The following information is provided for PO Company:
Purchased 100 units of merchandise for 20 each
Paid 50 of freight costs for the merchandise received
Paid 1,200 for an advertising campaign related to the merchandise
Returned 10 of the
units purchased because they were broken
Paid the purchasing manager's monthly salary of 3,000
Determine the cost of PO's inventory at the end of the period.
A) 1,850
B) 3,050
C) 1,800
D) 4,800
(
Q. 2) When the three sections of a balance sheet are presented on a page in a downward sequence, it is called the
a. account form
b. comparative form
c. horizontal form
d. report form
(
Q. 3) The Mane Event, Inc. began by selling 200,000 of common stock to its owners in exchange for cash. The effect of this transaction on the accounting equation is:
A) Total shareholders' equity
Total assets Total liabilities Contributed capital Retained earnings
Increase No effect Increase No effect
B) Total shareholders' equity
Total assets Total liabilities Contributed capital Retained earning
Decrease No effect No effect Decrease
C) Total shareholders' equity
Total assets Total liabilities Contributed capital Retained earning
No effect Decrease No effect Increase
D) Total shareholders' equity
Total assets Total liabilities Contributed capital Retained earnings
Increase No effect Increase No effect
(
Q. 4) The person presenting the check for payment is called the ____________________.
Fill in the blank(s) with correct word
(
Q. 5) The employees of Dew Drop Inn get paid every Friday for a 5-day workweek (Monday through Friday). The total payroll is 5,000 per day of work.
If the accounting period ends on Thursday of a given week, and the proper adjustment is made on Thursday, what will be the effect on the company's accounting system on Friday when the employees are paid for the week?
A) Decrease Cash by 25,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
B) Decrease Cash by 25,000, decrease shareholders' equity by recognizing Salaries expense for 20,000 and decrease Salaries payable by 5,000.
C) Decrease Cash by 25,000, decrease shareholders' equity by recognizing Salaries expense for 5,000 and decrease Salaries payable by 20,000.
D) Decrease Cash by 5,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
(
Q. 6) Merchandise with an invoice price of 6,000 is purchased on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled 200 . What is the cost of the merchandise if paid on September 12, assuming the discount is taken?
a. 6,120
b. 5,940
c. 6,090
d. 5,880
Quick Reply
