Question : 118.Assume a company uses the periodic inventory system and has : 1244374

118.Assume a company uses the periodic inventory system and has a beginning merchandise inventory balance of $5,000, purchases of $75,000, and sales of $125,000. The company closes its records once a year on December 31. In the accounting records, the merchandise inventory account would be expected to have a balance on December 31 prior to adjusting and closing entries that was

 

a.

more than $5,000.

b.

less than $5,000.

c.

equal to $5,000.

d.

indeterminate.

 

 

 

119.Which of the following accounts is irrelevant in the calculation of cost of goods sold?

 

a.

Purchases Returns and Allowances

b.

Freight-In

c.

Ending Merchandise Inventory

d.

Income Taxes

 

 

 

120.Under the periodic inventory system, when a customer returns goods for credit, the merchandiser would debit

 

a.

Sales Returns and Allowances and credit Accounts Receivable.

b.

Accounts Receivable and credit Purchases Returns and Allowances.

c.

Merchandise Inventory and credit Accounts Receivable.

d.

Accounts Receivable and credit Sales.

 

 

 

121.Under the periodic inventory system, when a merchandiser returns goods to its supplier for credit, the merchandiser would debit

 

a.

Accounts Payable and credit Purchases.

b.

Accounts Payable and credit Purchases Returns and Allowances.

c.

Purchases Returns and Allowances and credit Purchases.

d.

Accounts Payable and credit Merchandise Inventory.

 

 

 

122.Use this information to answer the following question.

 

Chupka Company experienced the following events during the period:

 

1. A tabulation of invoices at the end of the day showed $800 in MasterCard invoices, which were deposited in a bank account at full value less a 5 percent discount.

2. Made a sale on an American Express card for $400 and mailed an invoice to American Express for payment. The discount charged by American Express is 4 percent.

3. Received payment from American Express at 96 percent of face value.

 

The entry to record transaction 1 would include a

 

a.

debit to Cash for $800.

b.

debit to Accounts Receivable for $760.

c.

credit to Sales for $760.

d.

debit to Credit Card Expense for $40.

 

 

 

123.Use this information to answer the following question.

 

Chupka Company experienced the following events during the period:

 

1. A tabulation of invoices at the end of the day showed $800 in MasterCard invoices, which were deposited in a bank account at full value less a 5 percent discount.

2. Made a sale on an American Express card for $400 and mailed an invoice to American Express for payment. The discount charged by American Express is 4 percent.

3. Received payment from American Express at 96 percent of face value.

 

The entry to record transaction 2 would include a

 

a.

debit to Credit Card Expense for $16.

b.

debit to Accounts Receivable for $400.

c.

debit to Cash for $384.

d.

credit to Sales for $400.

 

 

 

124.Use this information to answer the following question.

 

Chupka Company experienced the following events during the period:

 

1. A tabulation of invoices at the end of the day showed $800 in MasterCard invoices, which were deposited in a bank account at full value less a 5 percent discount.

2. Made a sale on an American Express card for $400 and mailed an invoice to American Express for payment. The discount charged by American Express is 4 percent.

3. Received payment from American Express at 96 percent of face value.

 

The entry to record transaction 3 would include a

 

a.

credit to Sales for $400.

b.

debit to Cash for $400.

c.

debit to Credit Card Expense for $16.

d.

credit to Accounts Receivable for $384.

 

 

 

125.A retailer accepted Visa charge sales totaling $500 and deposited the charge slips in the bank. Assuming a credit card discount expense of 4 percent, what would be the debit to Cash and the credit to Sales, respectively?

 

a.

$500 and $500

b.

$480 and $480

c.

$480 and $500

d.

$500 and $480

 

 

 

126.Which of the following is not a primary concern of internal control?

 

a.

Accuracy of accounting records

b.

Fairness of financial statements

c.

Efficiency of company operations

d.

Safeguarding of assets

 

 

 

127.All of the following are examples of internal control activities, except

 

a.

centralization of duties.

b.

bank reconciliations.

c.

rotation of key personnel.

d.

insistence that employees take earned vacations.