Calculate income from operations for Jonas Company based on the following data:
Sales $770,000
Operating expenses 72,500
Cost of merchandise sold 552,000
Your Answer:
Question 1 options:
Answer
Dollar Co. sold merchandise to Pound Co. on account, $27,500, terms 2/15, net 45. Pound Co. paid the invoice within the discount period.  What is the sales amount to be recorded in the above transactions?
Your Answer:
Question 2 options:
Answer
Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a
Question 3 options:
credit to Customer Refunds Payable
debit to Merchandise Inventory
credit to Merchandise Inventory
debit to Cash
Merchandise with a sales price of $5,000 is sold on account with terms 2/10, n/30.  The journal entry to record the sale would include a
Question 4 options:
debit to Cash for $5,000
debit to Merchandise Inventory for $100
credit to Sales for $4,900
debit to Accounts Receivable for $4,880
When purchases of merchandise are made on account with a perpetual inventory system, the transaction is recorded with which entry?
Question 5 options:
debit Accounts Payable; credit Merchandise Inventory
debit Merchandise Inventory; credit Accounts Payable
debit Merchandise Inventory; credit Cash Discounts
debit Merchandise Inventory; credit Purchases
Norfolk Sporting Goods purchases merchandise with a catalog list price of $45,000.  The retailer receives a 40% trade discount and credit terms of 2/10, n/30.  What amount should Norfolk debit to the Merchandise Inventory account?
Your Answer:
Question 6 options:
Answer
A sales invoice included the following information: merchandise price, $16,000; terms 1/10, n/eom; FOB shipping point with prepaid freight of $1,000 added to the invoice.  Assuming that a credit for merchandise returned of $1,300 is granted prior to payment and that the invoice is paid within the discount period, what is the amount of cash that should be received by the seller? (Please round your answer to the nearest whole number.)
Your Answer:
Question 7 options:
Answer
Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge.  Which of the following entries does Pierce make to record this sale?
Question 8 options:
Accounts Receivable—Stanton, debit $20,000; Sales, credit $20,000
Accounts Receivable—Stanton, debit $19,600; Sales, credit $19,600, and
Accounts Receivable—Stanton, debit $500; Cash, credit $500
Accounts Receivable—Stanton, debit $20,100; Sales, credit $20,100
Accounts Receivable—Stanton, debit $20,000; Sales, credit $20,000, and
Delivery Expense, debit $500; Cash, credit $500
A retailer purchases merchandise with a catalog list price of $80,000.  The retailer receives a 25% trade discount and has credit terms of 2/10, n/30.  How much cash will be needed to pay this invoice within the discount period?
Your Answer:
Question 9 options:
Answer
If merchandise sells for $3,500, with terms of 3/15, n/45, and the cost of the inventory sold is $2,100, the amount charged to sales is
Your Answer:
Question 10 options:
Answer
The Corbit Corp. sold merchandise for $10,000 cash. The cost of the merchandise sold was $7,590.  The journal entries to record this transaction under the perpetual inventory system would be
Question 11 options:
Cash                                              10,000
Merchandise Inventory                           10,000
Cost of Merchandise Sold                7,590
Sales                                                     7,590
Cash                                             10,000
Sales                                                     10,000
Cost of Merchandise Sold               7,590
Merchandise Inventory                             7,590
Cash                                             10,000
Sales                                                     10,000
Cost of Merchandise Sold              10,000
Merchandise Inventory                           10,000
Cash                                              7,590
Sales                                                       7,590
Cost of Merchandise Sold               7,590
Merchandise Inventory                              7,590
Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45.  The cost of the merchandise sold was $24,500.  Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700.  Gomez Co. paid the invoice within the discount period.  What is the amount of gross profit earned by Abbey Co. on the above transactions?
Your Answer:
Question 12 options:
Answer
What is the major difference between a periodic and perpetual inventory system?
Question 13 options:
Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account.
Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory.
Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month.
All of the answers are correct.
Under the periodic inventory system, the journal entry to record the purchase of merchandise inventory will include a debit to
Question 14 options:
Merchandise Inventory
Purchases
Accounts Payable
Cost of Merchandise Purchased
Using the following information, what is the amount of income from operations?
Purchases $32,000 Selling expense $    960
Merchandise inventory, September 1 5,700 Merchandise inventory,
September 30 6,370
Administrative expense 910 Sales 63,000
Rent revenue 1,200 Interest expense 1,040
Your Answer:
Question 15 options:
Answer
Multiple-step income statements show
Question 16 options:
gross profit but not income from operations
neither gross profit nor income from operations
both gross profit and income from operations
income from operations but not gross profit
A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $3,600; Freight-In, $650; Purchases, $10,700; Purchases Returns and Allowances, $1,950; Purchases Discounts, $330.  The cost of merchandise purchased is equal to
Your Answer:
Question 17 options:
Answer
The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be
Question 18 options:
Jan. 1  Merchandise Inventory    1,600
Accounts Payable              1,600
Jan. 1  Office Supplies              1,600
Accounts Payable              1,600
Jan. 1  Purchases                     1,600
Accounts Payable              1,600
Jan. 1  Purchases                     1,600
Accounts Receivable        1,600
The inventory data for an item for November are:
Nov.  1 Inventory 20 units at $19
4 Sold 10 units
10 Purchased 30 units at $20
17 Sold 20 units
30 Purchased 10 units at $21
Using a perpetual system, what is the cost of the merchandise sold for November if the company uses LIFO?
Your Answer:
The inventory data for an item for November are:
Nov.  1 Inventory 20 units at $19
4 Sold 10 units
10 Purchased 30 units at $20
17 Sold 20 units
30 Purchased 10 units at $21
Using a perpetual system, what is the cost of the merchandise sold for November if the company uses FIFO?
Your Answer:
Question 20 options:
Answer
The following units of an inventory item were available for sale during the year:
Beginning inventory 10 units at $55
First purchase 25 units at $60
Second purchase 30 units at $65
Third purchase 15 units at $70
The firm uses the periodic inventory system.  During the year, 60 units of the item were sold.
The value of ending inventory using FIFO is
Your Answer:
Question 21 options:
Answer
The following units of an inventory item were available for sale during the year:
Beginning inventory 10 units at $55
First purchase 25 units at $60
Second purchase 30 units at $65
Third purchase 15 units at $70
The firm uses the periodic inventory system.  During the year, 60 units of the item were sold.
The value of ending inventory using LIFO is
Your Answer:
Question 22 options:
Answer
The following units of an inventory item were available for sale during the year:
Beginning inventory 10 units at $55
First purchase 25 units at $60
Second purchase 30 units at $65
Third purchase 15 units at $70
The firm uses the periodic inventory system.  During the year, 60 units of the item were sold.
The value of ending inventory rounded to nearest dollar using average cost is:
Your Answer:
Question 23 options:
Answer
Merchandise inventory at the end of the year was inadvertently overstated.  Which of the following statements correctly states the effect of the error on net income, assets, and stockholders’ equity?
Question 24 options:
net income is overstated, assets are overstated, and stockholders’ equity is understated
net income is overstated, assets are overstated, and stockholders’ equity is overstated
net income is understated, assets are understated, and stockholders’ equity is understated
net income is understated, assets are understated, and stockholders’ equity is overstated
If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect their bottom line?
Question 25 options:
no change to net income
net income will be overstated
net income will be understated
only gross profit will be affecte

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