Accounting Exam 2 Actual Exam Questions /
Expert Strategies, Review of Key Quizzes, And
Practice Questions for Guaranteed Success
An item of merchandise that was sold for $600 cash by a business using the
perpetual inventory system. The item cost $400. After the sale entry has been
recorded, what additional entry would be required?
A) a debit to sales and credit to inventory for $600
B) a debit to inventory and a credit to cost of goods sold for $400
C) A debit to cost of goods sold and a credit to purchases for $400
D) A debit to cost of goods sold and a credit to inventory for $400 - answer-D)
A debit to Cost of Goods Sold and a credit to Inventory for $400
What is NOT affected by the choice of an inventory costing method (that is,
between FIFO, LIFO, and weighted average)?
A) cost of goods sold
B) net sales
C) gross profit
D) net income - answer-B) Net Sales
, In which case would Johnson Company report "Sales Discounts?"
A) Johnson puts its merchandise on sale.
B) Johnson's goods are reduced in price due to damage
C) Johnson buys merchandise and pays promptly
D) Johnson's customers buy merchandise and pays promptly - answer-D)
Johnson's customers buy merchandise and pays promptly
Which of the following is/are true about the account "Allowance for Bad
Debts?"
A) it is a contra-asset account
B) it appears on both the balance sheet and the income statement
C) it is added to accounts receivable to report a more conservative amount
D) all the above - answer-a) it is a contra-asset account
Which of the following supports the use of an allowance account for
accounting for bad debts?
a. Matching principle.
b. Conservatism.
c. Both of the above.
d. Neither of the above. - answer-C. Both of the Above
Expert Strategies, Review of Key Quizzes, And
Practice Questions for Guaranteed Success
An item of merchandise that was sold for $600 cash by a business using the
perpetual inventory system. The item cost $400. After the sale entry has been
recorded, what additional entry would be required?
A) a debit to sales and credit to inventory for $600
B) a debit to inventory and a credit to cost of goods sold for $400
C) A debit to cost of goods sold and a credit to purchases for $400
D) A debit to cost of goods sold and a credit to inventory for $400 - answer-D)
A debit to Cost of Goods Sold and a credit to Inventory for $400
What is NOT affected by the choice of an inventory costing method (that is,
between FIFO, LIFO, and weighted average)?
A) cost of goods sold
B) net sales
C) gross profit
D) net income - answer-B) Net Sales
, In which case would Johnson Company report "Sales Discounts?"
A) Johnson puts its merchandise on sale.
B) Johnson's goods are reduced in price due to damage
C) Johnson buys merchandise and pays promptly
D) Johnson's customers buy merchandise and pays promptly - answer-D)
Johnson's customers buy merchandise and pays promptly
Which of the following is/are true about the account "Allowance for Bad
Debts?"
A) it is a contra-asset account
B) it appears on both the balance sheet and the income statement
C) it is added to accounts receivable to report a more conservative amount
D) all the above - answer-a) it is a contra-asset account
Which of the following supports the use of an allowance account for
accounting for bad debts?
a. Matching principle.
b. Conservatism.
c. Both of the above.
d. Neither of the above. - answer-C. Both of the Above
