1. Under a perpetual inventory system, acquisition of merchandisefor resale is debited to A) the Merchandise Inventory...
Question:
1. | Under a perpetual inventory system, acquisition of merchandisefor resale is debited to | |
| A) | the Merchandise Inventory account. |
| B) | the Purchases account. |
| C) | the Supplies account. |
| D) | the Cost of Goods Sold account. |
2. | The primary source of revenue for a wholesaler is | |
| A) | investment income. |
| B) | service revenue. |
| C) | the sale of merchandise. |
| D) | the sale of plant assets the company owns. |
3. | Under the perpetual inventory system, in addition to making theentry to record a sale, a company would | |
| A) | debit Merchandise Inventory and credit Cost of Goods Sold. |
| B) | debit Cost of Goods Sold and credit Purchases. |
| C) | debit Cost of Goods sold and credit Merchandise Inventory. |
| D) | make no additional entry until the end of the period. |
4. | Which of the following should not be includedin the physical inventory of a company? | |
| A) | Goods held on consignment from another company. |
| B) | Goods in transit from another company shipped FOB shippingpoint. |
| C) | Goods shipped on consignment to another company. |
| D) | All of the above should be included. |
5. | Which of the following items does not result in an adjustment inthe merchandise inventory account under a perpetual system? | |
| A) | A purchase of merchandise. |
| B) | A return of merchandise inventory to the supplier |
| C) | Payment of freight costs for goods shipped to a customer |
| D) | Payment of freight costs for goods received from a supplier |
Expert Answer:
1 A the Merchandise Inventory account 2 C the sale of merchandise 3 C debit Cost of Goods sold and c... View the full answer
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
