Accounting MC questions

A company purchased $11,400 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $1,200, was added to the invoice amount. On June 20, it returned $1,920 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:

$10,396

On April 24 of the current year, The Memphis Pecan Company experienced a tornado that destroyed the company's entire inventory. At the beginning of April, the company reported beginning inventory of $227,650. Inventory purchased during April (until the date of the tornado) was $198,700. Sales for the month of April through April 24 were $643,400. Assuming the company's typical gross profit ratio is 50%, estimate the amount of inventory destroyed in the tornado.

$104,650

Hull Company reported the following income statement information for the current year: Sales $423,000 Cost of goods sold : Beginning inventory $151,500 Cost of goods purchased 286,000 Cost of goods available for sale 437,500 Ending inventory 157,000 Cost of goods sold 280,500 Gross profit$142,500 The beginning inventory balance is correct. However, the ending inventory figure was overstated by $33,000. Given this information, the correct gross profit would be:

$109,500

Cushman Company had $836,000 in sales, sales discounts of $12,540, sales returns and allowances of $18,810, cost of goods sold of $397,100, and $287,585 in operating expenses. Net income equals

$119,965

Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $112,000 in sales during the second quarter of this year. If it began the quarter with $19,200 of inventory at cost and purchased $73,200 of inventory during the quarter, its estimated ending inventory by the gross profit method is:

$14,000

A company's inventory records report the following in November of the current year: Beginning - November 1 - 5 units @ $10 Purchase - November 2- 10 units @ $12 Purchase - November 12 6 units @ $14 On November 8, it sold 12 units for $40 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?

$140

Garza Company had sales of $154,200, sales discounts of $2,325, and sales returns of $3,700. Garza Company's net sales equals:

$148,175 (Net Sales = Gross sales - Sales Discounts and Allowances - Discounts)

On December 31 of the current year, Plunkett Company reported an ending inventory balance of $217,500. The following additional information is also available: Plunkett sold and shipped goods costing $38,500 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point. The goods were not included in the ending inventory amount of $217,500. Plunkett purchased goods costing $44,500 on December 29. The goods were shipped FOB destination and were received by Plunkett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These goods were included in the ending inventory balance of $217,500. Plunkett's ending inventory balance of $217,500 included $15,500 of goods being held on consignment from Carole Company. (Plunkett Company is the consignee.) Plunkett's ending inventory balance of $217,500 did not include goods costing $95,500 that were shipped to Plunkett on December 27 with shipping terms of FOB destination and were still in transit at year-end. Based on the above information, the amount that Plunkett should report in ending inventory on December 31 is:

$157,500

Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $15,162. Franklin's August bank statement shows $15,837 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit$5,100 Outstanding checks$4,300 Bank service fees, not yet recorded by company$70 The bank collected on a note receivable, not yet recorded by the company$1,545 The adjusted cash balance should be:

$16,637

Prentice Company had cash sales of $95,525, credit sales of $84,200, sales returns and allowances of $2,200, and sales discounts of $3,975. Prentice's net sales for this period equal:

$173,550 (Net Sales = Gross sales - Sales Discounts and Allowances - Discounts)

Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $19,025. Clayborn's May bank statement shows $17,400 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit$5,800 Outstanding checks$5,000 Bank service fees, not yet recorded by company$45 A NSF check from a customer, not yet recorded by the company $780 The adjusted cash balance should be:

$18,200

A company purchases merchandise with a catalog price of $28,000. The company receives a 30% trade discount from the seller. The seller also offers credit terms of 3/10, n/30. Assuming no returns were made and that payment was made within the discount period, what is the net cost of the merchandise?

$19,012

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $5,300 Net sales: $82,000 Net purchases: $80,000 The company's gross margin ratio is 20%. Using the gross profit method, the estimated ending inventory value would be:

$19,700

Jammer Company uses a weighted average perpetual inventory system and reports the following: August 2- Purchase 20 units at $16.50 per unit. August 18- Purchase 22 units at $16.00 per unit. August 29- Sale 40 units. August 31- Purchase 25 units at $19.50 per unit. What is the per-unit value of ending inventory on August 31?

$19.26

A company purchased $2,900 of merchandise on July 5 with terms 1/10, n/30. On July 7, it returned $320 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:

$2,554 (2900-320) x 0.99

A company's normal selling price for its product is $27 per unit. However, due to market competition, the selling price has fallen to $22 per unit. This company's current FIFO inventory consists of 130 units purchased at $23 per unit. Net realizable value has fallen to $20 per unit. Calculate the value of this company's inventory at the lower of cost or market.

$2,600

Ryan Company deposits all cash receipts on the day they are received and makes all cash payments by check. Ryan's June bank statement shows $19,861 on deposit in the bank. Ryan's comparison of the bank statement to its cash account revealed the following: Deposit in transit 1,750O Outstanding checks 918 Additionally, a $36 check written and recorded by the company correctly, was recorded by the bank as a $63 deduction.The adjusted cash balance per the bank records should be:

$20,720

A buyer of $7,300 in merchandise inventory failed to take advantage of the vendor's credit terms of 3/15, n/45, and instead paid the invoice in full at the end of 45 days. By not taking advantage of the cash discount, the buyer lost the discount of:

$219

A company has net sales of $795,800 and cost of goods sold of $574,800. Its net income is $28,030. The company's gross margin and operating expenses, respectively, are:

$221,000 and $192,970

The following information is available for Fenton Manufacturing Company at June 30: Cash in bank account$7,755 Inventory of postage stamps$87 Money market fund balance$13,700 Petty cash balance$480 NSF checks from customers returned by bank$997 Postdated checks received from customers$716 Money orders$1,557 A nine-month certificate of deposit maturing on December 31 of current year$9,300 Based on this information, Fenton Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

$23,492

A company has beginning inventory of 24 units at a cost of $13.00 each on October 1. On October 5, it purchases 18 units at $14.00 per unit. On October 12 it purchases 28 units at $15.00 per unit. On October 15, it sells 54 units. Using the FIFO periodic inventory method, what is the value of the inventory at October 15 after the sale?

$240.00

A company had inventory on November 1 of 5 units at a cost of $15 each. On November 2, they purchased 14 units at $17 each. On November 6 they purchased 10 units at $20 each. On November 8, 12 units were sold for $50 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?

$279

Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows: Year 1 - Beginning inventory $123,000 Cost of goods purchased 250,600 Cost of goods available for sale 373,600 Ending inventory 130,600 Cost of goods sold $243,000 Year 2 - Beginning inventory $130,600 Cost of goods purchased 278,000 Cost of goods available for sale 408,600 Ending inventory 135,600 Cost of goods sold $273,000 Lucia Company made two errors: 1) ending inventory at the end of Year 1 was understated by $15,600 and 2) ending inventory at the end of Year 2 was overstated by $6,600. Given this information, the correct cost of goods sold figure for Year 2 would be:

$295,200

A company purchased $3,100 worth of merchandise. Transportation costs were an additional $270. The company returned $215 worth of merchandise and then paid the invoice within the 1% cash discount period. The total cost of this merchandise is:

$3,126.15 FIRST SUBTRACT RETURNS

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO. May 1- Beginning Inventory 170 units @ $12 (Units Acquired at cost) 5- Purchase 230 units @ $14 (Units Acquired at cost) 10- Sales 150 units @ $22 (Units Sold at Retail) 15- Purchase 110 units @ $15 (Units Acquired at cost) 24- Sales 100 units @ $23 (Units Sold at Retail)

$3,160

A company uses the periodic inventory system and had the following activity during the current monthly period. November 1:Beginning inventory 107 Units @ $10 November 5:Purchased 107 Units @ $26 November 8:Purchased 57 Units @ $25 November 16:Sold 154 Units @ $80 November 19:Purchased 50 Units @ $20 Using the weighted-average inventory method, the company's ending inventory would be:

$3,266

A company has net sales of $906,000 and cost of goods sold of $601,000. Its net income is $108,400. The company's gross margin and operating expenses, respectively, are:

$305,000 and $196,600

Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. June 1- Beginning inventory 16 units at $20 each June 15- Sale of 8 units for $50 each June 29- Purchase8 units at $25 each The cost of the ending inventory is:

$360

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4,400 Net sales: $44,000 Net purchases: $45,000 The company's gross margin ratio is 15%. Using the gross profit method, the cost of goods sold would be:

$37,400

The following information is available for Birch Company at December 31: Money market fund balance$2,940 Certificate of deposit maturing June 30 of next year$16,500 Postdated checks from customers$1,850 Cash in bank account$23,931 NSF checks from customers returned by bank$800 Cash in petty cash fund$350 Inventory of postage stamps$33 U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year$11,500 Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:

$38,721

Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales: August 2- 30 units were purchased at $11 per unit .August 18- 35 units were purchased at $13 per unit. August 29 32 units were sold. What is the amount of the cost of goods sold for this sale? (Round average cost per unit to 2 decimal places.)

$386.56

Bedrock Company reported a December 31 ending inventory balance of $416,000. The following additional information is also available: The ending inventory balance of $416,000 included $72,800 of consigned inventory for which Bedrock was the consignor. The ending inventory balance of $416,000 included $23,600 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. Based on this information, the correct balance for ending inventory on December 31 is:

$392,400

Salmone Company reported the following purchases and sales for its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using LIFO. May 1- Beginning Inventory 250 units @ $10 (Units Acquired at cost) 5- Purchase 270 units @ $12 (Units Acquired at cost) 10- Sales 190 units @ $20 (Units Sold at Retail) 15- Purchase 150 units @ $13 (Units Acquired at cost) 24- Sales 140 units @ $21 (Units Sold at Retail)

$4,110

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to the ending inventory using FIFO. May 1- Beginning Inventory 180 units @ $13 (Units acquired at cost) 5- Purchase235 units @ $15 (Units acquired at cost) 10- Sales 155 units @ $23 (Units Sold at retail) 15- Purchase115 units @ $16 (Units acquired at cost) 24- Sales 105 units @ $24 (Units Sold at retail)

$4,165

Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using FIFO. May 1- Beginning Inventory 200 units @ $15 (Units Acquired at cost) 5- Purchase 245 units @ $17 (Units Acquired at cost) 10- Sales 165 units @ $20 (Units Sold at Retail) 15- Purchase 125 units @ $18 (Units Acquired at cost) 24- Sales 115 units @ $26 (Units Sold at Retail)

$4,360

A company had the following purchases and sales during its first year of operations: Purchases - January: 10 units at $1557 February: 20 units at $1605 May: 15 units at $1659 September: 12 units at $1708 November: 10 units at $17511 Sales - January: 7 units February: 5 units May: 9 units September: 8 units November: 11 units On December 31, there were 27 units remaining in ending inventory. Using the perpetual LIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

$4,365

A flood destroyed a company's warehouse contents on September 12. The following information was the only information that was salvaged: Inventory, beginning: $29,800 Purchases for the period: $18,800 Sales for the period: $56,800 Sales returns for the period: $880 The company's average gross profit ratio is 22%. What is the estimated cost of the lost inventory using the gross profit method?

$4,982.40

Cushman Company had $836,000 in sales, sales discounts of $12,540, sales returns and allowances of $18,810, cost of goods sold of $397,100, and $287,585 in operating expenses. Gross profit equals:

$407,550

A company's inventory records report the following: August 1 - Beginning balance 30 units @ $20 August 5 - Purchase 25 units @ $19 August 12 - Purchase 29 units @ $20 On August 15, it sold 60 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?

$480

In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: Cash balance per company books on January 30$6,825 Deposits in transit at month-end$2,220 Outstanding checks at month-end$730 Bank service charges$46 EFT automatically deducted monthly, not yet recorded by Maxi$800 An NSF check returned on a customer account$475 The adjusted cash balance per the books on January 31 is:

$5,504

A company has beginning inventory of 11 units at a cost of $29 each on February 1. On February 3, it purchases 39 units at $31 each. 17 units are sold on February 5. Using the FIFO periodic inventory method, what is the cost of the 17 units that are sold?

$505

Jefferson Company has sales of $305,000 and cost of goods available for sale of $270,500. If the gross profit ratio is typically 30%, the estimated cost of the ending inventory under the gross profit method would be:

$57,000

In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information: Cash balance per company books on April 30 $6,235 Deposits in transit at month-end $1,380 Outstanding checks at month-end $700 Bank charge for printing new checks $85 Note receivable and interest collected by bank on Donahue's behalf $690 A check paid to Donahue during the month by a customer is returned by the bank as NSF$560 The adjusted cash balance per the books on April 30 is:

$6,280

Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO. May 1- Beginning Inventory 230 units @ $18 (Units Acquired at cost) 5- Purchase 260 units @ $20 (Units Acquired at cost) 10- Sales 240 units @ $30 (Units Sold at Retail) 15- Purchase 200 units @ $23 (Units Acquired at cost) 24- Sales 190 units @ $31 (Units Sold at Retail)

$6,330

Easton Co. deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on June 30, its Cash account shows a debit balance of $63,709. Easton's June bank statement shows $61,149 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit$4,850 Outstanding checks$2,275 Check printing fee, not yet recorded by company$22 Interest earned on account, not yet recorded by the company$37 The adjusted cash balance should be:

$63,724

A company had the following purchases during its first year of operations: Purchases January:27 units at $112 February:37 units at $123 May:32 units at $135 September:29 units at $143 November:27 units at $153 On December 31, there were 53 units remaining in ending inventory. These 53 units consisted of 9 from January, 10 from February, 14 from May, 8 from September, and 12 from November. Using the specific identification method, what is the cost of the ending inventory?

$7,108

Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to ending inventory using LIFO. May 1- Beginning Inventory 330 units @ $18 (Units Acquired at cost) 5- Purchase 310 units @ $20 (Units Acquired at cost) 10- Sales 230 units @ $28 (Units Sold at Retail) 15- Purchase 190 units @ $21 (Units Acquired at cost) 24- Sales 180 units @ $29 (Units Sold at Retail)

$7,740

Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to the ending inventory using FIFO. May 1- Beginning Inventory 320 units @ $17 (Units Acquired at cost) 5- Purchase 305 units @ $19 (Units Acquired at cost) 10- Sales 225 units @ $27 (Units Sold at Retail) 15- Purchase 185 units @ $20 (Units Acquired at cost) 24- Sales 175 units @ $28 (Units Sold at Retail)

$7,975

A company purchased $9,100 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $455 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:

$8,386

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO. May 1- Beginning Inventory 350 units @ $20 (Units Acquired at cost) 5- Purchase 320 units @ $22 (Units Acquired at cost) 10- Sales 240 units @ $30 (Units Sold at Retail) 15- Purchase 200 units @ $23 (Units Acquired at cost) 24- Sales 190 units @ $31 (Units Sold at Retail)

$8,990

On September 1 of the current year, Scots Company experienced a flood that destroyed the company's entire inventory. Because the company had not completed its month end reporting for August, it must estimate the amount of inventory lost using the gross profit method. At the beginning of August, the company reported beginning inventory of $216,250. Inventory purchased during August was $192,850. Sales for the month of August were $544,100. Assuming the company's typical gross profit ratio is 40%, estimate the amount of inventory destroyed in the flood.

$82,640

Grays Company has inventory of 11 units at a cost of $6 each on August 1. On August 3, it purchased 21 units at $9 each. 13 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 13 units that were sold?

$84

A company had beginning inventory of 11 units at a cost of $26 each on March 1. On March 2, it purchased 11 units at $46 each. On March 6 it purchased 5 units at $31 each. On March 8, it sold 25 units for $74 each. Using the FIFO perpetual inventory method, what was the cost of the 25 units sold?

$885

KLM Corporation's quick assets are $5,942,000, its current assets are $12,090,000 and its current liabilities are $8,034,000. Its acid-test ratio equals:

0.74 (Acid-test ratio = Quick Assets (Cash Equivalents)/ Current Liabilities)

A company's current assets are $22,700, its quick assets are $13,390 and its current liabilities are $13,800. Its quick ratio equals:

0.97 (Quick ratio = Quick Assets (Cash Equivalents)/ Current Liabilities)

A company's current assets are $29,920, its quick assets are $16,490 and its current liabilities are $12,870. Its acid-test ratio equals:

1.28

Beckenworth had cost of goods sold of $10,521 million, ending inventory of $3,189 million, and average inventory of $2,075 million. Its days' sales in inventory equals:

110.6 days (Inventory/ COGS) x 365

Using the following year-end information for Calvin's Clothing, calculate the current ratio and acid-test ratio for the business: Cash 52,070 Short-term investments 8,500 Accounts receivable 47,000 Inventory 160,000 Prepaid expenses 11,310 Accounts payable 102,500 Other current payables 30,300

2.10 and 0.81 (Current ratio = Current assets/ Current Liabilities)

A company has sales of $389,400 and its gross profit is $163,900. Its cost of goods sold equals:

225,500 (Gross profit = Sales - Cost of Goods Sold)

A company's gross profit (or gross margin) was $132,640 and its net sales were $512,500. Its gross margin ratio is:

25.9% (Total Revenue - Cost of Goods Sold)/ Total Revenue

A company had net sales of $817,600 and cost of goods sold of $577,290. Its net income was $32,010. The company's gross margin ratio equals:

29.4% (Total Revenue - Cost of Goods Sold)/ Total Revenue

Using the following year-end information for Bauman, LLC, calculate the current ratio and acid-test ratio: Cash $51,770 Short-term investments 10,800 Accounts receivable 44,500 Inventory249,000 Prepaid expenses 11,430 Accounts payable 93,500 Other current payables 25,000

3.10 and 0.90

A company had net sales of $31,400 and ending accounts receivable of $2,800 for the current period. Its days' sales uncollected equals: (Use 365 days a year.)

32.55 days

Sandoval needs to determine its year-end inventory. The warehouse contains 33,000 units, of which 4,300 were damaged by flood and are not sellable. Another 3,300 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 5,300 units at a consignee's location. How many units should Sandoval include in its year-end inventory?

37,300

Giorgio had cost of goods sold of $9,601 million, ending inventory of $2,269 million, and average inventory of $2,145 million. Its inventory turnover equals:

4.48 (COGS/ Average Inventory)

Use the following information for Shafer Company to compute inventory turnover for year 2. Net sales Year 2- $657,500 Year 1- $584,900 Cost of goods sold Year 2- 390,500 Year 1- 361,040 Ending inventory Year 2- 79,700 Year 1- 81,380

4.85

Mega Skateboard Supplier had net sales of $2.8 million, its cost of goods sold was $1.6 million, and its net income was $0.9 million. Its gross margin ratio equals:

43% (Total Revenue - Cost of Goods Sold)/ Total Revenue

A company's net sales are $833,470, its costs of goods sold are $455,075, and its net income is $115,590. Its gross margin ratio equals:

45.4% (Sales - COGS)/Sales

A company has sales of $756,200 and cost of goods sold of $303,200. Its gross profit equals:

453,000 (Gross profit = Sales - Cost of Goods Sold)

The following information is taken from Reagan Company's December 31 balance sheet: Cash and cash equivalents$10,119 Accounts receivable 78,922 Merchandise inventories 68,862 Prepaid expenses 5,800 Accounts payable$16,650 Notes payable 95,138 Other current liabilities 11,200 If net sales for the current year were $603,000, the firm's days' sales uncollected for the year is: (Use 365 days a year.)

47.8 days

A company's net sales were $705,800, its cost of goods sold was $241,380 and its net income was $50,150. Its gross margin ratio equals:

65.8% (Sales - COGS)/Sales

Assume that the custodian of a $450 petty cash fund has $61.90 in coins and currency plus $383.00 in receipts at the end of the month. The entry to replenish the petty cash fund will include:

A credit to Cash for $388.10.

Childers Company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $500. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts: December 4 - Freight charge for merchandise purchased$45 December 7 - Delivery charge for shipping to customer$69 December 12 - Purchase of office supplies$34 December 18 - Donation to charitable organization$53 If, in addition to these receipts, the petty cash fund contains $288.25 of cash, the journal entry to reimburse the fund on December 31 will include:

A credit to Cash of $211.75.

Assume that the custodian of a $480 petty cash fund has $72.50 in coins and currency plus $400.50 in receipts at the end of the month. The entry to replenish the petty cash fund will include:

A debit to Cash Over and Short for $7.00.

If a check correctly written and paid by the bank for $118 is incorrectly recorded in the company's books for $181, how should this error be treated on the bank reconciliation?

Add $63 to the book balance.

On February 3, Smart Company sold merchandise in the amount of $4,500 to Truman Company, with credit terms of 1/10, n/30. The cost of the items sold is $3,100. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:

Cash 4,455 Sales discounts 45 Accounts receivable 4,500

Spencer Co. has a $250 petty cash fund. At the end of the first month the accumulated receipts represent $48 for delivery expenses, $147 for merchandise inventory, and $17 for miscellaneous expenses. The fund has a balance of $38. The journal entry to record the reimbursement of the account includes a:

Credit to Cash for $212.

A company purchased $2,200 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $400 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is:

Debit Accounts Payable $1,800; credit Merchandise Inventory $36; credit Cash $1,764

At the end of the day, the cash register tape shows $1,140 in cash sales, but the count of cash in the register is $1,185. The proper entry to account for this excess is:

Debit Cash $1,185; credit Sales $1,140; credit Cash Over and Short $45.

At the end of the day, the cash register's record shows $1,268, but the count of cash in the cash register is $1,254. The correct entry to record the cash sales is

Debit Cash $1,254; debit Cash Over and Short $14; credit Sales $1,268.

A company had $57 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure is to:

Debit Cash Over and Short for $57.

Havermill Co. establishes a $360 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $84 for Office Supplies, $159 for merchandise inventory, and $33 for miscellaneous expenses. The fund has a balance of $84. On October 1, the accountant determines that the fund should be increased by $72. The journal entry to record the establishment of the fund on September 1 is:

Debit Petty Cash $360; credit Cash $360

A company wants to decrease its $200.00 petty cash fund to $150.00. The entry to reduce the fund is:

Debit to Cash $50.00; credit Petty Cash $50.00.

Havermill Co. establishes a $450 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $93 for Office Supplies, $177 for merchandise inventory, and $42 for miscellaneous expenses. The fund has a balance of $138. On October 1, the accountant determines that the fund should be increased by $90. The journal entry to record the reimbursement of the fund on September 30 includes a:

Debit to Office Supplies for $93

During the month of July, Clanton Industries issued a check in the amount of $734 to a supplier on account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation, the company should:

Deduct the check amount from the bank balance.

If a check correctly written and paid by the bank for $362 is incorrectly recorded in the company's books for $308, how should this error be treated on the bank reconciliation?

Subtract $54 from the book balance.