Accounting I

The records for Uptown Pet Shop showed the following: Sales $225,000 Beginning merchandise inventory $30,000 Purchases 135,000 Cost of goods sold 150,000. What was the ending merchandise inventory?

$15,000 Because Cost of goods sold 150,000 -Purchases 135,000 =$15,000

Beginning inventory 15 units @ $6 per unit, First purchase 30 units @$7 per unit Second Purchase 35 units @$8 per unit Second sale 40 units Third purchase 20 units @ $9 per unit What is the value of the ending inventory using a perpetual inventory system with the LIFO costing method?

$270

Beginning inventory 15 units @$6 per unit, first purchase 30 units @$7 per unit first sale 25 units second purchase 35 units @$8 per unit second sale 40 units third purchase 20 units @9 per unit What is the total value of the ending inventory using a perpetual inventory system with the weighted average costing method?

$292.95

Beginning inventory 15 units @ $6 per unit, First purchase 30 units @$7 per unit, First sale 25 units Second purchase 35 units @8 per unit Second sale 40 units third purchase 20 units @$9 per unit What is the value of the ending inventory using a perpetual inventory system with the FIFO costing method?

$300

Part of the merchandise purchased for cash at an earlier time is now being returned. Which of the following is the correct journal entry FOR THE BUYER for this return, assuming the seller grants cash refunds and a perpetual inventory system is used?

A debit to cash and a credit to Merchandise Inventory

An item of merchandise with a list price of $200 was purchased with a trade discount of 40% and credit terms of 3/10, n/30. The vendor was paid within the discount period. From the buyer's standpoint, which is the correct journal entry to record the payment?

Accounts Payable, debit, $120.00; Merchandise Inventory, credit $3.60; Cash, credit, $116.40

FOB Shipping Point means that the

Buyer pays the freight

In a perpetual inventory system, which of the following would be debited when inventory is sold on account (from the SELLER's standpoint)?

CGS and A/R

The buyer received an invoice from the seller for merchandise with a list price of $400 and credit terms of 2/10, n/60. The term 'n/60' in the credit terms is which of the following?

Credit Period

In a perpetual inventory system, which of the following is not part of the series of journal entries made by the seller when merchandise is sold on credit?

Credit the Cost of Goods Sold account

Under a perpetual inventory system merchandise is purchased for cash. Which is the correct journal entry to record this purchase?

Debit to Merchandise Inventory and credit to cash

When prices are rising, which of the following will result in the highest amount of income tax expense?

FIFO

The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased are allocated in which of the following ways?

First to be allocated to the cost of good sold

When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin?

LIFO

In a perpetual inventory system. From the buyer's standpoint, a return of defective merchandise is recorded by crediting

Merchandise Inventory

A retailer who uses a perpetual inventory system purchases $8,000 of merchandise on credit. The credit terms were 2/10, n/30, FOB destination. The freight costs were $130. What was the journal entry for the purchases to record this transaction?

Merchandise inventory, debit, $8,000; Accounts Payable, credit, $8,000

Gross margin (gross profit) from sales is the difference between which of the following?

Net Sales and the cost of goods sold

Net Sales is Sales less

Sales returns and allowances and sales discounts

Which of the following is not a legitimate reason for taking a physical inventory count?

To keep employees busy during a slow time in the business