Question

An error must have been made if which of the following accounts appears on the post-closing trial balance with a balance other than zero?

1. Equipment

2. Common Stock

3. Accumulated Depreciation

4. Depreciation Expense

When using a perpetual inventory system, the Cost of Goods Sold is recorded:

A. each time a sale is made.

B. at the end of each month.

C. at the end of the accounting period.

D. at the end of each day.

On October 1, Robertson Company sold inventory in the amount of $5,800 to Alberta, Inc. with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses a periodic inventory system. Alberta pays the invoice on October 8 and takes the appropriate discount. What journal entry will be recorded by Robertson on October 8 if they use the gross method?

A. Debit Cash and credit Accounts Receivable for $5,800.

B. Debit Cash and credit Accounts Receivable for $4,000.

C. C) Debit Cash for $3,920, debit Sales Revenue for $80, and credit Accounts Receivable for $4,000.

D. D) Debit Cash for $5,684, debit Sales Revenue for $116, and credit Accounts Receivable for $5,800.

FIFO uses the ________ cost for cost of goods sold on the income statement and the ________ cost for inventory on the balance sheet.

1.              Newest; newest

2.              Newest; oldest

3.              Oldest; oldest

4.              Oldest; newest

Answer 1

1

An error must have been made if Depreciation Expense appears on the post-closing trial balance with a balance other than zero.

Depreciation Expense is correct option

2

When using a perpetual inventory system, the Cost of Goods Sold is recorded each time a sale is made.

Option A is correct

3

Sales discount = 5800*2% = $116

Debit Cash for $5,684, debit Sales Revenue for $116, and credit Accounts Receivable for $5,800.

Option D is correct

4

FIFO uses the Oldest cost for cost of goods sold on the income statement and the newest cost for inventory on the balance sheet.

Option D is correct