Question 1

Your store buys ice cream at a cost of $1.50 a half gallon and sells it for $4 a half gallon. General and administrative expenses are $0.75. Which of the following statements is true?

Accepted Answer

A)   Your gross profit per half gallon is $2.50.
B)   Your gross profit per half gallon is $1.75.
C)   $2.50 is recorded in an account titled Gross Profit.
D)   $1.75 is recorded in an account titled Gross Profit.E) A) and C)
F) B) and D)

Question 2

On October 31, 2010, your company's records say that the company has $16,451.03 in its checking account. A review of the bank statement shows you have three outstanding checks totaling $5,643.01, and the bank has paid you interest of $12.19 and charged you $9.00 in fees. The bank statement dated October 31, 2010 would report a balance of:

Accepted Answer

A)   $22,090.85.
B)   $10,811.21.
C)   $22,097.23.
D)   $10,804.83.E) A) and C)
F) All of the above

Question 3

A retailer is a company that buys products from manufacturers and sells them to wholesalers.

Accepted Answer

A) True 
 B)False

Question 4

When you identify interest received from the bank in performing a bank reconciliation, you must:

Accepted Answer

A)   add the amount of interest to the balance per bank.
B)   deduct the amount of interest from the balance per books.
C)   add the amount of interest to the balance per books.
D)   deduct the amount of interest from the balance per bank.E) A) and D)
F) None of the above

Question 5

A store holding a "25% off" sale will probably experience gross profit than usual and sales volume.

Accepted Answer

A)   higher, higher
B)   lower, lower
C)   higher, lower
D)   lower, higherE) All of the above
F) C) and D)

Question 6

Electronic funds transfer (EFT) is the use of electronic communications to transfer funds from one party's bank account to another.

Accepted Answer

A) True 
 B)False

Question 7

The principles of internal control include which of the following?

Accepted Answer

A)   Use only computerized systems
B)   Establish responsibilities
C)   Maintain minimal records
D)   Require automated sales systemsE) B) and C)
F) A) and D)

Question 8

What is the journal entry that B. Darin Company makes on October 4 to record the sales return?

Accepted Answer

A)   Option A
B)   Option B
C)   Option C
D)   Option DE) All of the above
F) B) and D)

Question 9

Gross profit or gross margin is not a ledger account name.

Accepted Answer

A) True 
 B)False

Question 10

When merchandise is sold, the cost of the merchandise is removed from Inventory and reported on a multistep the income statement as

Accepted Answer

A)   Inventory expense
B)   Cost of goods sold
C)   General & administrative expenses
D)   Non-operating expensesE) B) and C)
F) A) and D)

Question 11

Income from Operations for 2011 would be

Accepted Answer

A)   $6,000
B)   $10,000
C)   $11,000
D)   $12,000E) All of the above
F) A) and D)

Exam 6: Internal Control and Financial Reporting for Cash and Merchandise Sales

What is the journal entry that B. Darin Company makes on October 4 to record the sales return?

Correct Answer
verified

Your store buys ice cream at a cost of $1.50 a half gallon and sells it for $4 a half gallon. General and administrative expenses are $0.75. Which of the following statements is true?

Correct Answer
verified

Correct Answer
verified

The principles of internal control include which of the following?

Correct Answer
verified

When merchandise is sold, the cost of the merchandise is removed from Inventory and reported on a multistep the income statement as

Correct Answer
verified

Electronic funds transfer (EFT) is the use of electronic communications to transfer funds from one party's bank account to another.

Correct Answer
verified

Income from Operations for 2011 would be

Correct Answer
verified

When you identify interest received from the bank in performing a bank reconciliation, you must:

Correct Answer
verified

Gross profit or gross margin is not a ledger account name.

Correct Answer
verified

A retailer is a company that buys products from manufacturers and sells them to wholesalers.

Correct Answer
verified

A store holding a "25% off" sale will probably experience gross profit than usual and sales volume.

Correct Answer
verified

Exam 6: Internal Control and Financial Reporting for Cash and Merchandise Sales

What is the journal entry that B. Darin Company makes on October 4 to record the sales return?

Correct AnswerverifiedShow Answer

Your store buys ice cream at a cost of $1.50 a half gallon and sells it for $4 a half gallon. General and administrative expenses are $0.75. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The principles of internal control include which of the following?

Correct AnswerverifiedShow Answer

When merchandise is sold, the cost of the merchandise is removed from Inventory and reported on a multistep the income statement as

Correct AnswerverifiedShow Answer

Electronic funds transfer (EFT) is the use of electronic communications to transfer funds from one party's bank account to another.

Correct AnswerverifiedShow Answer

Income from Operations for 2011 would be

Correct AnswerverifiedShow Answer

When you identify interest received from the bank in performing a bank reconciliation, you must:

Correct AnswerverifiedShow Answer

Gross profit or gross margin is not a ledger account name.

Correct AnswerverifiedShow Answer

A retailer is a company that buys products from manufacturers and sells them to wholesalers.

Correct AnswerverifiedShow Answer

A store holding a "25% off" sale will probably experience gross profit than usual and sales volume.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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