Q1

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

A.

seller will bear the freight cost.

B.

Inventory account will be increased.

C.

carrier will bear the freight cost.

D.

Inventory account will not be affected.

Q2

Financial information is presented below:

Operating Expenses	$ 40,000
Sales Revenue	150,000
Cost of Goods Sold	90,000

Gross profit would be

	A.	$20,000.
	B.	$60,000.
	C.	$150,000.
	D.	$110,000.

Q3

If the month-end bank statement shows a balance of $24,000, outstanding checks are $18,000, a deposit of $5,000 was in transit at month end, and a check for $1,000 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

	A.	$24,000.
	B.	$11,000.
	C.	$12,000.
	D.	$38,000.