Question : 116.Juniper Company, Inc. uses a perpetual inventory system. The company : 1258798

 

 

116.Juniper Company, Inc. uses a perpetual inventory system. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the payment on August 16 is:    

A.Debit Merchandise Inventory $8,250; credit Cash $8,250.

 

B.Debit Cash $8,250; credit Accounts Payable $8,250.

 

C.Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50.

 

D.Debit Accounts Payable $9,750; credit Merchandise Inventory $97.50; credit Cash $9,652.50.

 

E.Debit Accounts Payable $8,167.50; credit Cash $8,167.50.

Cash Paid = ($9,750 – $1,500) * .99 = $8,167.50

 

 

 

117.A company records the following journal entry: debit Cash $1,470, debit Sales Discounts $30, and credit Accounts Receivable $1,500. This means that a customer has taken what percentage cash discount for early payment?   

A.1%

 

B.2%

 

C.5%

 

D.10%

 

E.15%

Discount = $30/$1,500 = 2%

 

 

 

118.All of the following statements regarding inventory shrinkage are true except:   

A.Inventory shrinkage refers to the loss of inventory.

 

B.Inventory shrinkage is determined by comparing a physical count of inventory with recorded inventory amounts.

 

C.Inventory shrinkage is recognized by debiting an operating expense.

 

D.Inventory shrinkage is recognized by debiting Cost of Goods Sold.

 

E.Inventory shrinkage can be caused by theft or deterioration.

 

 

 

 

119.Frisco Company Inc.’s Merchandise Inventory account at the end of year 2015 has a balance of $62,115, but a physical count reveals that only $61,900 of inventory exists. The adjusting entry to record this $215 of inventory shrinkage is:    

A.Merchandise Inventory215

Inventory shrinkage expense215

 

 

B.Purchases discounts215

Cost of goods sold215

 

 

C.Cost of goods sold215

Purchases discounts215

 

 

D.Inventory shrinkage expense215

Cost of goods sold215

 

 

E.Cost of Goods Sold215

Merchandise Inventory215

 

 

 

 

 

120.Which of the following accounts would be closed at the end of the accounting period with a debit?    

A.Sales Discounts.

 

B.Sales Returns and Allowances.

 

C.Cost of Goods Sold.

 

D.Operating Expenses.

 

E.Sales.

 

 

 

 

121.An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:   

A.Balanced income statement.

 

B.Single-step income statement.

 

C.Multiple-step income statement.

 

D.Combined income statement.

 

E.Simplified income statement.

 

 

 

 

122.Expenses that support the overall operations of a business and include the expenses relating to accounting, human resource management, and financial management are called:   

A.Cost of goods sold.

 

B.Selling expenses.

 

C.Purchasing expenses.

 

D.General and administrative expenses.

 

E.Non-operating activities.

 

 

 

 

123.Prentice Company, Inc. had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Prentice’s net sales for this period equal:   

A.$94,275.

 

B.$172,550.

 

C.$174,250.

 

D.$176,025.

 

E.$177,725.

Net Sales = $94,275 + $83,450 – $1,700 – $3,475 = $172,550

 

 

 

124.Multiple-step income statements:   

A.Are required by the FASB and IASB.

 

B.Contain more detail than a simple listing of revenues and expenses.

 

C.Are required for the periodic inventory system.

 

D.List cost of goods sold as an operating expense.

 

E.Are only used in perpetual inventory systems.

 

 

 

 

125.Expenses to promote sales by displaying and advertising merchandise, making sales, and delivering goods to customers are known as:   

A.General and administrative expenses.

 

B.Cost of goods sold.

 

C.Selling expenses.

 

D.Purchasing expenses.

 

E.Non-operating activities.