Question : 31) When inventory shipped from the seller to the buyer : 1230197

 

 

31) When inventory is shipped from the seller to the buyer with shipping terms of FOB destination:

A) title passes from the seller to the buyer when the goods leave the seller’s shipping dock.

B) the goods will be included in the inventory of the seller until they reach their destination.

C) the buyer owns the goods while they are in transit.

D) the goods will be included in the inventory of the buyer and the seller while they are in transit.

 

32) Company A has inventory out on consignment and held for sale by Company B. Which Company will include the goods in their inventory?

A) Company A

B) Company B

C) Either Company A or Company B

D) Cannot be determined from the facts

33) Using a perpetual inventory system, which of the following entries would record the cost of merchandise sold on credit?

A)

Sales Discounts

Accounts Payable

 

B)

Cost of Goods Sold

Purchases Discounts

 

C)

Cost of Goods Sold

Inventory

 

D)

Inventory

Cost of Goods Sold

 

 

34) Using a perpetual inventory system, which of the following entries would record the sale of merchandise sold on credit?

A)

Sales Discounts

Accounts Payable

 

B)

Accounts Receivable

Inventory

 

C)

Accounts Receivable

Cost of Goods Sold

 

D)

Accounts Receivable

Sale

 

35) If Martson and Co. make the following journal entries, they are using the ________ inventory system.

 

Accounts Receivable

25,000

Sales Revenue

25,000

 

Cost of Goods Sold

10,000

Inventory

10,000

 

A) periodic

B) perpetual

C) FIFO

D) LIFO

 

36) A company purchased inventory for $800 per unit. The company later sold the inventory for $1,000 per unit. The entries to record the sale for cash and cost of goods sold would include debits to which of the following accounts?

A) Sales, $1,000; Inventory, $800

B) Cash, $1,000; Cost of Goods Sold, $800

C) Cash, $800; Cost of Goods Sold, $1,000

D) Sales, $800; Inventory, $800

 

37) Under a perpetual inventory system, the journal entry to record the purchase of inventory will include a:

A) debit to Accounts Receivable.

B) debit to Inventory.

C) debit to Accounts Payable.

D) debit to Cost of Goods Sold.

38) Which of the following is a correct statement regarding shipping terms and freight costs?

A) Freight-out paid by the seller under shipping terms FOB destination is part of the cost of inventory.

B) Freight-out is added to the purchase price of the inventory.

C) Freight-out is the transportation cost paid by the buyer under the shipping terms FOB shipping point.

D) Freight-out paid by the seller is a delivery expense and not part of the cost of the inventory.

 

39) Martson and Co. made the following journal entries:

 

Accounts Receivable

25,000

Sales Revenue

25,000

 

Cost of Goods Sold

10,000

Inventory

10,000

 

What is Martson’s gross profit from this sale?

A) $10,000

B) $15,000

C) $25,000

D) $35,000

40) BMX Co. sells item XJ15 for $1,000 per unit, and has a cost of goods sold percentage of 80%. The gross profit to be found for selling 20 items:

A) is $4,000.

B) is $16,000.

C) is $20,000.

D) cannot be determined.