Financial Accounting Exam 3

Sally Inc has the following inventory, purchase and sales information. Nov 1 Beginning Inventory: 10 units @ $1.00 Nov 5 Purchase: 5 Units @ $1.50 Nov 7 Purchase: 7 Units @ 1.75 Nov 10 Sale: 20 Units Calculate what the Cost of Goods Sold would be for the period using the Weighted Average method (round to nearest dollar).

$27

On August 1, 2015 Janson Corporation sold 75 units of Slim Jims to Sally Inc. for $3,500 with payment terms of 2/10, N/30. Sally Inc. should pay what amount on August 10th to take advantage of the discount and clear their receivable balance with Janson?

$3,430

Sally Inc has the following inventory, purchase and sales information. Nov 1 Beginning Inventory: 10 units @ $1.00 Nov 5 Purchase: 5 Units @ $1.50 Nov 7 Sale: 7 Units Calculate what the Cost of Goods Sold would be for the period using the FIFO method.

$7.00

Bucko Corporation records sales in their revenue tracking system. At the end of each day Bucko runs a report out of the revenue tracking system and uploads the report's information into their accounting system. This method is most reflective of ___________________.

Batch Processing

Which equation below best represents the inventory equation?

Beginning Inventory + Allowances - Cost of Goods Sold = Ending Inventory

Concord Corp. is considering the purchase of new accounting software. Their accounting staff is spread around the world and requires access to the accounting information from anywhere and at any time. Which principle is best represented with this scenario?

Compatibility

Tucker Corp. is considering the purchase of new accounting software. They want to ensure that accounting staff that can enter purchase invoice cannot also cut checks. Which principle is best represented with this scenario?

Control

Identify the temporary account that would be closed into the Income Summary account as part of the period end close process.

Cost of Goods Sold

Overland Corp. is considering the purchase of new accounting software. Their CFO wants the best system for the least expense. Which principle is best represented with this scenario.

Cost-Benefit

Tucker Corp's accounts payable subsidiary ledger has the following balances for the following suppliers. Martin Supply: $50 Shirt Co: $300 Bed Co: $5,000 How much should the balance be for the controlling payable account on the general ledger ? Also, is the balance a debit or credit balance on the general ledger?

Credit: $5,350

Tucker Corp's accounts receivable subsidiary ledger has the following balances for the following customers. Jessup: $2,000 Quaker: $500 Stella: $2,500 How much should the balance be for the controlling receivable account on the general ledger ? Also, is the balance a debit or credit balance on the general ledger?

Debit: $5,000

Sally Inc. purchased $1,000 in inventory from Janson Corporation. Sally Inc.. Sally Inc. took ownership of the inventory when the goods were delivered to its location. Which inventory ownership transfer method is being described in this example?

Free on Board Destination

Which of the following is not included in determining the buyer's inventory cost?

Freight costs with FOB Destination terms

Nike is a large, multinational organization with billions of dollars in sales each year and thousands of retail customers. Which accounting software would be best for Nike?

Integrated Accounting Software

On May 1, Dover Corp made a sale on credit in the amount of $300 to a customer. The cost of the goods sold was $125. The customer paid Dover in full on May 30. When should Cost of Goods sold be recognized for this sale?

May 1, when the goods were sold on credit

Bass Corp. is considering the purchase of new accounting software. The accounting and operations staff has several reports the system must be able to generate. Without the information on these reports Bass Corp. will not be able to make informed decisions. Which principle is best represented with this scenario.

Relevance

Which of the following best represents how Gross Profit is calculated on the Multi-Step Income Statement?

Sales - Sales Discounts, Returns and Allowances - Cost of Goods Sold = Gross Profit

Fred Corp. has an invoice processing system that receives invoices from suppliers electronically and automatically posts the relevant information into their accounts payable system. The electronic invoices received from suppliers are an example of a/an ___________________.

Source document

Which of the following best explains the purpose for the Gross Margin Ratio?

The percentage of net sales available to cover selling, general and administrative expenses.

On July 1, 2015 Janson Corporation sold 100 units of Slim Jims to Sally Inc. for $5,000. Upon receipt of the 100 units Sally Inc. realized that 10 of the units were defective. Janson Corporation agreed to reduce the amount owed for the July 1, 2015 sale from $5,000 to $4,500. From Janson Corporation's point of view this reduction is best defined as ________________.

a sales allowance