Question : 71.The term “FOB Destination” means A. The seller pays the shipping cost. B. The : 1254407

71.The term “FOB Destination” means   

A. The seller pays the shipping cost.

B. The buyer records an increase in inventory.

C. The buyer pays the shipping cost.

D. The buyer assumes ownership of the goods during shipment.

72.A discount given to encourage prompt payment is called:   

A. a cash discount.

B. a sales discount by the seller.

C. a purchase discount by the buyer.

D. all of these are correct.

73.Leonard Company paid freight costs to have goods shipped to one of its customers. What effect will these freight-out costs have on the company’s financial statements?     

A. Option A

B. Option B

C. Option C

D. Option D

74.Barstow Company uses the perpetual inventory system. The company purchased $8,000 of merchandise from Andrews Company under the terms 2/10, net/30. Bartstow paid for the merchandise within 10 days and also paid $250 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $15,000 cash. The amount of gross margin for this merchandise is:   

A. $6,910

B. $7,000

C. $8,000

D. $6,750

75.The credit terms, 2/10, n/30, indicate that a:   

A. ten percent discount can be deducted if the invoice is paid within two days following the date of sale.

B. two percent discount can be deducted for a period up to thirty days following the date of sale.

C. two percent discount can be deducted if the invoice is paid before the tenth day following the date of the sale.

D. two percent discount can be deducted if the invoice is paid after the tenth day following the sale, but before the thirtieth day.

76.Analyze the following T-account in the ledger of Goldstein Company.  If $5,000 in the Inventory account represents merchandise purchased from a supplier, we can assume the company uses the   

A. perpetual inventory method and $400 may represent a purchase return.

B. periodic inventory method and $400 may represent cost of goods sold.

C. perpetual inventory method and $400 may represent a purchase allowance.

D. Both A and C are correct.

77.The following entry is taken from the journal of a merchandising company:  This entry results in   

A. an increase in operating expenses.

B. an increase in Cost of Goods Sold.

C. an increase in inventory.

D. a decrease in gross margin.

78.Flowers Company purchased $4,000 of merchandise on account. Flowers sold the merchandise to a customer for $7,000 cash. What is the increase in gross margin and the net change in cash flow from operating activities as a result of these transactions?     

A. Option A

B. Option B

C. Option C

D. Option D

79.Victoria Garden Supply sold a piece of land for $38,000 that had originally cost $32,500. This event would   

A. increase cash flows from investing activities by $38,000.

B. not affect operating income.

C. increase net income by $5,500.

D. all of these.

80.Ardent Company uses the perpetual method. The company’s inventory account had a $6,500 balance as of December 31, 2013. A physical count of inventory shows only $5,800 of merchandise in stock at December 31, 2013. The entry to recognize the missing inventory will   

A. increase assets.

B. increase expense.

C. decrease cash flow from operating activities.

D. all of these.

Assume the perpetual inventory method is used.1) Grace Company purchased merchandise inventory that cost $16,000 under terms of 2/10, n/30 and FOB shipping point.2) The company paid freight cost of $600 to have the merchandise delivered.3) Payment was made to the supplier within 10 days.4) All of the merchandise was sold to customers for $23,500 cash and delivered under terms FOB destination with freight cost amounting to $400.