[Solved] ACC 201 Quiz 2
ACC201 Test #1
Multiple choice questions 1 pt. each
1) Which of the following line items will appear on the income statement of a merchandiser but not of a service company?
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[Solved] ACC 201 Quiz 2
ACC201 Test #1
Multiple choice questions 1 pt. each
1) Which of the following line items will appear on the income statement of a merchandiser but not of a service company?
2) What does "2/10" mean, with respect to "credit terms of 2/10, n/30"?
3) A company sold merchandise with a cost of $231 for $480 on account. The seller uses the perpetual inventory system. The entry to record the cost of merchandise sold would include ________.
4) The general ledger shows a balance of $66,400 in the Merchandise Inventory account at the end of the period. The physical inventory count shows inventory of $63,000. The adjusting entry includes a ________.
5) Which of the following is subtracted from net sales revenue to arrive at gross profit on a multi-step income statement?
6) Changing from the LIFO (Last-In, First-Out) to the specific identification method of valuing inventory ignores the principle of ________.
7) A company purchased 400 units for $20 each on January 31. It purchased 200 units for $30 each on February 28. It sold a total of 270 units for $90 each from March 1 through December 31. If the company uses the last-in, first-out inventory costing method, calculate the amount of ending inventory on December 31. (Assume that the company uses a perpetual inventory system.)
8) Which of the following inventory costing methods yields the lowest cost of goods sold during a period of rising inventory costs?
9) Best Deals, Inc. has 13 units in ending merchandise inventory on December 31. The units were purchased in November for $155 each. The price lists from suppliers indicate the current replacement cost of the item to be $161 each. What would be the amount reported as Merchandise Inventory on the balance sheet?
10) The ending merchandise inventory for the current year is overstated by $28,000. What effect will this error have on the following year's net income?
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