CHAPTER 5

CHAPTER 5 c.
two journal entries are necessary: one to record the

receipt of cash and sales revenue, and one to record the
1. (LO 1) Gross profi t will result if:
cost of goods sold and reduction of inventory.
a. operating expenses are less than net income.
d. two journal entries are necessary: one to record the
b. net sales are greater than operating expenses. receipt of cash and reduction of inventory, and one to
record the cost of goods sold and sales revenue.
c. net sales are greater than cost of goods sold.
7. (LO 4) The steps in the accounting cycle for a
d. operating expenses are greater than cost of goods sold. merchandising company are the same as those in a
2. (LO 2) Under a perpetual inventory system, when service company except:
goods are purchased for resale by a company: a. an additional adjusting journal entry for inventory may
a. purchases on account are debited to Inventory. be needed in a merchandising company.
b. purchases on account are debited to Purchases. b. closing journal entries are not required for a
merchandising company.
c. purchase returns are debited to Purchase Returns and
c. a post-closing trial balance is not required for a
Allowances. merchandising company.
d. freight costs are debited to Freight-Out. d. a multiple-step income statement is required for a
3. (LO 3) The sales accounts that normally have a debit merchandising company.
balance are: 8. (LO 5) The multiple-step income statement for a
a. Sales Discounts. merchandising company shows each of the following
features except:
b. Sales Returns and Allowances.
a. gross profit.
c. Both (a) and (b).
b. cost of goods sold.
d. Neither (a) nor (b).
c. a sales section.
4. (LO 3) A credit sale of $750 is made on June 13, terms
2/10, net/30. A return of $50 is granted on June 16. The d. an investing activities section.
amount received as payment in full on June 23 is: 9. (LO 5) If net sales are $400,000, cost of goods sold is
a. $700. c. $685. $310,000,
b. $686. d. $650. and operating expenses are $60,000, the gross profi t is:
5. (LO 2) Which of the following accounts will normally a. $30,000. c. $340,000.

appear in the ledger of a merchandising company that b. $90,000. d. $400,000.
uses a perpetual inventory system?
10. (LO 5) A single-step income statement:
a. Purchases. c. Cost of Goods Sold.
a. reports gross profit.
b. Freight-In. d. Purchase Discounts.
b. does not report cost of goods sold.
6. (LO 3) To record the sale of goods for cash in a
perpetual inventory system: c. reports sales revenue and “Other revenues and gains”
in the revenues section of the income statement.
a. only one journal entry is necessary to record cost of
goods sold and reduction of inventory. d. reports operating income separately.
b. only one journal entry is necessary to record the

receipt of cash and the sales revenue.
11. (LO 5) Which of the following appears on both a
single-step and
a multiple-step income statement?
a. Inventory.
b. Gross profi t.
c. Income from operations.
d. Cost of goods sold.
*12. (LO 6) In a worksheet using a perpetual inventory

system, Inventory is shown in the following columns:
a. adjusted trial balance debit and balance sheet debit.
b. income statement debit and balance sheet debit.
c. income statement credit and balance sheet debit.
d. income statement credit and adjusted trial balance

debit. *13. (LO 7) In determining cost of goods sold in a
periodic system:
a. purchase discounts are deducted from net purchases.
b. freight-out is added to net purchases.
c. purchase returns and allowances are deducted from net

purchases.
d. freight-in is added to net purchases.
*14. (LO 7) If beginning inventory is $60,000, cost of

goods purchased is $380,000, and ending inventory is
$50,000, cost of goods sold is:
a. $390,000. c. $330,000.
b. $370,000. d. $420,000.
*15. (LO 7) When goods are purchased for resale by a

company using
a periodic inventory system:
a. purchases on account are debited to Inventory.
b. purchases on account are debited to Purchases.
c. purchase returns are debited to Purchase Returns and

Allowances.
d. freight costs are debited to Purchases.

CHAPTER 5

Uploaded by

Copyright:

Available Formats

CHAPTER 5

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CHAPTER 5

Uploaded by

Copyright:

Available Formats

CHAPTER 5 c.

two journal entries are necessary: one to record the

5. (LO 2) Which of the following accounts will normally a. $30,000. c. $340,000.

b. only one journal entry is necessary to record the

a multiple-step income statement?

c. Income from operations.

d. Cost of goods sold.

*12. (LO 6) In a worksheet using a perpetual inventory

a. adjusted trial balance debit and balance sheet debit.

b. income statement debit and balance sheet debit.

c. income statement credit and balance sheet debit.

d. income statement credit and adjusted trial balance

a. purchase discounts are deducted from net purchases.

b. freight-out is added to net purchases.

c. purchase returns and allowances are deducted from net

d. freight-in is added to net purchases.

*14. (LO 7) If beginning inventory is $60,000, cost of

*15. (LO 7) When goods are purchased for resale by a

a periodic inventory system:

a. purchases on account are debited to Inventory.

b. purchases on account are debited to Purchases.

c. purchase returns are debited to Purchase Returns and

d. freight costs are debited to Purchases.

You might also like