1. Physical inventory counts must be done: A) when using the periodic method of inventory.
B) when using bar code scan technology.
C) when using the perpetual method of inventory.
D) regardless of method inventory.
2. The Cost of Goods Sold account appears on the:
A) balance sheet.
B) statement of retained earnings.
C) income statement.
D) post-closing trial balance.
3. Under the periodic inventory method, the amount of inventory is:
A) constantly updated.
B) only known when a physical count is taken.
C) adjusted after each sale.
D) adjusted after each purchase.
4. Alpha Company received an invoice from Beta Company for $5,550 with terms of 3/10, n/45 on March 8. If Alpha pays the bill on March 15, they will credit inventory under a perpetual inventory system for:
A) $ 0.
B) $ 555.00
C) $ 166.50
5.0The inventory system that uses the merchandise inventory account as an asset account is called the:
A) periodic system.
B) perpetual system.
C) merchandising system.
D) retailing system.
6. Under a perpetual inventory system, when goods are returned to the retailer from a customer:
A) Cost of Goods Sold is debited; Sales Returns and Allowances is credited.
B) Sales Returns and Allowances is debited; Cost of Goods Sold is credited.
C) Sales is debited; Cost Goods Sold is credited.
D) Inventory is debited; Sales is credited.
7. Net sales is computed by taking:
A) Gross sales â€“ Sales returns and allowances + Sales discounts.
B) Gross sales â€“ Sales returns and allowances â€“ Sales discounts.
C) Gross sales + Sales returns and allowances + Sales discounts.
D) Gross sales â€“ Cash received for sales.
8. Freight charges that are paid by a buyer are:
A) added to cost of goods sold.
B) added to inventory.
C) subtracted from inventory.
D) subtracted from cost of goods sold.
9. Depreciation is an example of a(n):
A) inventory expense.
B) administrative expense.
C) selling expense.
D) delivery expense.
10. Current assets are listed on the balance sheet in:
A) alphabetical order.
B) order of liquidity.
C) ascending order of value.
D) descending order of value