ACC 231 ASU Exam 2 Question and
answers already passed 2025/2026
Which of the following indicates the shipment is free on board and the buyer pays all of
the shipping and freight costs?
-Cash on deliver
-FOB destination
-2/10, n/30
-FOB shipping point - Answer--FOB shipping point
On December 1, Macy Company sold merchandise with a selling price of $9000 on
account to Mrs. Jorgenson, with terms 4/10, n/30. On December 3, Mrs. Jorgenson
returned merchandise with a selling price of $700. Mrs. Jorgenson paid the amount due
on December 9. What journal entry did Macy Company prepare on December 9
assuming the gross method is used? - Answer--Debit Cash for $7968, debit Sales
Discounts for $332, and credit Accounts Receivable for $8300
[$9000 - $700 (returned amount)]
[$8300 * 0.96 (4/10)]
[$7968]
The following account balances were extracted from the accounting records of Thomas
Corporation at the end of the year:
Accounts Receivable: $1,105,000
,Allowance for Uncollectible Accounts (Credit): $37,000
Uncollectible-Account Expense: $60,000
What is the net realizable value of the accounts receivable? - Answer--$1,068,000
[Accounts Receivable - Allowance for Uncollectible Accounts]
If the interest rate on a note is 12.5% and the principal was $57,000, what is the
maturity value of the note, if the term of the note is 5 months? - Answer--$59,969
[5 months = 5/12]
[5/12 * 12.5 = 5.208%]
[$57,000 * 5.208%]
[59,969]
If both current ratio and quick ratio have improved, has a company's liquidity improved?
- Answer--Yes
A company has $28,000 in cash and cash equivalents, $88,000 in short-term
investments, $122,000 in net current receivables, $64,000 in inventory, $14,000 of
prepaid insurance and $11,000 of supplies. The total current liabilities of the firm are
$304,000. The quick ratio of the company is: - Answer--0.78
[28,000 + 88,000 + 122,000 = 238,000]
[238,000/304,000]
[0.78]
A company has sales revenue of $131,000, cost of goods sold of $63,000, operating
expenses of $34,000, and other expenses of $2,000. The company's gross profit is: -
Answer--$68,000
[131,000 - 63,000]
Gross Profit and Gross Profit Margin Formula - Answer--Gross Profit = Revenue -
COGS
Gross Profit Margin = (Revenue - COGS)/Revenue
Quick Ratio Formula - Answer--Quick Assets/Current Liabilities
, A company has sales revenue of $133,000, cost of goods sold of $63,000, operating
expenses of $37,000, and other expenses of $4,000. The company's operating income
is: - Answer--$33,000
[133,000 - 63,000 - 37,000}
Operating Income Formula - Answer--Gross Profit (Sales Revenue - COGS) - Operating
Expenses
Syrio's Snowboards uses the perpetual inventory system. At year end the general
ledger indicated that the company had a balance of $24,000 in the Inventory account.
Actual inventory on hand per a physical count was $19,000. What action does the
company now need to take?
-Debit Purchases and credit Cost of Goods Sold, $5,000
-No action is required because the amount is not material
-Debit Inventory and credit Cost of Goods Sold, $5,000
-Debit Cost of Goods Sold and credit Inventory, $5,000 - Answer--Debit Cost of Goods
Sold and credit Inventory, $5,000
Salieri Company purchased 80 keyboards on account for $15 each from Amadeus, Inc.
When they unpacked the keyboards, Salieri found that 30 of the keyboards were
damaged in shipping. What is the journal entry that Salieri will make to record the
purchase return?
-Debit Purchase Returns and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $450
-Debit Purchase Returns and credit Inventory, $450 - Answer--Debit Accounts Payable -
Amadeus and credit Inventory $450
Carlton Company purchases $8,000 of inventory with shipping terms, FOB Portland.
Carlton is based in Seattle and the supplier is based in Portland. The shipping costs are
$450. What is the cost of Carlton's Inventory? - Answer--$8,450
____________ produces the lowest cost of goods sold and the highest gross profit
when prices are decreasing
-Average Cost
-Specific Identification
answers already passed 2025/2026
Which of the following indicates the shipment is free on board and the buyer pays all of
the shipping and freight costs?
-Cash on deliver
-FOB destination
-2/10, n/30
-FOB shipping point - Answer--FOB shipping point
On December 1, Macy Company sold merchandise with a selling price of $9000 on
account to Mrs. Jorgenson, with terms 4/10, n/30. On December 3, Mrs. Jorgenson
returned merchandise with a selling price of $700. Mrs. Jorgenson paid the amount due
on December 9. What journal entry did Macy Company prepare on December 9
assuming the gross method is used? - Answer--Debit Cash for $7968, debit Sales
Discounts for $332, and credit Accounts Receivable for $8300
[$9000 - $700 (returned amount)]
[$8300 * 0.96 (4/10)]
[$7968]
The following account balances were extracted from the accounting records of Thomas
Corporation at the end of the year:
Accounts Receivable: $1,105,000
,Allowance for Uncollectible Accounts (Credit): $37,000
Uncollectible-Account Expense: $60,000
What is the net realizable value of the accounts receivable? - Answer--$1,068,000
[Accounts Receivable - Allowance for Uncollectible Accounts]
If the interest rate on a note is 12.5% and the principal was $57,000, what is the
maturity value of the note, if the term of the note is 5 months? - Answer--$59,969
[5 months = 5/12]
[5/12 * 12.5 = 5.208%]
[$57,000 * 5.208%]
[59,969]
If both current ratio and quick ratio have improved, has a company's liquidity improved?
- Answer--Yes
A company has $28,000 in cash and cash equivalents, $88,000 in short-term
investments, $122,000 in net current receivables, $64,000 in inventory, $14,000 of
prepaid insurance and $11,000 of supplies. The total current liabilities of the firm are
$304,000. The quick ratio of the company is: - Answer--0.78
[28,000 + 88,000 + 122,000 = 238,000]
[238,000/304,000]
[0.78]
A company has sales revenue of $131,000, cost of goods sold of $63,000, operating
expenses of $34,000, and other expenses of $2,000. The company's gross profit is: -
Answer--$68,000
[131,000 - 63,000]
Gross Profit and Gross Profit Margin Formula - Answer--Gross Profit = Revenue -
COGS
Gross Profit Margin = (Revenue - COGS)/Revenue
Quick Ratio Formula - Answer--Quick Assets/Current Liabilities
, A company has sales revenue of $133,000, cost of goods sold of $63,000, operating
expenses of $37,000, and other expenses of $4,000. The company's operating income
is: - Answer--$33,000
[133,000 - 63,000 - 37,000}
Operating Income Formula - Answer--Gross Profit (Sales Revenue - COGS) - Operating
Expenses
Syrio's Snowboards uses the perpetual inventory system. At year end the general
ledger indicated that the company had a balance of $24,000 in the Inventory account.
Actual inventory on hand per a physical count was $19,000. What action does the
company now need to take?
-Debit Purchases and credit Cost of Goods Sold, $5,000
-No action is required because the amount is not material
-Debit Inventory and credit Cost of Goods Sold, $5,000
-Debit Cost of Goods Sold and credit Inventory, $5,000 - Answer--Debit Cost of Goods
Sold and credit Inventory, $5,000
Salieri Company purchased 80 keyboards on account for $15 each from Amadeus, Inc.
When they unpacked the keyboards, Salieri found that 30 of the keyboards were
damaged in shipping. What is the journal entry that Salieri will make to record the
purchase return?
-Debit Purchase Returns and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $450
-Debit Purchase Returns and credit Inventory, $450 - Answer--Debit Accounts Payable -
Amadeus and credit Inventory $450
Carlton Company purchases $8,000 of inventory with shipping terms, FOB Portland.
Carlton is based in Seattle and the supplier is based in Portland. The shipping costs are
$450. What is the cost of Carlton's Inventory? - Answer--$8,450
____________ produces the lowest cost of goods sold and the highest gross profit
when prices are decreasing
-Average Cost
-Specific Identification
