1. Under the perpetual system (A) the account purchase returns and allowances is

Question

1. Under the perpetual system
(A) the account purchase returns and allowances is credited when goods are returned to vendors.
(B) increases in inventory resulting from purchasing are debited to purchases.
(C) there is no need for a year-end physical count.
(D) accounting records continuously disclose the amount of inventory

2. Finically information is presented below:
Operating expenses. $63000
Sales returns and allowances 2000
Sales discounts. 5000
Sales revenue 156000
Cost of goods sold 104000

The amount of net sales on the income statement would be

3. Sunland Company sells $2100 of merchandise on account to Monty Company with credit terms of 2/7, n/30. If Monty Company remits a check taking advantage of the discount offered, what is the amount of Monty Company's check?

4. A company purchased inventory as follows:
- 188 units at $5.60
- 282 units at $6.20
The average unit cost for inventory is

5. An aging of a company's accounts recivable imdicates that $10100 are estimated to be uncollectable. If Allowance for Doubtful Accounts has a $4950 debit balance, the adjustment to record bad debts for the period will require a
(A) debit to Bad Debt Expense for $10100
(B) debit to Bad Debt Expense for $15050
(C) debit to Allowance for Doubtful Accounts for $15050
(D) credit to Allowance for Doubtful Accounts for $10100

6. The interest on a $24500, 10%, 1-year note receivable is

7. The interest on a $25000, 8%, 1 90-day note receivable is

Explanation / Answer

ans 1 d) accounting records continuously disclose the amount of inventory Under perpetual inventory system each time when inventory are purchased and sold the records are continuosly updated. ans 2 Sales revenue 156000 less: Sales returns and allowances    2000 Sales discounts. 5000 Net sales 149000 ans 3 Amt= 2100*98% 2058 ans 4 Average cost=((188*5.6)+(282*6.2))/(188+282) 5.960 ans 5 Bad debt expense= 10100+4950 15050 (B) debit to Bad Debt Expense for $15050 ans 6 Interest=24500*10% 2450 ans 7 Interest= 25000*8%*90/360 500 If satisfied you can rate the answer

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