Originally Posted by
smartygirl129
8. The selected accounts and balances for Mammoth Mart appear as follows:
Advertising Expense $14,000
Freight In 7,000
Freight Out Expense 10,000
Interest Income 24,000
John Dugan, Capital 140,000
John Dugan, Withdrawals 21,000
Merchandise Inventory (Jan. 1) 70,000
Merchandise Inventory (Dec. 31) 56,000
Purchases 60,000
Purchases Returns and Allowances 4,000
Rent Expense 9,000
Sales 150,000
Sales Discounts 6,000
Sales Returns and Allowances 13,000
Wages Expense 32,000
Reference: Ref 5-4
Cost of goods available for sale would appear on the income statement as
A) $63,000.
B) $77,000.
C) $126,000.
D) $133,000.
9. The collection of a $400 account within the 2 percent discount period would result in a
A) debit to Sales Discounts for $8.
B) credit to Accounts Receivable for $392.
C) credit to Cash for $392.
D) debit to Accounts Receivable for $392.
10. The entry to record a sale of $750 with terms of 2/10, n/30 would include a
A) credit to Sales for $750.
B) debit to Sales for $735.
C) debit to Sales Discounts for $15.
D) credit to Accounts Receivable for $750.
11. The entry to record the return of goods from a customer would include a
A) debit to Sales Returns and Allowances.
B) credit to Sales.
C) debit to Sales.
D) credit to Sales Returns and Allowances.
12. Under the perpetual inventory system, in addition to making the entry to record a sale, a company would
A) make no additional entry until the end of the period.
B) debit Cost of Goods Sold and credit Merchandise Inventory.
C) debit Cost of Goods Sold and credit Purchases.
D) debit Merchandise Inventory and credit Cost of Goods Sold.
13. Under the perpetual inventory system, in addition to making the entry to record a sales return, a company would
A) debit Merchandise Inventory and credit Cost of Goods Sold.
B) make no additional entry until the end of the period.
C) debit Cost of Goods Sold and credit Merchandise Inventory.
D) debit Cost of Goods Sold and credit Purchases.
14. Under the perpetual inventory system, the entry to record a purchase return would include a credit to
A) Accounts Payable.
B) Purchases Returns and Allowances.
C) Cost of Goods Sold.
D) Merchandise Inventory.
15. Which of the following goods would not be included in merchandise inventory for a purchasing company?
A) Goods in transit shipped FOB destination
B) Goods ordered and received from the supplier
C) Goods in transit shipped FOB shipping point
D) Goods on hand in the showroom
16. Which of the following is not considered an operating expense?
A) Advertising expense
B) General office expenses
C) Freight out expense
D) Cost of goods sold
