Question

1. Which of the following accounts are used when recording a purchase using a periodic inventory system?

a. cash, purchases

b. accounts payable, sales

c. accounts payable, accounts receivable

d. cash, merchandise inventory

2. A multi-step income statement ________.

a. separates cost of goods sold from operating expenses

b. considers interest revenue an operating activity

c. is another name for a simple income statement

d. combines cost of goods sold and operating expenses

3. A customer returns $870 worth of merchandise and receives a full refund. What accounts recognize this sales return (disregarding the merchandise condition entry) if the return occurs before the customer remits payment to the retailer?

a. accounts receivable, sales returns and allowances

b. accounts receivable, cash

c. sales returns and allowances, merchandise inventory

d. accounts receivable, cost of goods sold

4. Which two accounts are used to recognize shipping charges for a buyer, assuming the buyer purchases with cash and the terms are FOB Shipping Point?

a. merchandise inventory, cash

b. delivery expense, cash

c. merchandise inventory, accounts payable

d. The buyer does not record anything for shipping since it is FOB Shipping Point.

5. Which of the following accounts are used when recording the sales entry of a sale on credit?

a. accounts receivable, sales

b. merchandise inventory, cash

c. accounts receivable, merchandise inventory

d. sales, cost of goods sold

Answer 1

1.

Cash and purchases are used when recording a purchase using a periodic inventory system

Correct option is (a)

2.

A multi-step income statement separates cost of goods sold from operating expenses

Correct option is (a)

3.

A customer returns $870 worth of merchandise and receives a full refund. Accounts receivable, sales returns and allowances recognize this sales return (disregarding the merchandise condition entry) if the return occurs before the customer remits payment to the retailer

Correct option is (a)

4.

Merchandise inventory and cash accounts are used to recognize shipping charges for a buyer, assuming the buyer purchases with cash and the terms are FOB Shipping Point

Correct option is (a)

5.

Accounts receivable and sales accounts are used when recording the sales entry of a sale on credit.

Correct option is (a)

Please ask if you have any query related to the question. Thank you