MGMT 210 Mastering Accounting 2

Which of the following accounts will be included in a post-closing trial balance? A. Common Stock B. Supplies Expense C. Dividends D. Salaries Expense

A. Common Stock

Ending inventory for the current accounting period is overstated by​ $2,700. What effect will this error have on Cost of Goods Sold and Net Income for the current accounting​ period? A. Cost of Goods Sold Net Income Understated Overstated B. Cost of Goods Sold Net Income Overstated Understated C. Cost of Goods Sold Net Income Understated Understated D. Cost of Goods Sold Net Income Overstated Overstated

A. Cost of Goods Sold Net Income Understated Overstated

​Robyn's Retail had 400 units of inventory on hand at the end of the year. These were recorded at a cost of $16 each using the last-​in, first-out ​(LIFO) method. The current replacement cost is $12 per unit. The selling price charged by​ Robyn's Retail for each finished product is $19. In order to record the adjusting entry needed under the lower-of-cost-or-market ​rule, the Merchandise Inventory will be​ ________. A. credited by $ 1600 B. debited by $ 1600 C. credited by $ 4800 D. debited by $ 4800

A. credited by $ 1600

Expenses that fall outside the regular operations of a business are​ ________. A. included under the other revenues and expenses section of the income statement B. treated as current assets and are shown as merchandise inventory C. not considered for the calculation of net income D. not shown in the income statement of a merchandiser

A. included under the other revenues and expenses section of the income statement

From the following details of a​ merchandiser, calculate the Cost of Goods Sold.​ (Assume the merchandiser uses the periodic inventory​ system.) Net Sales ​$198,000 Purchases ​92,000 Purchase Returns and Allowances ​1,800 Purchase Discounts ​1,400 Freight In ​1,350 Beginning Merchandise Inventory ​62,000 Ending Merchandise Inventory ​36,000 A. ​$116,150 B. ​$114,800 C. ​$62,800 D. ​$54,150

A. ​$116,150

​Weller, Inc. provided the following particulars for​ 2017: Cost of Goods Sold​ (Cost of​ sales)​ $1,000,000 Beginning Merchandise Inventory ​335,000 Ending Merchandise Inventory ​600,000 Calculate the average number of days that inventory was held by​ Weller, Inc. during 2017.​ (Assume 365 days in a year. Round your intermediate calculations and final answer to two decimal​ places.) A. 122.07 days B. 170.56 days C. 341.12 days D. 218.56 days

B. 170.56 days

Which of the following line items will appear on the income statement of a merchandiser but not of a service​ company? A. Supplies Inventory B. Cost of Goods Sold C. Depreciation Expense D. Salaries Expense

B. Cost of Goods Sold

In an accounting​ cycle, which of the following steps takes place only at the end of the accounting​ period? A. journalize transactions that occur B. journalize adjusting entries C. analyze transactions as they occur D. start with the beginning account balances

B. journalize adjusting entries

A reversing entry​ ________. A. is dated the last day of an accounting period B. switches the debit and the credit of a previous entry C. is required by GAAP D. exactly resembles the prior adjusting entry prepared in the books

B. switches the debit and the credit of a previous entry

A company purchased 300 units for​ $30 each on January 31. It purchased 360 units for​ $36 each on February 28. It sold a total of 460 units for​ $40 each from March 1 through December 31. What is the amount of ending inventory on December 31 if the company uses the first-​in, first-out ​(FIFO) inventory costing​ method? (Assume that the company uses a perpetual inventory​ system.) A. ​$6,000 B. ​$7,200 C. ​$5,360 D. ​$640

B. ​$7,200

Calculate the current ratio using the following​ information: (Round your answer to two​ decimals.) Cash $6,000 Accounts Receivable 1,300 Prepaid Rent ​1,100 Land ​20,000 Equipment ​6,000 Accumulated Depreciation ​1,000 Accounts Payable 5,000 Salaries Payable 1,000 Notes Payable-long term ​8,000 A. 1.44 B. 1.22 C. 1.40 D. 1.68

C. 1.40

​Property, plant, and equipment are categorized as​ ________. A. current assets B. long-term investments C. plant assets D. short-term investments

C. plant assets

Where does net income appear on a​ worksheet? A. Net income appears only in the balance sheet credit column. B. Net income appears in the income statement credit column and in the balance sheet debit column. C. Net income appears only in the income statement debit column. D. Net income appears in the balance sheet credit column and in the income statement debit column.

D. Net income appears in the balance sheet credit column and in the income statement debit column.

The gross profit percentage is one of the most carefully watched measures of​ ________. A. solvency B. liquidity C. marketability D. profitability

D. profitability

Under the perpetual inventory​ system, purchase returns or allowances are debited to the Merchandise Inventory account by the purchaser.

False

Worksheet procedures for a merchandising business using the perpetual inventory system are different from the worksheet procedures for a service business.

False

An amount that a merchandiser earns by selling its inventory is known as sales revenue or sales.

True

The Service Revenue account is a temporary account.

True

The disclosure principle states that a company should report enough information for outsiders to make knowledgeable decisions about the company.

True

When using the LIFO inventory costing​ method, ending merchandise inventory will be the​ lowest, as compared to FIFO and weighted-average inventory costing​ methods, when costs are increasing.

True