Question :
81. Good, Inc. sold inventory for $1,200 that was purchased for : 1236178
81. Good, Inc. sold inventory for $1,200 that was purchased for $700. Good records which of the following when it sells inventory using a periodic inventory system?
A. No entry is required for cost of goods sold and inventory.
B. Debit Cost of Goods Sold $700; credit Inventory $700.
C. Debit Cost of Goods Sold $1,200; credit Inventory $1,200.
D. Debit Inventory $700; credit Cost of Goods Sold $700.
82. Davis Hardware Company uses a periodic inventory system. How should Davis record the sale of inventory costing $620 for $960 on account?
A.
B.
C.
D.
83. Ace Bonding Company purchased inventory on account. The inventory costs $2,000 and is expected to sell for $3,000. How should Ace record the purchase using a periodic inventory system?
A.
B.
C.
D.
84. On May 1, Ace Bonding Company purchased inventory costing $2,000 on account with terms 2/10, n/30. On May 8, Ace pays for this inventory and records which of the following using a periodic inventory system?
A.
B.
C.
D.
85. On May 1, Ace Bonding Company purchased inventory costing $2,000 on account with terms 2/10, n/30. On May 18, Ace pays for this inventory and records which of the following using a periodic inventory system?
A.
B.
C.
D.
86. If a company overstates its ending balance of inventory in year 1 and it records inventory correctly in year 2, which one of the following is true?
A. Net income is overstated in year 2.
B. Cost of goods sold is overstated in year 1.
C. Net income is understated in year 1.
D. Retained earnings is overstated in year 1.
87. If a company understates its ending balance of inventory in year 1 and it records inventory correctly in year 2, which one of the following is true?
A. Net income is overstated in year 1.
B. Cost of goods sold is understated in year 2.
C. Net income is understated in year 2.
D. Retained earnings is understated in year 2.
88. If a company understates its count of ending inventory in Year 1, which of the following is true?
A. Costs of good sold is understated at the end of Year 1.
B. Profit is correct in Year 2.
C. The balance of retained earnings is overstated at the end of Year 1.
D. The balance of retained earnings is correct at the end of Year 2.
89. Bill Inc.’s correct ending balance for the inventory account at the end of 2012 should be $5,000, but the company incorrectly stated it as $3,000. In 2013, Bill correctly recorded its ending balance of the inventory account. Which one of the following is true?
A. Gross profit is overstated by $2,000 in 2012.
B. Retained earnings are understated by $2,000 in 2013.
C. Gross profit is overstated by $2,000 in 2013.
D. Cost of goods sold is understated by $2,000 in 2012.
90. Suppose that Hastings Corporation overstates its ending inventory for 2012. What effect will this have on the reported amount of cost of goods sold for 2012?
A. Overstate cost of goods sold.
B. Understate cost of goods sold.
C. Have no effect on cost of goods sold.
D. Cannot be determined given the information provided.
