ACC 201 Chapter 6 Connect MC

A company sold inventory for $1,200 that was purchased for $700. The company records which of the following when it sells the inventory using a perpetual inventory system? A. Debit Cost of Goods Sold $700; credit Inventory $700. B. Debit Inventory $700; credit Cost of Goods Sold $700. C. No entry is required for cost of goods sold and inventory. D. Debit Cost of Goods Sold $1,200; credit Inventory $1,200.

A

A manufacturer's inventory consists of what type of inventory? A. All of the other answers are included in a manufacturer's inventory. B. Raw materials. C. Work-in-process. D. Finished goods.

A

One of the major differences between service companies and retail or manufacturing companies is that retailers and manufacturers must account for: A. Inventory. B. Deferred revenue. C. Current assets. D. Selling expenses.

A

The cost of the goods that a company sold during a period is shown in its financial statements as ___________ and the cost of the goods that a company still has on hand at the end of the year is shown in the financial statements as ____________. A. Cost of goods sold; inventory. B. Goods on hand; inventory expense. C. Inventory; cost of goods sold. D. Sales revenue; cost of goods sold.

A

The type of income statement that classifies items as operating and nonoperating is the ______ income statement. A. Multiple-step. B. Classified. C. Consolidated. D. Single-step.

A

Cost of Goods Sold is: A. A permanent equity account. B. An expense account. C. An asset account. D. A revenue account.

B

Cost of goods sold equals: A. Net purchases + ending inventory - beginning inventory. B. Beginning inventory + net purchases - ending inventory. C. Beginning inventory - net purchases + ending inventory. D. Beginning inventory - accounts payable - net purchases.

B

The cost of unsold inventory at the end of the year is classified as a(n) ______ in the ______. A. Expense; Income statement B. Asset; Balance sheet C. Revenue; Income statement D. Liability; Balance sheet

B

Cost of Goods Sold is: A. An asset account. B. A revenue account. ​ C. An expense account. D. A permanent equity account.

C

In a perpetual inventory system, the purchase of inventory is debited to: A. Accounts Payable. B. Cost of Goods Sold. C. Inventory. D. Purchases.

C

Inventory does not include: A. Materials used in the production of goods to be sold. B. Assets intended to be sold in the normal course of business. C. Equipment used in the manufacturing of assets for sale. D. Assets currently in production for normal sales.

C

The cost of inventory sold during the current year is classified as a(n) ______ in the ______. A. Revenue; Income statement B. Asset; Balance sheet C. Expense; Income statement D. Liability; Balance sheet

C

Using a perpetual inventory system, the purchase of inventory on account is recorded with a: A. Debit to Accounts Payable. B. Debit to Cost of Goods Sold. C. Credit to Sales Revenue. D. Debit to Inventory.

D

What type of company purchases raw materials and makes goods to sell? A. Merchandiser. B. Wholesaler. C. Retailer. D. Manufacturer.

D