ACC 557 Week 5 Quiz - Strayer NEW

All possible questions with answers.</strong>

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<h2>TRUE-FALSE STATEMENTS</h2>
<ol>
<li>Retailers and wholesalers are both considered merchandisers.</li>
</ol>
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Ans:, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

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<ol start="2">
<li>The steps in the accounting cycle are different for a merchandising company than for a service company.</li>
</ol>
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Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

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<ol start="3">
<li>Sales minus operating expenses equals gross profit.</li>
</ol>
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Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

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<ol start="4">
<li>Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.</li>
</ol>
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Ans:, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

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<ol start="5">
<li>A periodic inventory system requires a detailed inventory record of inventory items.</li>
</ol>
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Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

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<ol start="6">
<li>Freight terms of FOB Destination means that the seller pays the freight costs.</li>
</ol>
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Ans:, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

&nbsp;
<ol start="7">
<li>Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.</li>
</ol>
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Ans:, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

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<ol start="8">
<li>Sales revenues are earned during the period cash is collected from the buyer.</li>
</ol>
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Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

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<ol start="9">
<li>The Sales Returns and Allowances account and the Sales Discount account are both classified as expense accounts.</li>
</ol>
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Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

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<ol>
<li>The revenue recognition principle applies to merchandisers by recognizing sales revenues when they are earned.</li>
</ol>
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Ans:, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol>
<li>Sales Allowances and Sales Discounts are both designed to encourage customers to pay their accounts promptly.</li>
</ol>
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Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

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<ol start="2">
<li>To grant a customer a sales return, the seller credits Sales Returns and Allowances.</li>
</ol>
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Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

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<ol start="3">
<li>A company's unadjusted balance in Inventory will usually not agree with the actual amount of inventory on hand at year-end.</li>
</ol>
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Ans:, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

&nbsp;
<ol start="4">
<li>For a merchandising company, all accounts that affect the determination of income are closed to the Income Summary account.</li>
</ol>
&nbsp;

Ans:, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="5">
<li>A merchandising company has different types of adjusting entries than a service company.</li>
</ol>
&nbsp;

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

&nbsp;
<ol start="6">
<li>Nonoperating activities exclude revenues and expenses that result from secondary or auxiliary operations.</li>
</ol>
&nbsp;

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="7">
<li>Operating expenses are different for merchandising and service enterprises.</li>
</ol>
&nbsp;

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

&nbsp;
<ol start="8">
<li>Net sales appears on both the multiple-step and single-step forms of an income statement.</li>
</ol>
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Ans:, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="9">
<li>A multiple-step income statement provides users with more information about a company’s income performance.</li>
</ol>
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Ans:, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol>
<li>The multiple-step form of income statement is easier to read than the single-step form.</li>
</ol>
&nbsp;

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol>
<li>Inventory is classified as a current asset in a classified balance sheet.</li>
</ol>
&nbsp;

Ans:, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="2">
<li>Gain on sale of equipment and interest expense are reported under other revenues and gains in a multiple-step income statement.</li>
</ol>
&nbsp;

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="3">
<li>The gross profit section for a merchandising company appears on both the multiple-step and single-step forms of an income statement.</li>
</ol>
&nbsp;

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="4">
<li>In a multiple-step income statement, income from operations excludes other revenues and gains and other expenses and losses.</li>
</ol>
&nbsp;

Ans:, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="5">
<li>A single-step income statement reports all revenues, both operating and other revenues and gains, at the top of the statement.</li>
</ol>
&nbsp;

Ans:, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="6">
<li>If net sales are $800,000 and cost of goods sold is $600,000, the gross profit rate is 25%.</li>
</ol>
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Ans:, LO: 5, Bloom: AP, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

&nbsp;
<ol start="7">
<li>Gross profit represents the merchandising profit of a company.</li>
</ol>
&nbsp;

Ans:, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting
<ol start="8">
<li>Gross profit is a measure of the overall profitability of a company.</li>
</ol>
&nbsp;

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;
<ol start="9">
<li>Gross profit rate is computed by dividing cost of goods sold by net sales.</li>
</ol>
&nbsp;

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

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<sup>a</sup>30.     Purchase Returns and Allowances and Purchase Discounts are subtracted from Purchases to determine net purchases.

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Ans:, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

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<sup>a</sup>31.     Freight-in is an account that is subtracted from the Purchases account to arrive at cost of goods purchased.

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Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

&nbsp;

<sup>a</sup>32.     Under a periodic inventory system, the acquisition of inventory is charged to the Purchases account.

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Ans:, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

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<sup>a</sup>33.     Under a periodic inventory system, freight-in on merchandise purchases should be charged to the Inventory account.

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Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

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<sup>a</sup>34.     In a worksheet, cost of goods sold will be shown in the trial balance (Dr.), adjusted trial balance (Dr.) and income statement (Dr.) columns.

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Ans:, LO: 7, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

 

Continued.............

ALL Possible Questions With Answers

  • Item #: ACC557W5Q

ACC 557 Week 5 Quiz - Strayer NEW

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