8) the buyer is responsible for the shipping costs when the shipping terms are:
a. FOB destination
b. ABD destination
c. FOB shipping point
d. ABD shipping point
9) our firm owns inventory on which is on consignment in a number of bait shops across northern Wisconsin. we are referred to as the:
a. Consignee
b. consignor
c. debtor in possession
e. none of the above
10) a truck crashes destroying a $20,000 shipment of foundry supplies. the shipment was made FOB destination. who owns the shipment and will be liable for the loss?
a. the seller
b. the buyer
c. the trucking company
d. by law, loss is split 1/3 each among buyer, seller and trucking company
11) when using special journals, a sale made on account is recorded in the:
a. cash receipts journal
b. cash disbursements journal
c. purchases journal
d. sales journal
e. none of the above.
12) beginning inventory equals $0, purchases equal $100,000, sales = $80,000, gross margin percent equals 50%. what ending inventory?
a.$60,000
b.$40,000
c.$50,000
d.$90,000
e. none of the above
13) a key use of using a normal banking procedure as an element of internal control include:
a. an up-to-date signature card on file at the bank
b. having lunch with loan officer assigned to your account
c. switching accounts to be sure to get the latest new customer gift promotion item.
d. allowing bank statements to accumulate unopened in the top file cabinet drawer
e. none of the above
14)in a periodic inventory system system, the entry to record the sale of merchandise on account would include a:
a. credit to cash
b. debit to account receivable
c. debit to inventory
d. debit to purchase
e. credit to inventory
15) all of the following are purposes if internal control except to:
a. safeguard assets
b. eliminate rotation of duties among staff members
c. encourage adherence to company policies
d. ensure accurate and reliable accounting records
16) if the cost of goods sold is $50,000, and goods available for sale are $75,000, what wa sending inventory?
a. $125,00
b.$50,000
c. $20,000
d. $25,000
e. none of the above
17) according to the instructor, merchandising business can fail despite being profitable because:
a. they have too much cash.
b. they lack enough money cash to survive the cash-flow cycle inherent in selling goods
c. they fail to employ Irish-Americans, a persecuted minatory
d. ridiculous question. who ever heard of a business selling stuff!
e. none of the above.
18) terms of “4-15, N-30” means:
a. no discounts allowed
b. if before April 15, pay in 30 days. otherwise, pay net amount now.
c. take a 4% discount if paid in 15 days, otherwise take a 2% discount
d. take a 4% discount if paid in 15 days, otherwise pay net amount in 30 days
e. none of the above
19) according to your instructor, Gross Margin % measure:
a. the profitability of sales
b. the costs of the last items purchased
c. the costs of the first items purchased
d. the efficiency of using the asset inventory
e. none of above.
20) which of the following is nit an element of internal control?
a. allowing one employee to open the mail, prepare the deposits, record the accounts payable payments, and carry deposits to the bank
b. relying on the internal and external audits
c. separation of duties whenever possible
d. assigning responsibilities to individual who have the training to administer them.
e. none of the above
. 2-1) Louie’s frozen frog legs company has asked you to assist Carl the Gilla Monster, bookkeeper, in the preparation of a bank reconciliation for July. answer the questions 21-28 below, indicate how the items described would be reported on the bank reconciliation
21) Carl determines that $6,822 of outstanding checks exist as of July 31.
a. add to the bank statement balance
b. deduct from the bank statement balance
c. add to the book balance
d. deduct from the book balance
e. does not belong on the bank reconciliation
22) the bank statement shows a $100 check from Louie’s customer that Louie had deposited to the bank had been returned marked “NFS”
a. add to the bank statement balance
b. deduct from the bank statement balance
c. add to the book balance
d. deduct from the book balance
e. does not belong on the bank reconciliation
23) a $500 deposit was made at the bank on the last day of the current month, but did not appear on the July bank statement. (Carl has a deposit receipt showing the deposit dated.)
a. add to the bank statement balance
b. deduct from the bank statement balance
c. add to the book balance
d. deduct from the book balance
e. does not belong on the bank reconciliation
24) the statement shows a note receivable was collected by the bank on Louie’s behalf from a customer in the amount of $8,800, of which $1,800 was interest
a. add to the bank statement balance
b. deduct from the bank statement balance
c. add to the book balance
d. deduct from the