f a company determines cost of goods sold each time a sale occurs, it a. must have a computer accounting system. b. uses a combination of the perpetual and periodic inventory systems. c. uses a periodic inventory system. d. uses a perpetual inventory sy

f a company determines cost of goods sold each time a sale occurs, it a. must have a computer accounting system.
b. uses a combination of the perpetual and periodic inventory systems.
c. uses a periodic inventory system.
d. uses a perpetual inventory sy
by

1 Answer

Answer :

a. must have a computer accounting system.
by

Related questions

Which of the following is a true statement about inventory systems? a. Periodic inventory systems require more detailed inventory records. b. Perpetual inventory systems require more detailed inventory records. c. A periodic system requires cost of goods sold be determined after each sale. d. A perpetual system determines cost of goods sold only at the end of the accounting period.

Description : Which of the following is a true statement about inventory systems? a. Periodic inventory systems require more detailed inventory records. b. Perpetual inventory systems require more detailed inventory ... perpetual system determines cost of goods sold only at the end of the accounting period.

Last Answer : b. Perpetual inventory systems require more detailed inventory records.

Cost of goods sold is determined only at the end of the accounting period in a. a perpetual inventory system. b. a periodic inventory system. c. both a perpetual and a periodic inventory system. d. neither a perpetual nor a periodic inventory system.

Description : Cost of goods sold is determined only at the end of the accounting period in a. a perpetual inventory system. b. a periodic inventory system. c. both a perpetual and a periodic inventory system. d. neither a perpetual nor a periodic inventory system.

Last Answer : b. a periodic inventory system.

In a perpetual inventory system, the Cost of Goods Sold account is used a. only when a cash sale of merchandise occurs. b. only when a credit sale of merchandise occurs. c. only when a sale of merchandise occurs. d. whenever there is a sale of merchandise or a return of merchandise sold.

Description : In a perpetual inventory system, the Cost of Goods Sold account is used a. only when a cash sale of merchandise occurs. b. only when a credit sale of merchandise occurs. c. only when a sale of merchandise occurs. d. whenever there is a sale of merchandise or a return of merchandise sold.

Last Answer : b. only when a credit sale of merchandise occurs.

In a perpetual inventory system, cost of goods sold is recorded a. on a daily basis. b. on a monthly basis. c. on an annual basis. d. with each sale.

Description : In a perpetual inventory system, cost of goods sold is recorded a. on a daily basis. b. on a monthly basis. c. on an annual basis. d. with each sale.

Last Answer : d. with each sale.

A physical count of inventory is taken at the end of an accounting period under a perpetual system in order to a. verify the accuracy of the accounting records. b. determine cost of goods sold for the period. c. determine the amount of inventory purchased during the period. d. calculate property taxes.

Description : A physical count of inventory is taken at the end of an accounting period under a perpetual system in order to a. verify the accuracy of the accounting records. b. determine cost of ... period. c. determine the amount of inventory purchased during the period. d. calculate property taxes.

Last Answer : a. verify the accuracy of the accounting records.

Detailed records of goods held for resale are not maintained under a a. perpetual inventory system. b. periodic inventory system. c. double entry accounting system. d. single entry accounting system.

Description : Detailed records of goods held for resale are not maintained under a a. perpetual inventory system. b. periodic inventory system. c. double entry accounting system. d. single entry accounting system.

Last Answer : b. periodic inventory system.

A physical count of inventory is taken at the end of an accounting period under a periodic system in order to a. verify the accuracy of the accounting records. b. determine cost of goods sold for the period. c. determine the amount of inventory purchased during the period. d. calculate property taxes.

Description : A physical count of inventory is taken at the end of an accounting period under a periodic system in order to a. verify the accuracy of the accounting records. b. determine cost of goods ... period. c. determine the amount of inventory purchased during the period. d. calculate property taxes.

Last Answer : b. determine cost of goods sold for the period.

Under a perpetual inventory system, acquisition of merchandise is debited to the a. Merchandise Inventory account. b. Cost of Goods Sold account. c. Purchases account. d. Accounts Payable account.

Description : Under a perpetual inventory system, acquisition of merchandise is debited to the a. Merchandise Inventory account. b. Cost of Goods Sold account. c. Purchases account. d. Accounts Payable account.

Last Answer : a. Merchandise Inventory account.

he journal entry to record a return of merchandise purchased on account under a perpetual inventory system would include a. Accounts Payable Sales Returns and Allowances b. Purchase Returns and Allowances Accounts Payable c. Accounts Payable Inventory d. Merchandise Inventory Cost of Goods Sold

Description : he journal entry to record a return of merchandise purchased on account under a perpetual inventory system would include a. Accounts Payable Sales Returns and Allowances b. Purchase Returns and ... Accounts Payable c. Accounts Payable Inventory d. Merchandise Inventory Cost of Goods Sold

Last Answer : d. Merchandise Inventory Cost of Goods Sold

In a perpetual inventory system, a return of defective merchandise by a cash customer is recorded by crediting a. Accounts Payable and Cash. b. Merchandise Inventory and Cost of Goods Sold c. Purchases Returns and Allowances and Merchandise Inventory. d. .Cash and Cost of Goods Sold.

Description : In a perpetual inventory system, a return of defective merchandise by a cash customer is recorded by crediting a. Accounts Payable and Cash. b. Merchandise Inventory and Cost of Goods Sold c. Purchases Returns and Allowances and Merchandise Inventory. d. .Cash and Cost of Goods Sold.

Last Answer : d. .Cash and Cost of Goods Sold.

Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account.

Description : Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account.

Last Answer : d. Cost of Goods Sold account.

When a periodic inventory system is used, cost of goods sold is calculated as follows: a. Ending inventory plus purchases less beginning inventory. b. Beginning inventory plus purchases less ending inventory c. Cost of merchandise purchased less ending inventory. d. Cost of merchandise sold plus beginning inventory.

Description : When a periodic inventory system is used, cost of goods sold is calculated as follows: a. Ending inventory plus purchases less beginning inventory. b. Beginning inventory plus purchases less ... of merchandise purchased less ending inventory. d. Cost of merchandise sold plus beginning inventory.

Last Answer : b. Beginning inventory plus purchases less ending inventory

A merchandising company using a perpetual system may record an adjusting entry by a. debiting Income Summary. b. crediting Income Summary. c. debiting Cost of Goods Sold. d. debiting Sales.

Description : A merchandising company using a perpetual system may record an adjusting entry by a. debiting Income Summary. b. crediting Income Summary. c. debiting Cost of Goods Sold. d. debiting Sales.

Last Answer : d. debiting Sales.

At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000, the company’s cost of goods sold and gross profit rate must be a. $1,000,000 and 50%. b. $1,400,000 and 30%. c. $1,000,000 and 30%.

Description : At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000 ... a. $1,000,000 and 50%. b. $1,400,000 and 30%. c. $1,000,000 and 30%.

Last Answer : b. $1,400,000 and 30%.

Net purchases plus freight-in determines a. cost of goods sold. b. cost of goods available for sale. c. cost of goods purchased. d. total goods available for sale.

Description : Net purchases plus freight-in determines a. cost of goods sold. b. cost of goods available for sale. c. cost of goods purchased. d. total goods available for sale.

Last Answer : c. cost of goods purchased.

. If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the a. Merchandise Inventory account will be increased. b. Merchandise Inventory account will not be affected. c. seller will bear the freight cost. d. carrier will bear the freight cost.

Description : . If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the a. Merchandise Inventory account will be increased. b. Merchandise Inventory account will not be affected. c. seller will bear the freight cost. d. carrier will bear the freight cost.

Last Answer : a. Merchandise Inventory account will be increased.

The Merchandise Inventory account is used in each of the following except the entry to record a. goods purchased on account. b. the return of goods purchased. c. payment of freight on goods sold. d. payment within the discount period.

Description : The Merchandise Inventory account is used in each of the following except the entry to record a. goods purchased on account. b. the return of goods purchased. c. payment of freight on goods sold. d. payment within the discount period.

Last Answer : c. payment of freight on goods sold.

Which of the following accounts is not closed to Income Summary? a. Cost of Goods Sold b. Merchandise Inventory c. Sales d. Sales Discounts

Description : Which of the following accounts is not closed to Income Summary? a. Cost of Goods Sold b. Merchandise Inventory c. Sales d. Sales Discounts

Last Answer : b. Merchandise Inventory

On October 4, 2008, Terry Corporation had credit sales transactions of $2,800 from merchandise having cost $1,900. The entries to record the day's credit transactions include a a. debit of $2,800 to Merchandise Inventory. b. credit of $2,800 to Sales. c. debit of $1,900 to Merchandise Inventory. d. credit of $1,900 to Cost of Goods Sold.

Description : On October 4, 2008, Terry Corporation had credit sales transactions of $2,800 from merchandise having cost $1,900. The entries to record the day's credit transactions include a a. debit of $2,800 to ... c. debit of $1,900 to Merchandise Inventory. d. credit of $1,900 to Cost of Goods Sold.

Last Answer : b. credit of $2,800 to Sales.

Gross profit is calculated by subtracting ________ from _________, a. operating expenses, net income b. sales discounts from sales revenue c. cost of goods sold, net sales revenue d. merchandise inventory, cost of goods sold

Description : Gross profit is calculated by subtracting ________ from _________, a. operating expenses, net income b. sales discounts from sales revenue c. cost of goods sold, net sales revenue d. merchandise inventory, cost of goods sold

Last Answer : c. cost of goods sold, net sales revenue

Which of the following accounts has a normal debit balance? a. Merchandise Inventory b. Sales Returns and Allowances c. Cost of goods sold d. Sales

Description : Which of the following accounts has a normal debit balance? a. Merchandise Inventory b. Sales Returns and Allowances c. Cost of goods sold d. Sales

Last Answer : d. Sales

Cost of goods available for sale is computed by adding a. freight-in to net purchases. b. beginning inventory to net purchases. c. beginning inventory to purchases and freight-in. d. beginning inventory to cost of goods purchased.

Description : Cost of goods available for sale is computed by adding a. freight-in to net purchases. b. beginning inventory to net purchases. c. beginning inventory to purchases and freight-in. d. beginning inventory to cost of goods purchased.

Last Answer : d. beginning inventory to cost of goods purchased.

Baden Shoe Store has a beginning merchandise inventory of $30,000. During the period, purchases were $140,000; purchase returns, $4,000; and freight-in $10,000. A physical count of inventory at the end of the period revealed that $20,000 was still on hand. The cost of goods available for sale was a. $164,000. b. $156,000. c. $176,000. d. $184,000.

Description : Baden Shoe Store has a beginning merchandise inventory of $30,000. During the period, purchases were $140,000; purchase returns, $4,000; and freight-in $10,000. A physical count of inventory at the end of the period revealed ... for sale was a. $164,000. b. $156,000. c. $176,000. d. $184,000.

Last Answer : c. Purchases Returns and Allo

Cost of goods available for sale is computed by adding a. beginning inventory to net purchases. b. beginning inventory to the cost of goods purchased. c. net purchases and freight-in. d. purchases to beginning inventory

Description : Cost of goods available for sale is computed by adding a. beginning inventory to net purchases. b. beginning inventory to the cost of goods purchased. c. net purchases and freight-in. d. purchases to beginning inventory

Last Answer : b. beginning inventory to the cost of goods purchased.

In a perpetual inventory system, a return of defective merchandise by a purchaser is recorded by crediting a. Purchases. b. Purchase Returns. c. Purchase Allowance. d. Merchandise Inventory.

Description : In a perpetual inventory system, a return of defective merchandise by a purchaser is recorded by crediting a. Purchases. b. Purchase Returns. c. Purchase Allowance. d. Merchandise Inventory.

Last Answer : d. Merchandise Inventory.

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to a. Merchandise Inventory. b. Purchase Discounts. c. Purchase Allowance.

Description : In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to a. Merchandise Inventory. b. Purchase Discounts. c. Purchase Allowance.

Last Answer : a. Merchandise Inventory.

A buyer would record a payment within the discount period under a perpetual inventory system by crediting a. Accounts Payable. b. Merchandise Inventory. c. Purchase Discounts. d. Sales Discounts.

Description : A buyer would record a payment within the discount period under a perpetual inventory system by crediting a. Accounts Payable. b. Merchandise Inventory. c. Purchase Discounts. d. Sales Discounts.

Last Answer : b. Merchandise Inventory.

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. c. Sales. d. Merchandise Inventory.

Description : The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. c. Sales. d. Merchandise Inventory.

Last Answer : d. Merchandise Inventory.

A perpetual inventory system would likely be used by a(n) a. automobile dealership. b. hardware store. c. drugstore. d. convenience store.

Description : A perpetual inventory system would likely be used by a(n) a. automobile dealership. b. hardware store. c. drugstore. d. convenience store.

Last Answer : a. automobile dealership.

Gross profit for a merchandiser is net sales minus a. operating expenses. b. cost of goods sold. c. sales discounts. d. cost of goods available for sale.

Description : Gross profit for a merchandiser is net sales minus a. operating expenses. b. cost of goods sold. c. sales discounts. d. cost of goods available for sale.

Last Answer : b. cost of goods sold.

Flynn Company purchased merchandise inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period? a. $5,000 b. $4,900 c. $4,500 d. $4,600

Description : Flynn Company purchased merchandise inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period? a. $5,000 b. $4,900 c. $4,500 d. $4,600

Last Answer : b. $4,900

In the Clark Company, sales were $480,000, sales returns and allowances were $30,000, and cost of goods sold was $288,000. The gross profit rate was a. 64%. b. 36%. c. 40%. d. 60%.

Description : In the Clark Company, sales were $480,000, sales returns and allowances were $30,000, and cost of goods sold was $288,000. The gross profit rate was a. 64%. b. 36%. c. 40%. d. 60%.

Last Answer : b. 36%.

Cole Company has sales revenue of $39,000, cost of goods sold of $24,000 and operating expenses of $9,000 for the year ended December 31. Cole's gross profit is a. $30,000. b. $15,000. c. $6,000.

Description : Cole Company has sales revenue of $39,000, cost of goods sold of $24,000 and operating expenses of $9,000 for the year ended December 31. Cole's gross profit is a. $30,000. b. $15,000. c. $6,000.

Last Answer : b. $15,000.

If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $260,000, the gross profit rate is a. 67%. b. 65% c. 35%. d. 33%.

Description : If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $260,000, the gross profit rate is a. 67%. b. 65% c. 35%. d. 33%.

Last Answer : c. 35%.

A company shows the following balances: Sales $1,000,000 Sales Returns and Allowances 180,000 Sales Discounts 20,000 Cost of Goods Sold 560,000 What is the gross profit percentage? a. 56% b. 70% c. 44% d. 30%

Description : A company shows the following balances: Sales $1,000,000 Sales Returns and Allowances 180,000 Sales Discounts 20,000 Cost of Goods Sold 560,000 What is the gross profit percentage? a. 56% b. 70% c. 44% d. 30%

Last Answer : d. 30%

If a company has net sales of $500,000 and cost of goods sold of $350,000, the gross profit percentage is a. 70%. b. 30%. c. 15%. d. 100%.

Description : If a company has net sales of $500,000 and cost of goods sold of $350,000, the gross profit percentage is a. 70%. b. 30%. c. 15%. d. 100%.

Last Answer : b. 30%

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company. a. Gross profit b. Operating expenses c. Sales revenues d. Cost of goods sold

Description : Indicate which one of the following would appear on the income statement of both a merchandising company and a service company. a. Gross profit b. Operating expenses c. Sales revenues d. Cost of goods sold

Last Answer : b. Operating expenses

A ltd is a manufacturing company that has no production resource limitations for the foreseeable future. The Managing Director has asked the company mangers to coordinate the preparation of their budgets for the next financial year. In what order should the following budgets be prepared? (1) Sales budget (2) Cash budget (3) Production budget (4) Purchase budget (5) Finished goods inventory budget (a) (2), (3), (4), (5), (1) (b) (1), (5), (3), (4), (2) (c) (1), (4), (5), (3), (2) (d) (4), (5), (3), (1), (2)

Description :  A ltd is a manufacturing company that has no production resource limitations for the foreseeable  future. The Managing Director has asked the company mangers to coordinate the preparation of their  budgets for the next financial year. In what order ... 5), (3), (2) (d) (4), (5), (3), (1), (2)

Last Answer : (b) (1), (5), (3), (4), (2)

A correcting entry a. must involve one balance sheet account and one income statement account. b. is another name for a closing entry. c. may involve any combination of accounts. d. is a required step in the accounting cycle.

Description : A correcting entry a. must involve one balance sheet account and one income statement account. b. is another name for a closing entry. c. may involve any combination of accounts. d. is a required step in the accounting cycle.

Last Answer : c. may involve any combination of accounts.

merchandising company using a perpetual system will make a. the same number of adjusting entries as a service company does. b. one more adjusting entry than a service company does. c. one less adjusting entry than a service company does. d. different types of adjusting entries compared to a service company.

Description : merchandising company using a perpetual system will make a. the same number of adjusting entries as a service company does. b. one more adjusting entry than a service company does. c. one ... than a service company does. d. different types of adjusting entries compared to a service company.

Last Answer : c. one less adjusting entry than a service company does.

Which of the following is an example of fraudulent financial reporting? a. The treasurer diverts customer payments to his personal due, concealing hisactions by debiting an expense account,thus overstating expenses. b. Company management changesinventory count tags and overstatesending inventory, while understatingcost of goods sold. c. An employee steals inventory and the“shrinkage” is recorded in cost of goodssold. d. An employee steals small tools from thecompany and neglects to return them;the cost is reported as a miscellaneousoperating expense

Description : Which of the following is an example of fraudulent financial reporting? a. The treasurer diverts customer payments to his personal due, concealing hisactions by debiting an expense account, thus ... the company and neglects to return them; the cost is reported as a miscellaneous operating expense

Last Answer : Company management changes inventory count tags and overstates ending inventory, while understating cost of goods sold

Ingrid’s Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company’s gross profit rate is 40%, Ingrid’s will report monthly net sales revenue and cost of goods sold of a. $38,000 and $22,800. b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

Description : Ingrid's Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company's gross profit rate is 40%, Ingrid's will report monthly net sales revenue and cost of goods ... b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

Last Answer : c. $37,200 and $22,320.

The gross profit rate is computed by dividing gross profit by a. cost of goods sold. b. net income. c. net sales. d. sales.

Description : The gross profit rate is computed by dividing gross profit by a. cost of goods sold. b. net income. c. net sales. d. sales.

Last Answer : c. net sales.

Which one of the following is shown on a multiple-step but not on a single-step income statement? a. Net sales b. Net income c. Gross profit d. Cost of goods sold

Description : Which one of the following is shown on a multiple-step but not on a single-step income statement? a. Net sales b. Net income c. Gross profit d. Cost of goods sold

Last Answer : c. Gross profit

Which of the following is not a true statement about a multiple-step income statement? a. Operating expenses are often classified as selling and administrative expenses. b. There may be a section for nonoperating activities. c. There may be a section for operating assets. d. There is a section for cost of goods sold.

Description : Which of the following is not a true statement about a multiple-step income statement? a. Operating expenses are often classified as selling and administrative expenses. b. There may be a section for nonoperating ... be a section for operating assets. d. There is a section for cost of goods sold.

Last Answer : c. There may be a section for operating assets.

. Income from operations will always result if a. the cost of goods sold exceeds operating expenses. b. revenues exceed cost of goods sold. c. revenues exceed operating expenses. d. gross profit exceeds operating expenses.

Description : . Income from operations will always result if a. the cost of goods sold exceeds operating expenses. b. revenues exceed cost of goods sold. c. revenues exceed operating expenses. d. gross profit exceeds operating expenses.

Last Answer : b. revenues exceed cost of goods sold.

The operating expense section of an income statement for a wholesaler would not include a. freight-out. b. utilities expense. c. cost of goods sold. d. insurance expense

Description : The operating expense section of an income statement for a wholesaler would not include a. freight-out. b. utilities expense. c. cost of goods sold. d. insurance expense

Last Answer : d. insurance expense

The sales revenue section of an income statement for a retailer would not include a. Sales discounts. b. Sales. c. Net sales. d. Cost of goods sold.

Description : The sales revenue section of an income statement for a retailer would not include a. Sales discounts. b. Sales. c. Net sales. d. Cost of goods sold.

Last Answer : c. Net sales.

Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Description : Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Last Answer : b. in operating expenses for the seller.