A business purchased equipment for $140,000 on January 1, 2017. The equipment will be depreciated over the five years of its estimated useful life using the straight-line depreciation method. The business records depreciation once a year on December 31 Which of the following is the adjusting entry required to record depreciation on equipment for the […]
The Common Stock account is a permanent account. Indicate whether the statement is true or false ANSWER TRUE
The Salaries Expense account is a temporary account. Indicate whether the statement is true or false ANSWER TRUE
Under the perpetual inventory system, when a wholesaler returns the goods purchased on account, the ________ account is credited. A) Accounts Receivable B) Merchandise Inventory C) Cost of Goods Sold D) Accounts Payable ANSWER B
A company that uses a perpetual inventory system purchased inventory on account and later returned goods worth $500 to the vendor. Which of the following would be the correct journal entry to record these returns? A) Purchase Returns 500 Accounts Payable 500 B) Accounts Payable 500 Purchase Returns 500 C) Merchandise Inventory 500 Accounts Payable […]
Oscar Packers received an allowance from the vendor for an amount of $400. Give the journal entry for this transaction. The company uses a perpetual inventory system. What will be an ideal response ANSWER Accounts Payable 400 Merchandise Inventory 400
If goods are sold on terms FOB shipping point, the ________. A) seller normally pays the transportation costs B) buyer normally pays the transportation costs C) buyer and the seller split the transportation costs D) shipping company bears the transportation cost ANSWER B
Which of the following statements is true of a good merchandise inventory control system? A) It eliminates the need for authorization of merchandise purchases. B) It ensures that a physical count of inventory is not required. C) It often prevents the company from a stockout. D) It eliminates the need to examine inventory purchases for […]
The tracking of inventory shrinkage due to theft, damage, or errors is done with the help of a (n) ________ of inventory. A) authorization B) sale C) physical count D) delivery ANSWER C
The following are the current month’s balances for Toys Galore, Inc. before preparing the trial balance Accounts Payable $7,000 Revenue 6,000 Cash 2,000 Expenses 14,500 Furniture 11,000 Accounts Receivable 10,000 Common Stock ? Notes Payable 6,500 What amount should be shown for Common Stock on the trial balance? A) $39,000 B) $18,000 C) $13,500 D) […]
