Sales returns and allowances should be recorded by:

debiting Sales Returns and Allowances   Correct or    debiting SalesIncorrect

 

Which of the following types of discounts would be recorded in a Sales Discounts account?

trade discounts   Incorrect or    cash discountsCorrect

 

Sales returns and allowances and sales discounts are known as:

contra-revenue accounts   Correct or    expense accountsIncorrect

 

Under which of the following terms would the purchaser be responsible for freight charges?

F.O.B. destination   Incorrect or    F.O.B. shipping pointCorrect

 

Who would initially pay the freight charges under the following terms: F.O.B. shipping point, freight pre-paid?

buyer   Incorrect or    sellerCorrect

 

The Purchases Discounts Lost account would be utilized under the:

gross method    Incorrect or    net methodCorrect

 

If the gross method is utilized to record purchases and available cash discounts are taken, how many accounts would be affected by the appropriate journal entry to record payment of the invoice?

two   Incorrect or    threeCorrect

 

Beginning inventory plus net purchases equals:

goods available for sale   Correct or    cost of goods soldIncorrect

 

Net purchases equals gross purchases plus freight-in minus purchase discounts and purchase returns and allowances.

true    Correct or    falseIncorrect

 

The total cost of goods available for sale should be allocated to:

cost of goods sold and ending inventory   Correct or    gross profitIncorrect

 

Modern computers have greatly increased the ability of firms to apply the:

periodic inventory system   Incorrect or    perpetual inventory systemCorrect

 

Is a physical inventory count recommended no matter which inventory system is used?

yes    Correct or   noIncorrect

 

Which of the following income statement formats is justified on the grounds of simplicity and ease of understanding?

single-step approach   Correct or   multiple-step approachIncorrect

 

Gross profit and income from operations are important subtotals on a multiple-step income statement.

correct    Correct or    incorrectIncorrect

 

The separation of duties, accountability procedures, and sound personnel practices are all part of a properly designed internal control system.

true    Correct or    falseIncorrectIncorrect