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12 The inventory system employing accounting records that continuously disclose the amount of inventory is called A

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12 The inventory system employing accounting records that continuously disclose the amount of inventory is called

A. periodic

B. perpetual

C. physical

D. retail

13. Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. The Pound Co. paid the invoice within the discount period. What is the sales amount to be recorded in the above transactions?

a.$25,500

b.$26,010

c.$24,990

d.$16,000

14. Calculate income from operations for Jonas Company based on the following data:

Sales	$764,000
Operating expenses	52,500
Cost of merchandise sold	538,000

a.$173,500

b.$226,000

c.$711,500

d.$485,500

15. Calculate the gross profit for Jefferson Company based on the following:

Sales	$764,000
Selling Expenses	42,500
Cost of Merchandise Sold	538,000

a.$226,000

b.$721,500

c.$495,500

d.$183,500

16. Which of the following is not a difference between a retail business and a service business?

A. the inclusion of gross profit on the income statement

B. merchandise inventory included on the balance sheet

C. accounting equation

D. in what is sold

17. Who is responsible for the freight costs when the terms are FOB shipping point?

A. the buyer

B. the seller

C. the ultimate customer

D. either the seller or the buyer

18. Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a

A. credit to Sales

B. credit to Accounts Payable

C. debit to Cost of Merchandise Sold

D. credit to Merchandise Inventory

19. The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be

A. Jan. 1  Office Supplies 1,500
               Cash 1,500

B Jan. 1  Merchandise Inventory 1,500
Cash 1,500

C. Jan. 1  Purchases 1,500
               Accounts Payable 1,500

D. Jan. 1  Cash 1,500
               Accounts Receivable 1,500

20. During the current year, merchandise is sold for $137,500 cash and $425,600 on account. The cost of the merchandise sold is $322,325.

What is the amount of the gross profit? $_______

21. The control environment in an internal control structure is the overall attitude of management and employees about the importance of internal control.

True or False

22. Businesses who have several bank accounts, petty cash, and cash on hand, would maintain a separate ledger account for each type of cash.

True or False

23. In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.

True or False