A merchandiser sold merchandise inventory on account. The journal entry to record sales allowances in the books of the merchandiser, using the perpetual inventory system would be: A) Sales Returns and Allowances XX Accounts Receivable XX B) Merchandise Inventory XX Sales Revenue XX C) Cost of Goods Sold XX Sales Returns and Allowances XX D) […]
On October 1, 2016, Smith Service Company paid $5,000 in rent for the next five months, beginning with October 2016. On that date, Smith debited Prepaid Rent and credited Cash If Smith fails to make an adjusting entry on December 31, 2016, indicate the effect on assets, liabilities, equity, and net income. Understated, Overstated, No […]
During December 2016, Carroll Service Company performed $1,500 of services, but as of December 31, 2016, Carroll has not yet billed the clients If Carroll fails to make an adjusting entry on December 31, 2016, indicate the effect on assets, liabilities, equity, and net income. Understated, Overstated, No Effect Assets Liabilities Equity Net Income What […]
When a seller grants a sales allowance, the customer does not return any goods to the seller. Indicate whether the statement is true or false ANSWER TRUE
Vaughn Services hires a new accountant to maintain its petty cash fund. Although the employee possesses an accounting degree, he/she had been previously convicted of embezzlement Which internal control procedure needs to be addressed in the above situation? A) assignment of responsibilities B) competent, reliable, and ethical personnel C) separation of duties D) documents ANSWER […]
Rodriguez, Inc had the following balances and transactions during 2017, from January 1 to December 31: Beginning Merchandise Inventory 300 units at $80 March 10 Sold 150 units June 10 Purchased 600 units at $82 October 30 Sold 450 units What would be reported for Ending Merchandise Inventory on the balance sheet at December 31, […]
When a customer returns goods to the seller, the seller debits the Purchase Returns account. Indicate whether the statement is true or false ANSWER FALSE
Campaign Services hired a new accounting manager. He signed a contract for a new accounting information system, but his position did not specify whether he was authorized to do so or not In the above situation, which internal control procedure needs strengthening? A) assignment of responsibilities B) competent, reliable, and ethical personnel C) separation of […]
When a merchandiser records sales returns, Accounts Receivable is credited. (Assume the seller uses the perpetual inventory system.) Indicate whether the statement is true or false ANSWER TRUE
A company purchased 110 units for $40 each on January 31. It purchased 200 units for $25 each on February 28. It sold 200 units for $50 each from March 1 through December 31 If the company uses the weighted-average inventory costing method, calculate the amount of Cost of Goods Sold on the income statement […]
