Chapter 05 – Accounting for Retail Businesses
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Page 51
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–02 – LO: 05–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
127. Under a perpetual inventory system
a.
accounting records continuously disclose the amount of inventory
b.
increases in inventory resulting from purchases are debited to Purchases
c.
there is no need for a year-end physical count
d.
the purchases returns and allowances account is credited when goods are returned to vendors
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–02 – LO: 05–02
FNMN.WAJO.19.05–05 – LO: 05–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
TOPICS:
Bloom’s: Remembering
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
128. The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be
a.
Jan. 1 Inventory 1,500
Cash 1,500
b.
Jan. 1 Office Supplies 1,500
Cash 1,500
c.
Jan. 1 Purchases 1,500
Accounts Payable 1,500
d.
Jan. 1 Cash 1,500
Accounts Receivable 1,500
ANSWER:
a
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–02 – LO: 05–02
FNMN.WAJO.19.05–05 – LO: 05–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
Copyright Cengage Learning. Powered by Cognero.
Page 55
135. President’s salaries, depreciation of office furniture, and office supplies are
a.
selling expenses
b.
miscellaneous expenses
c.
administrative expenses
d.
inventory expenses
ANSWER:
c
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
136. Expenses that are incurred directly or entirely in connection with the selling of merchandise are classified as
a.
selling expenses
b.
general expenses
c.
other expenses
d.
administrative expenses
ANSWER:
a
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
137. When the perpetual inventory system is used, the inventory sold is shown on the income statement as
a.
cost of goods sold
b.
purchases
c.
purchases returns and allowances
d.
net purchases
ANSWER:
a
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Chapter 05 – Accounting for Retail Businesses
Copyright Cengage Learning. Powered by Cognero.
Page 58
b.
$31,670
c.
$30,600
d.
$62,840
ANSWER:
b
RATIONALE:
Cost of goods sold = Inventory on September 1 + Purchases – Inventory on September
30 = $5,700 + $32,000 – $6,370 = $31,330
Gross profit = Sales – Cost of goods sold = $63,000 – $31,330 = $31,670
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
FNMN.WAJO.19.05–05 – LO: 05–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.ACBSP.APC.17 – Inventories Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
142. Using the following information for a periodic inventory system, what is the amount of income from operations?
Purchases
$32,000
Selling expense
$ 960
Inventory,
September 1
5,700
Inventory,
September 30
6,370
Administrative expense
910
Sales
63,000
Rent revenue
1,200
Interest expense
1,040
a.
$31,670
b.
$29,960
c.
$28,760
d.
$29,800
ANSWER:
d
RATIONALE:
Cost of goods sold = Inventory on September 1 + Purchases – Inventory on September
30 = $5,700 + $32,000 – $6,370 = $31,330
Operating income = Sales – Cost of goods sold – Administrative expenses – Selling
expenses = $63,000 – $31,330 – $910 – $960 = $29,800
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
FNMN.WAJO.19.05–05 – LO: 05–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.ACBSP.APC.17 – Inventories Reporting
Chapter 05 – Accounting for Retail Businesses
Copyright Cengage Learning. Powered by Cognero.
Page 60
c.
both gross profit and income from operations
d.
income from operations but not gross profit
ANSWER:
c
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
146. The form of income statement that derives its name from the fact that the total of all expenses is deducted from the
total of all revenues is called a
a.
multiple-step statement
b.
revenue statement
c.
operating-income statement
d.
single-step statement
ANSWER:
d
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.05–04 – LO: 05–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:19 PM
DATE MODIFIED:
10/16/2017 4:50 PM
147. Which of the following accounts should be closed to Retained Earnings at the end of the fiscal year?
a.
Inventory
b.
Accumulated Depreciation
c.
Customer Refunds Payable
d.
Cost of Goods Sold
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False