Homework #2 Chapter 5
Your company uses the Perpetual Inventory Method! Using T accounts will make this quiz a little easier!
On 1/1/09, the beginning balance in the Inventory account was $3,000
(1,000 units with a cost of $3 each).
On 1/3/09, your company sold 800 units to AAA Corp. for $6 each; terms were
2/10, n/30.
On 1/6/09, AAA Corp. returned 100 units that they purchased on 1/3.
On 1/12/09, AAA Corp. paid their account, in full.
On 1/20/09, your company purchased an additional 2,000 units from XYZ Distributors
for $3 each.
On 1/25/09, your company returned 500 units that were purchased on 1/20 to XYZ
Distributors.
On 1/29/09, you paid XYZ Distributors, in full.
1. What is the ending balance in the Inventory account?
A. $ 9,300
B. $ 5,400
C. $ 3,900
D. $ 5,100
2. What is the Net Sales amount?
A. $ 4,200
B. $ 4,116
C. $ 4,416
D. $ 4,800
3. What is the Gross Margin amount?
A. $ 2,100
B. $ 2,216
C. $ 2,016
D. $ 2,700
4. Sales Discounts and Sales Returns are what types of accounts?
A. Revenues
B. Expenses
C. Contra revenue
D. Contra asset
5. Sales Discounts and Sales Returns are listed on which financial statement?
A. Balance Sheet
B. Income Statement
C. Statement of Changes in S/E
D. They are not listed on any financial statement.
6. When is the Inventory account debited?
A. Purchases and Purchase Returns
B. Purchases, Sales Returns, and Sales Discounts
C. Purchases, Sales Returns, and Purchase Returns
D. Purchases and Sales Returns
7. When is the Inventory account credited?
A. Purchases and Purchase Returns
B. Purchases, Purchase Returns, and Sales Discounts
C. Purchase Returns and Cost of Goods Sold
D. Purchases and Sales Returns