Ch. 7 Quiz

The difference between COGS and Loss on Inv. is:

A) COGS is incidental to the on-going operations whereas loss is incurred in connection with normal operating activities
B) COGS is incurred in an attempt to generate rev whereas loss is not
C) COGS sold requires a cash payment at the time of sale whereas loss does not require a cash payment
D) none of the above, cost of goods sold and loss on inventory are the same

An expense can be recognized:

A) after cash is paid
B) before cash is paid
C) concurrent with cash paid
D) all of the above

A company purch. $100 of inv for resale. Using the perpetual inv system, the company would debit:

A) inv. exp
B) purchases
C) merch inv
D) purchases exp

An exp. cannot be recognized unless

A) cash is paid
B) incurred
C) liabilities are incurred
D) all of the above

A company purch. $100 of inv for resale. Using the periodic inv. system, the company would debit:

A) purchases exp
B) merch inv
C) purchases
D) inv exp

Which of the following is not a special journal?

A) cash disbursements
B) sales
C) purchases
D) acct. rec.

Assume a company that is using a periodic inv system, returns inv to a supplier bec the wrong items were sent. Which of the following accts would be used to record this event?

A) inv
B) purchases discount
C) purchases returns and allowances
D) purchases

Assume a company that is using the net price for its inv purchases after the discount period has expired. Which of the following accts would be used?

A) Loss on inv.
B) Purchases dis.
C) Dis. lost
D) Purchases returns and allowances

Which of the following is not an employer tax?

A) FICA
B) FUTA
C) SUTA
D) all of the above

Which of the following decreases inv?

A) cash paid to suppliers
B) purchases of inv on acct.
C) purchases of inv for cash
D) COGS

An employee has earned $500. After withholdings, the employee receives a check for $400. The liability for the company is:

A) $900
B) $500
C) $100
D) $400

An employee has earned $600. After withholdings, the employee receives a check for $500. Wage exp. for the company is:

A) $500
B) $100
C) $400
D) $900

A company purchases $100 of inv. with terms 3/10, n/30. Using the net price method for inv purchases, the inv would be recorded at:

A) $103
B) $100
C) $3
D) $97

A company purchases $200 of inv with terms 1/10, n/30. Using the gross price method, the inv would be recorded at:

A) $202
B) $2
C) $200
D) $198

A company purchases $100 of inv with terms 3/10, n/30. If the company uses the gross price method for inv purchases, and pays for the inv within the discount period, the cash account would be decreased (credited) for:

A) $3
B) $97
C) $103
D) $100

A company purchases $100 of inv with terms 3/10, n/30. If the company uses the net price method and pays for the inv after the discount period has expired, the cash acct. would be credited for:

A) $97
B) $100
C) $103
D) $3

A company has the following payroll items:

Salary and wages exp: $50,000
FICA taxes: 3,825
Federal income taxes: 7,500
Federal unemployment taxes: 400
State unemployment taxes: 1,600

What is the net pay due to employees?

A) $36,675
B) $38,675
C) $34,850
D) $32,850

A company has the following payroll items:

Salary and wages exp: $50,000
FICA taxes: 3,825
Federal income taxes: 7,500
Federal unemployment taxes: 400
State unemployment taxes: 1,600

What is the amount of the Payroll Tax Exp for the period?

A) $2,000
B) $5,825
C) $3,825
D) $9,650

A company has a beginning balance in inv of $25,000 and an ending balance of $18,000. During the year, its COGS was $537,000. What was the amount of inv purchases?

A) $530,000
B) $585,000
C) $544,000
D) $494,000

A company has an ending balance in its accounts payable account that was $10,000 lower than its beginning balance. Purchases of inv. on acct. during the period were $625,000. What was the amount of cash paid to suppliers during the period?

A) $625,000
B) $615,000
C) $635,000
D) Cannot be determined without knowing the beginning and ending balances