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ACCT 101 MIDTERM EXAM 2025/2024 VERIFIED QUESTIONS AND ANSWERS GRADED A+(SOLVED)
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ACCT 101 MIDTERM EXAM 2025/2024 VERIFIED QUESTIONS AND ANSWERS GRADED A+(SOLVED)
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ACCT 101 INTRODUCTION TO FINANCIAL ACCOUNTING 20204/2025ACCT 101 MIDTERM EXAM 2025/2024 VERIFIED
QUESTIONS AND ANSWERS GRADED
A+(SOLVED)
Two categories of expenses for merchandising companies are
a. sales and cost of goods sold.
b. cost of goods sold and financing expenses.
c. operating expenses and financing expenses.
d. cost of goods sold and operating expenses.
D. Costs of goods sold and operating expenses
Sales revenue less cost of goods sold is called
a. marginal income.
b. net income.
c. net profit.
d. gross profit.
D. Gross Profit
Cost of goods sold is determined only at the end of the accounting period in
a. a perpetual inventory system.
,ACCT 101 INTRODUCTION TO FINANCIAL ACCOUNTING 20204/2025
b. a periodic inventory system.
c. both a perpetual and a periodic inventory system.
d. neither a perpetual nor a periodic inventory system.
B. A periodic inventory system
In a perpetual inventory system, cost of goods sold is recorded
a. on a monthly basis.
b. with each sale.
c. on a daily basis.
d. on an annual basis.
b. with each sale
Waterway Company has sales revenue of $61500, cost of goods sold of $36400 and operating
expenses of $14700 for the year ended December 31. Waterway's gross profit is
a. $0
b. $25,100
c. $46,800
d. $10,400
b. $25,100
,ACCT 101 INTRODUCTION TO FINANCIAL ACCOUNTING 20204/2025
A company determines the cost of goods sold each time a sale occurs in
a. a periodic inventory system only.
b. a perpetual inventory system only.
c. both a periodic and perpetual inventory system.
d. neither a periodic nor perpetual inventory system.
b. a perpetual inventory system only.
In order to faithfully and accurately report revenue and income, a retailer should
a. reduce revenues by estimated sales returns and reduce cash as the offsetting entry.
b. estimate sales returns based on past experience and adjust annual revenues.
c. only record actual sales returns during an accounting period.
d. decrease revenues and increase cost of goods sold.
b. estimate sales returns based on past experience and adjust annual revenues.
The journal entry to record a return of merchandise purchased on account under a perpetual
inventory system would credit
a. Purchase Returns and Allowances.
b. Sales Revenue.
c. Inventory.
d. Accounts Payable.
c. inventory
, ACCT 101 INTRODUCTION TO FINANCIAL ACCOUNTING 20204/2025
If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the
a. carrier will bear the freight cost.
b. Inventory account will not be affected.
c. Inventory account will be increased.
d. seller will bear the freight cost.
c. Inventory account will be increased.
Coronado Company purchased merchandise inventory with an invoice price of $9400 and credit
terms of 5/10, n/30. What is the net cost of the goods if Coronado Company pays within the
discount period?
a, $7520
b. $9400
c. $8930
d. $8460
c. $8930
The collection of a $2000 account after the 2 percent discount period will result in a
a. credit to Cash for $2000.
b. credit to Accounts Receivable for $2000.
c. debit to Sales Discounts for $40.
d. debit to Cash for $1960.
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