Mighty Ducks, Inc.'s inventory activity in October 2011 was as follows:
Inventory, October 1 11 units 8 each
Purchase, October 12 22 units 11 each
Sale, October 25 23 units 24 each
Which of the following shows the correct effect on the accounting equation of the October 25 sale on account using the perpetual FIFO method of accounting for inventory?
A) Assets Liabilities Shareholders' equity
(220) Inventory 552 Accounts payable 552 Sales
(220) Cost of goods sold
B) Assets Liabilities Shareholders' equity
552 Accounts receivable
(250) Inventory No effect 552 Sales
(250) Cost of goods sold
C) Assets Liabilities Shareholders' equity
552 Accounts receivable
(220) Inventory No effect 552 Sales
(220) Cost of goods sold
D) Assets Liabilities Shareholders' equity
(230) Inventory 552 Accounts payable 552 Sales
(230) Cost of goods sold
(
Q. 2) Which of the following would be subtracted from the balance per bank on a bank reconciliation?
a. outstanding checks
b. deposits in transit
c. notes collected by the bank
d. service charges
(
Q. 3) On June 1, beginning inventory consists of ten items that cost 100 each. On June 8, ten more items are purchased at 120 each. On June 12, fifteen items are sold for 200 each. On June 28, ten items are purchased at 130 each.
Using perpetual FIFO, cost of goods sold for the month ended June 30 equals ________.
A) 1,500
B) 1,600
C) 1,800
D) 3,000
(
Q. 4) A(n) ____________________ purchases merchandise and sells that merchandise to its customers.
Fill in the blank(s) with correct word
(
Q. 5) Acme, Inc. accepted a promissory note from NadirCo, who promised to pay Acme 5,000 plus 6 interest at the end of four months. What is the amount of interest that will be paid at the end of the four-month period?
A) 300
B) 100
C) 600
D) 5,000
(
Q. 6) Which of the following would be subtracted from the balance per books on a bank reconciliation?
a. outstanding checks
b. deposits in transit
c. notes collected by the bank
d. error in recording a check for 732 as 723
Quick Reply
