Quiz Detail

Q1 . The FIFO method assumes that the earlies goods purchased are the first to be sold.

A True

B False

Q2 . If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is $50,000, cost of goods sold is:

A $420,000

B $390,000

C $370,000

D $330,000

Q3 . In a perpetual inventory system, a company determines the cost of goods sold each time a sale occurs.

A True

B False

Q4 . Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance.

A True

B False

Q5 . An error in the ending inventory of the current period will have no effect on net income of the next accounting period.

A True

B False

Q6 . A multiple-step income statement distinguishes between operating and non-operating activities.

A True

B False

Q7 . Under a periodic system, the company uses seperate accounts to record freight costs, returns, and discounts.

A True

B False

Q8 . A merchandiser using a perpetual system will require one additional adjusting entry to make the record agree with the actual inventory on hand.

A True

B False

Q9 . The account Sales Discounts is a:

A Revenue account

B Expense account

C Contra revenue account

D Liability account

Q10 . Net sales is sales less:

A Sales returns and allowances

B Sales discounts

C Sales returns & allowances and sales discounts

D Cost of goods sold

Q11 . Manufacturing companies usually classify inventory into three catagories.

A True

B False

Q12 . Sales revenue less cost of goods sold is called net profit.

A True

B False

Q13 . In a perpetual inventory system, which of the following would be debited when goods are purchased with the intent of being resold?

A Purchases

B Accounts Payable

C Cost of Goods Sold

D Merchandise Inventory

Q14 . Under the lower of cost or market basis, market is defined as current replacement cost.

A True

B False

Q15 . The results under FIFO in a perpetual system are the same as in a periodic system.

A True

B False

Q16 . FOB destination means that the seller places the goods free on board the common carrier and the buyer pays the freight costs.

A True

B False

Q17 . A credit sale of $750 is made on June 13, term 2/10, net/30. A return of $50 is granted on June 16. The amount received as payment in full on June 23 is:

A $700

B $650

C $686

D $685

Q18 . Income from operations is:

A Gross profit less operating expenses.

B Gross profit less other expenses and losses.

C Net sales less cost of goods sold.

D Net sales less operating expenses.

Q19 . When preparing a worksheet for a merchandising company, which of the following accounts should not be reported in the Income Statement columns?

A Dividends

B Sales Discounts

C Depreciation Expense

D Cost of Goods Sold

Q20 . On a bank reconciliation, outstanding checks are:

A Deducted from the bank balance

B Added to the book balance

C Deducted from the book balance

D Added to the bank balance

Q21 . In a period of inflatino, which cost flow method produces the highest net income?

A Average cost method

B LIFO method

C FIFO method

D Gross profit method

Q22 . Which of the following is not an element of the fraud triangle?

A Segregation of duties

B Rationalization

C Financial pressure

D Opportunity

Q23 . Gross profit is:

A Sales revenue less operating expenses.

B Net income less operating expenses.

C Calculated by subtracting cost of goods sold

D Net income less cost of goods sold.

Q24 . A single-step income statement:

A Reports gross profit.

B Reports sales revenue and "Other revenues and gains" in the revenues section of the income statement.

C Reports operating income separately.

D Does not report cost of goods sold.

Q25 . In a periodic inventory system, companies keep detailed inventory records of the goods on hand throughout the period.

A True

B False

Q26 . The income statement for retailers contains one expense catergory just like the income statement of a service company.

A True

B False

Q27 . Which of the following is shown for both merchandising and service companies?

A Operating expenses

B Sales returns and allowances

C Gross profit

D Cost of goods sold

Q28 . Overstating beginning inventory will overstate:

A Stockholders' equity

B Assets

C Cost of goods sold

D Net income

Q29 . Songbird Company has sales of $150,000 and cost of goods available for sale of $135,000. If the gross profit rate is 30%, the estimated cost of the ending inventory under the gross profit method is:

A $45,000

B $30,000

C $75,000

D $15,000

Q30 . A bank issues a debit memorandum when it collects a note receivable for a depositor.

A True

B False

Q31 . In determining cost of goods sold:

A Freight-in added to net purchases.

B Freight-out is added to net purchases.

C Purchases returns and allowances are deducted from net purchases.

D Purchase discounts are deducted from net purchases.

Q32 . Of the following persons, the best choice for preparing the monthly bank reconciliations would be:

A Randy, an assistant cashier, who also takes the daily deposits to the bank.

B Norman, the assistant treasurer, who also invests excess cash in short-term interest bearing securities.

C Cindy, the chief cashier, who also supervises Randy and Angela.

D Angela, an assistant cashier, who also prepares all the checks.

Q33 . There are more steps involved in preparing a worksheet for a merchandising company than for a service company.

A True

B False

Q34 . An organization uses internal control to enhance the accuracy and reliability of its accounting records and to:

A Safeguard its assets

B Prevent fraud

C Produce correct financial statements

D Deter employee dishonesty

Q35 . In a multiple-step income statement, which of the following would not be reported in the operating expenses section?

A Advertising expense

B Interest expense

C Freight-out

D All of the above are operating expenses

Q36 . Which of the following is used to estimate the cost of ending inventory?

A Net profit method

B Wholesale inventory method

C Perpetual inventory method

D Retail inventory method

Mega Accounting Test

Q1 . The FIFO method assumes that the earlies goods purchased are the first to be sold.

Q2 . If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is $50,000, cost of goods sold is:

Q3 . In a perpetual inventory system, a company determines the cost of goods sold each time a sale occurs.

Q4 . Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance.

Q5 . An error in the ending inventory of the current period will have no effect on net income of the next accounting period.

Q6 . A multiple-step income statement distinguishes between operating and non-operating activities.

Q7 . Under a periodic system, the company uses seperate accounts to record freight costs, returns, and discounts.

Q8 . A merchandiser using a perpetual system will require one additional adjusting entry to make the record agree with the actual inventory on hand.

Q9 . The account Sales Discounts is a:

Q10 . Net sales is sales less:

Q11 . Manufacturing companies usually classify inventory into three catagories.

Q12 . Sales revenue less cost of goods sold is called net profit.

Q13 . In a perpetual inventory system, which of the following would be debited when goods are purchased with the intent of being resold?

Q14 . Under the lower of cost or market basis, market is defined as current replacement cost.

Q15 . The results under FIFO in a perpetual system are the same as in a periodic system.

Q16 . FOB destination means that the seller places the goods free on board the common carrier and the buyer pays the freight costs.

Q17 . A credit sale of $750 is made on June 13, term 2/10, net/30. A return of $50 is granted on June 16. The amount received as payment in full on June 23 is:

Q18 . Income from operations is:

Q19 . When preparing a worksheet for a merchandising company, which of the following accounts should not be reported in the Income Statement columns?

Q20 . On a bank reconciliation, outstanding checks are:

Q21 . In a period of inflatino, which cost flow method produces the highest net income?

Q22 . Which of the following is not an element of the fraud triangle?

Q23 . Gross profit is:

Q24 . A single-step income statement:

Q25 . In a periodic inventory system, companies keep detailed inventory records of the goods on hand throughout the period.

Q26 . The income statement for retailers contains one expense catergory just like the income statement of a service company.

Q27 . Which of the following is shown for both merchandising and service companies?

Q28 . Overstating beginning inventory will overstate:

Q29 . Songbird Company has sales of $150,000 and cost of goods available for sale of $135,000. If the gross profit rate is 30%, the estimated cost of the ending inventory under the gross profit method is:

Q30 . A bank issues a debit memorandum when it collects a note receivable for a depositor.

Q31 . In determining cost of goods sold:

Q32 . Of the following persons, the best choice for preparing the monthly bank reconciliations would be:

Q33 . There are more steps involved in preparing a worksheet for a merchandising company than for a service company.

Q34 . An organization uses internal control to enhance the accuracy and reliability of its accounting records and to:

Q35 . In a multiple-step income statement, which of the following would not be reported in the operating expenses section?

Q36 . Which of the following is used to estimate the cost of ending inventory?