Accounting At Home Review

Mansfield Company has a periodic inventory system and uses the LIFO method to assign costs to inventory and cost of goods sold. COGAS $800. Consider the following information: Date Description # of units Cost per unit January 1 Beginning inventory 100 $5 = $500 October 2 Purchase 75 $4 = $300 December 5 Sales 125 What amounts would be reported as the cost of goods sold and ending inventory balances for the period?

Cost of good sold $550, Ending inventory $250

A company sells goods at a selling price of $20,000. The cost of the goods is $15,000. Under a perpetual inventory system, the journal entries prepared to record the sale will include one with a debit to:A company sells goods at a selling price of $20,000. The cost of the goods is $15,000. Under a perpetual inventory system, the journal entries prepared to record the sale will include one with a debit to:

Cost of good sold and a credit to inventory for $15,000

Maxell Company uses the FIFO method to assign costs to inventory and cost of goods sold. The company uses a periodic inventory system. COGAS $800. Consider the following information: Date Description # of units Cost per unit January 1 Beginning inventory 100 $5 = $500 June 2 Purchase 75 $4 = $300 November 5 Sales 125 What amounts would be reported as the cost of goods sold and ending inventory balances for the year?

Cost of goods sold $600, Ending inventory $200

The deferral adjustment to record the amount of unearned service revenue that is now earned includes a:

Debit to Unearned Revenue

When a deferral adjustment is made to a liability account, that liability becomes a(n)

Revenue

A contra-account:

offsets, or reduces, another account

If a company's ending inventory count was $50,000, cost of goods sold was $27,000, and purchases were $56,000, its beginning inventory must have been:

$21,000

Boron Company has sales of $60,000, beginning inventory of $7,000, purchases of $35,000, and ending inventory of $5,000. The cost of goods sold is: BI + Purchases = COGAS - EI = COGS

$37,000

When goods are sold to a customer with credit terms of 2/15, n/30, the customer will receive a:

2% discount if they pay within 15 days

In order to calculate shrinkage:

A perpetual inventory system requires an occasional count of actual inventory

How can accrual adjustments for interest earned but not yet collected affect the balance sheet and the income statement?

Accrual adjustments can increase assets and increase revenues

All the following accounts will have zero balances on a post-closing trial balance except:

Accumulated Depreciation

On October 1, Robertson Company sold inventory in the amount of $5,800 to Alberta, Inc. with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses a periodic inventory system. Alberta pays the invoice on October 8 and takes the appropriate discount. What journal entry will be recorded by Robertson on October 8 if they use the gross method?

Debit cash for $5,684, debit sales discounts for $116, and credit accounts receivable for $5,800

An error must have been made if which of the following accounts appears on the post-closing trial balance with a balance other than zero?

Depreciation expense

The specific identification method would probably be most appropriate for which of the following goods?

Diamond necklaces at a Tiffany & Co. jewelry store

When using a perpetual inventory system, the Cost of Goods Sold is recorded:

Each time a sale is made

When a deferral adjustment is made to an asset account, that asset becomes a(n)

Expense

Which of the following will occur when inventory costs are decreasing?

FIFO will result in a lower net income and a lower ending inventory than will LIFO

Which is the first financial statement that should be prepared after the adjusted trial balance has been prepared?

Income Statement

FIFO uses the ________ cost for cost of goods sold on the income statement and the ________ cost for inventory on the balance sheet

Oldest; newest

How does the adjustment for depreciation differ from other deferral adjustments?

The depreciation adjustment uses a contra-asset account rather than reducing the asset accounts directly

Inventory shipped FOB destination and in transit on the last day of the year should be included in:

The inventory balance of the seller

Closing Entries:

cause the revenue and expense accounts to have zero balances