpetual inventory method
ans. $96
   
Giorgio had cost of goods sold of $9,637 million, ending inventory of $2,305 million, and average inventory of $2,181 million. Its inventory turnover equals:
 
    4.42.
    82.6 days.
    4.18.
    87.3 days.
    0.24
 
inventory turnover = COGS/average inventory $9,637/2,181 = 4.42
   
On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available:
 
Beginning inventory, January 1: $4,300
Net sales: $43,000
Net purchases: $44,000
 
The company's gross margin ratio is 15%. Using the gross profit method, the cost of goods sold would be:
 
    $4,300.
    $5,300.
    $26,950.
    $22,650.
    $36,550
 
Net sales x 100% - gross margin ratio
1 - 0.15 x 43000
   
Salmone Company reported the following purchases and sales for its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using LIFO.
 
Date                                      Activities                             Units Acquired at Cost   Units Sold at Retail
May       1                             Beginning Inventory       180 units                                             @ $13    
5                             Purchase                             235 units                                             @ $15    
10                         Sales                                      155 units                                             @ $23
15                           Purchase                             115 units                                             @ $16    
24                         Sales                                      105 units                                             @ $24
 
    $3,690
    $4,005
    $4,015
    $3,700
    $3,540
   
Use the following information for Shafer Company to compute inventory turnover for year 2.
 
             Year 2                                     Year 1     
Net sales             $                             648,000                               $583,000              
Cost of goods sold                           388,600                                 360,850              
Ending inventory                             77,800                   79,480                
 
Multiple Choice
 
    8.33
    4.09
    5.94
    7.34
    4.94
 
Net sales                              $656,000            $584,600              
Cost of goods sold            390,200               361,010                
Ending inventory              79,400 81,080
 
 
388600 / (77800 + 79480 / 2) = 4.94
   
Salmone Company reported the following purchases and sales of its only product.
Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.
 
Date                      Activities                             Units Acquired at Cost   Units Sold at Retail
May 1                   Beginning Inventory       230 units                                             @ $18    
5             Purchase                             260 units                                             @ $20    
10         Sales                                       180 units                                             @ $28
15           Purchase                             140 units                                             @ $21    
24         Sales                                       130 units                                             @ $29
 
Multiple Choice
 
    $12,280
    $5,950
    $6,330
    $6,540
    $5,740
   
Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to the ending inventory using FIFO.

Date                      Activities                             Units Acquired at Cost   Units Sold at Retail
May 1    Beginning Inventory       dr            150 units                                             @ $10.00
5              Purchase                             dr            220 units                                            @ $12.00
10           Sales                                     cr            140 units                                             @ $20.00
15           Purchase                             dr            100 units                                             @ $13.00
24           Sales                                     cr            150 units                                             @ $21.00

$3,180
$2,100
$2,260
$3,580
$1,860
$2,260

(80 * $12 = $960) + (100 * $13 = $1,300) = $2,260
 
   
Beckenworth had cost of goods sold of $10,621 million, ending inventory of $3,289 million, and average inventory of $2,085 million.
Its days' sales in inventory equals: (Use 365 days a year.)
 
80.9
 
Days' Sales in Inventory = Ending Inventory/Cost of Goods Sold x 365
2,089 / 9,421 x 365 = 80.9 days
   
An accounts receivable results from the sale of:
a) the firm's common stock
b) goods and services to customers on account
c) property, plant, and equipment for cash
d) goods and services to customers for cash
   
Accounts receivable are reported at:
a) market value
b) weighted average cost
c) net realizable cost
d) historical cost
   
In an inflationary economic environment, the selling price set for a firm's products will:
a) be higher if FIFO is used than if LIFO is used
b) be higher is LIFO is used than if FIFO is used
c) be derived from the weighted average cost of inventory
d) not be affected by the cost flow assumption used
   
Bad debt expense is recognized in the same accounting period as the revenue that is related to the receivable because:
a) the accounts receivable asset should be stated at original cost
b) all costs incurred in the current period should be subtracted from current period revenues
c) revenues should be stated at realizable value
d) the exact amount of the losses from bad debts is known
   
If an organization purchases $700 of supplies on account, with terms of 2/15, n50:
a) $698 must be paid within 50 days of the invoice date
b) $686 can be paid within 15 days of the invoice date, or $714 must be paid within 50 days of the invoice date
c) $686 can be paid within the 15 days of the invoice date, or $700 must be paid within 50 days of the invoice date
d) $650 must be paid within 15 days of the invoice date
   
When an uncollectible amount receivable is written off against the allowance for bad debts:
a) total current assets are not affected
b) total current assets decrease and expenses increase
c) current assets decrease and expenses are not affected
d) total current assets decrease and expenses decrease
   
The principal reason for reconciling the cash balance per books with balance shown on the bank statement is to:
a) satisfy generally accepted accounting principles
b) determine the amount of cash in the account actually available to the entity
c) verify the amount of pet cash on hand
d) determine whether or not the entity has issued an NSF check
   
A firm has used LIFO for several years during which costs have trended higher. The effect on 2011 net income using LIFO, relative to FIFO, will be:
a) net income for 2011 will be less under LIFO than FIFO
b) can't tell from the information given
c) net income for 2011 will be greater under LIFO than FIFO
d) net income for 2011 will be the same under LIFO as under FIFO
   
The allowance for uncollectible accounts is a(n):
a) contra current asset
b) asset
c) contra revenue
d) expense
   
One of the principle reasons for selecting the LIFO cost flow assumption instead of the FIFO cost flow assumption in an inflationary economic environment is that:
a) a higher selling price can be established
b) income taxes will be lower
c) balance sheet inventory values will be higher
d) net income will be higher
b) income taxes will be lower
   
The current assets of most companies are usually made up of:
a) assets that are currently used in the operations of the company
b) cash and assets expected to be converted to cash within one year
c) cash, marketable securities, and accounts and notes receivable
d) a very small proportion (less than 10%) of the total assets of the entity
   
When costs are rising over time:
a) FIFO results in higher profits than LIFO
b) Costs of goods sold using the weighted average method will be greater than LIFO cost of goods sold
c) ending inventory balances will be greater under LIFO
d) LIFO results in higher profits than FIFO
   
Which of the following inventory accounting systems has been made much more feasible as a result of computer systems developments?
a) just-in-time
b) perpetual
c) periodic
d) physical
   
A cash equivalent is a current asset that:
a) will be converted to cash within one year
b) will be converted to cash within one month
c) is readily convertible into cash with a minimal risk
d) is readily convertible into cash with a substantial risk
e) none of the above
   
A merchandiser
earns net income by buying and selling merchandise
   
Cost of Goods Sold
Is the term used for the expense of buying and preparing merchandise for sale.
   
Which of the following statements regarding gross profit is not true?
Gross profit is not calculated on the multi-step income statement
   
Merchandise inventory
is a current asset
   
The current period's ending inventory is:
The next period's beginning inventory
   
Beginning inventory plus the net purchases is:
Merchandise (goods) available for sale
   
The Acid-test ratio:
Is also called the quick ratio.
   
Quick assets are defined as:
Cash, short-term investments, and current receivables.
   
KLM Corporation's quick assets are $5,888,000, its current assets are $11,700,000 and its current liabilities are $8,000,000. Its acid-test ratio equals:
0.74
   
Liquidity problems are likely to exist when a company's acid test ratio
Is substantially lower than 1
   
The acid-test ratio differs from the current ratio in that
Prepaid expenses and inventory are excluded from the calculation of the acid-test ratio
   
Using the following year-end information for Calvin's Clothing, calculate the current ratio and acid-test ratio for the business
3.50 and 0.90
   
The gross margin ratio:
Indicates the percent of sales revenue remaining after covering the cost of the goods sold.
   
A company's gross profit (or gross margin) ws $83,750 and its net sales were $347,800. Its gross margin is:
24.1%
   
The credit terms 2/10, n/30 are interpreted as
2% cash discount if the amount is paid within 10 days, or the balance due in 30 days.
   
Jasper Company is a wholesaler that buys merchandise in large quantities.
Its supplier's catalog indicates a list price of $500 per unit on merchandise Jasper intends to purchase,
and offers a 30% trade discount for large quantity purchases.
The cost of shipping for the merchandise is $7 per unit.
Jasper's total purchase price per unit will be:
$357
   
A company uses the perpetual inventory system and recorded the following entry:

Accounts Payable                            2,500
Merchandise inventory                 50
Cash                                                                      2,450

This entry reflects a:
 
Payment of the account payable less 2% cash discount taken
   
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:
$1,568
   
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. on July 28, it paid the full amount due =. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is:
debit Accounts payable $200
credit merchandise inventory $200
   
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 28 is:
Debit Accounts Payable $1,600
credit Cash $1,800
   
A company purchased $4,000 worth of merchandise. Transportation costs were an additional $350. The company returned $275 worth of merchandise and then paid the invoice within the 2% cash discount period. The total cost of this merchandise is:
$4,000.50
   
Sales less sales discounts less sales returns and allowances equals:
Net sales
   
A company records the following journal entry: debit Cash $1,470, debit Sales Discounts $30, and credit Accounts Receivable $1,500. This means that a customer has taken what percentage cash discount for an early payment.
2%
   
Prentice Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Prentice's net sales for this period equal:
$176,025
 
Based on the above information, the amount that Plunkett should report in ending inventory on December 31 is:
$156,000
   
The LIFO conformity rule:
Requires when LIFO is used for tax reporting, it is also used for financial reporting.
   
the selected inventory costing method impacts
Gross profit and ending inventory
   
Which of the following inventory costing methods will always result in the same values for ending inventory and cost of goods sold regardless of whether a perpetual or periodic inventory system is used for:
Specific Identification and FIFO
   
The understatement of the ending inventory balance causes:
Cost of goods sold to be overstated and net income to be understated.
   
Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows:

Year 1                    Year 2

Beginning inventory                                       $120,000             $130,000
Cost of goods purchased                              250,000               275,000
Cost of goods available for sale                 370,000               405,000
Ending inventory                                             130,000               135,000
Cost of goods sold                                           $240,000             $270,000

Lucia Company made two errors:
1) ending inventory at the end of Year 1 was understated by $15,000 and
2) ending inventory at the end of Year 2 was overstated by $6,000. Given this information, the correct cost of goods sold figure for Year 2 would be:
$291,000
$276,000
$264,000
$285,000
$249,000
   
Hull Company reported the following income statement information for the current year:

Sales                                                                      $410,000
Cost of Goods sold:                                         $132,000
Beginning inventory                                       $273,000
Cost of Goods available for sale                405,000
Ending inventory                                             144,000
Cost of goods sold                                           261,000
Gross profit                                                        $149,000


The beginning inventory balance is correct. However, the ending inventory figure was overstated by $20,000. Given this information, the gross profit would be:
 
$129,000
   
The inventory turnover ratio:
Reveals how many times a company sells its merchandise inventory during a period.
   
Days' sales in inventory is calculated as:
Ending inventory divided by cost of goods sold times 365
   
Giorgio had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. Its inventory turnover equals:
4.79
   
Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. Its days' sales in inventory equals: (Use 365 days a year.)
80.9 days
   
The inventory valuation method that identifies each item in ending inventory with purchase and invoice is the:
Specific identification method
   
A company had the following purchases and sales during its first month of operations:


January 1             Purchased           10 Units               at $4.00 per unit
January 9             Sold                       6 units                  at $12.00 per unit
January 17          Purchased           8 units                  at $5.50 per unit
January 27          Sold                       7 units                  at $12.00 per unit


Using the perpetual weighted average method, what is the value of cost of goods sold?
 
$59.00
   
A company's inventory records report the following

August 1 Beginning Balance 15 units @ $12
August 5 Purchase 10 units @ $13
August 12 Purchase 20 units @ $14
On August 15, it sold 20 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?
 
$210
   
A company's normal selling price for its product is $20 per unit. However, due to market competition, the selling price has fallen $15 per unit. This company's current FIFO inventory consists of 200 units purchased at $16 per unit. Net realizable value has fallen to $13 per unit. Calculate the value of this company's inventory at the lower of cost or market.
 
$2,600
   
A company's current LIFO inventory consists of 5,000 units purchased at $6 per unit.
Replacement cost has now fallen to $5 per unit.
What is the entry the company must record to adjust inventory to market.
 
Debit cost of goods sold $5,000
credit Merchandise inventory $5,000.
   
On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. the following information is available:

Beginning inventory, January 1: $4,000
Net Sales: $80,000
Net purchases: $78,000

The company's gross margin ratio is 25%. Using the gross profit method, the estimated ending inventory value would be:
 
$60,000
   
Avanti purchases inventory from overseas and incurs the following costs:
the merchandise cost is $50,000, credit terms 2/10, n/30 that apply only to the $50,000;
FOB shipping point freight charges are $1,500; insurance during transit is $500;
and import duties are $1,000.
Avanti paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions.
 
Compute the cost that should be assigned to the inventory.
 
$52,000
   
Salmone Company reported that the following purchases and sales of its only product.
Salmone uses a perpetual inventory system. determine the cost assigned to the ending inventory using LIFO.

Date                      Activities                                             Units Acquired at Cost   Units sold at Retail
May
1                             Beginning Inventory                       150 units                                             @ $10.00
5                             Purchase                                             220 units                                             @ $12.00
10                           Sales                                                      140 units                                             @ $20.00
15                           Purchase                                             100 units                                             @ $13.00
24                           Sales                                                      90 units                                                @ $21.00
 
$2,590
   
Use the following information for Shafer Company to compute inventory turnover for year 2


Year 2                   Year 1

Net Sales                                             647,500                582,000
Cost of goods sold                           389,500                360,840
Ending Inventory                             76,700 79,380
 
4.99
   
Use the following information for Ephron Company to compute days' sales in inventory for Year 2.


Year 2                   Year 1


Net Sales                                             547,500                572,000
Cost of goods sold                           348,500                370,840
Ending inventory                             75,700 81,400
 
79.3
   
The control principle for accounting information systems require that the:
System must have methods and procedures allowing managers to control and monitor business activities
   
The flexibility principle of accounting information systems prescribes that the:
System is able to adapt to changes in the company, business environment, and needs of decision making.
   
The five fundamental principles of accounting information systems are:
Control, relevance, compatibility, flexibility, and cost- benefit.
   
Source documents:
provide the information processed by an accounting system
   
Which of the following is not a special journal:
Cash payments journal
General Journal
Purchases Journal
Sales Journal
Cash Receipts Journal
   
The sales journal is used for recording:
Credit sales
   
The purchases journal is used for recording:
credit purchases
   
A subsidiary ledger:
Is a listing of individual accounts and amounts with a common characteristic.
   
A subsidiary ledger that contains a seperate account for each supplier (creditor) to the company is a(n)
Accounts Payable ledger
   
An accounts receivable ledger is a:
List of the separate accounts that show the balances outstanding from credit customers.
   
An accounts payable ledger:
Contains a separate account for each supplier to the company
   
The accounts payable controlling account:
Equals the sum of all balances of suppliers accounts
   
the accounts receivable ledger:
stores transaction data of individual customers
   
Enterprise-resource planning software:
Refers to programs that help manage a company's operations
   
Days' payable outstanding is used to calculate:
The average length of time that payables are deferred until payment is made
   
Alani's Hawaiian had accounts payable of $4,500 and cost of goods sold of $76,500. The days' payable outstanding for Alani's Hawaiian is:
21.5 days
   
When posting the sales journal's activity at the end of the month, the sales column's totals are:
Debited to accounts receivable
Credited to sales
   
Which of the following journals would a company use to record period-end adjusting entries to accrue revenues?
General Journal
   
Barrier Scuba Equipment purchased supplies costing $3,000 on credit. Identify the journal the transaction would be recorded in:
Purchases Journal
   
What are the steps of the operating cycle for a merchandiser with credit sales.
1. Cash Purchases
2. Inventory for Sale
3. Credit Sales
4. Accounts receivables
5. Collect Cash
   
Describe the difference between the periodic and perpetual inventory accounting systems.
Periodic updates accounting records for merchandise transactions only at the end of the period.
Perpetual continually updates the accounting records for merchandise transactions specifically for the inventory
you have available for sale and how much you have sold.
   
Describe the difference between FOB shipping point and FOB destination.
FOB- Freight on Board
FOB shipping point means that the ownership of the goods that are bought, belong to the buyer as soon as the product is shipped or boarded. FOB destination, ownership transfers when the product arrives with the buyer.
   
Sales journal
A journal used to record sales of merchandise on credit
   
Controlling account
General ledger account, the balance of which (after posting) equals the sum of the balances in its related subsidiary ledger.
   
Accounts receivable ledger
A record of the separate accounts of each credit customer that is controlled by a general ledger account
   
Cash payments journal
A special journal used to record all payments of cash
   
Cash receipts journal
The special journal used to record all receipts of cash
   
Schedule of accounts payable
A list of each customer from the accounts payable ledger with their balances and the total.
   
Accounts payable ledger
A record of the separate accounts of each supplier that is controlled by a general ledger account
   
Columnar journal
Journal with more than one column for recording data
   
Special Journal
Any journal used for recording and posting transactions of a similar type.
   
Purchases journal
A journal used to record all purchases on credit
   
Expenses that support the overall operations of a business and include the expenses relating to accounting, human resource management, and financial management are called:
General and administrative expenses
   
Merchandise inventory includes
All goods owned by a company and held for sale.
   
Goods in transit are included in a purchaser's inventory:
When the good are shipped FOB shipping point
   
Consignment goods are
Goods shipped by the owner to the consignee who sells the goods for the owner
   
Physical counts of inventory:
Are necessary to adjust the Inventory account to the actual inventory available.
   
The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost, and also mimics the actual flow of goods for most business is:
FIFO

    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2