1.During the month of March, Wang Company sold merchandise on account for $9,100. The merchandise had cost Wang $4,900. Which of the following represents the effects of this transaction on Wang’s financial statements?

test2 q17 (Points : 2)

2.What is the relationship between gross margin and net income? (Points : 2)

3.Which of the following is not a period cost? (Points : 2)

4.Cost of Goods Sold is reported as a(n): (Points : 2)

5.Whitney Company’s Cost of Goods Available for Sale for 2010 was $610,000. Which of the following statements is true? (Points : 2)

6.Merchandising businesses: (Points : 2)

7.Gruver Company maintains perpetual inventory records. The company’s inventory account had a $5,500 balance as of December 31, 2010. On that date, a physical count of inventory showed only $5,300 of merchandise in stock. The write-down to recognize the missing inventory will: (Points : 2)

8.Lemon Company sent goods to a customer FOB delivery. What effect will these freight costs have on Lemon company’s financial statements?

test2 q23 (Points : 2)

9.Gross margin is equal to: (Points : 2)

10.Which of the following statements accurately describes a fidelity bond? (Points : 2)

11.Which of the following is not a reason why a business needs strong internal controls over cash? (Points : 2)

12.What documentation issued by a bank increases a company’s checking account balance at the bank? (Points : 2)

13.What documentation issued by a bank increases a company’s checking account balance at the bank? (Points : 2)

14.In preparing a bank reconciliation, typical adjustments to the bank balance include: (Points : 2)

15.Wren Company accepted a check from Jay Company as payment for services rendered. Wren’s bank statement revealed that the Jay check was an NSF check. Wren has not decided to write off the account. Exclusive of any bank charges what will the entry to record the NSF check have on the accounting equation of Wren Company?

Row Total Assets Total Equity
One No effect No effect
Two Decrease Decrease
Three Decrease No effect
Four No effect Decrease

(Points : 2)

16.Which of the following is not one of the purposes of an internal control system? (Points : 2)

17.Unger Company uses the perpetual inventory method. Unger sold goods that cost $3,500 for $7,200. If the sale was made to a customer on account, the sale will: (Points : 2)

18.The most effective way to reduce opportunities for ethical or criminal misconduct is: (Points : 2)

19.The following are strong control measures over cash receiptsexceptfor: (Points : 2)

20.An entry to record the purchase of inventory on account under the perpetual inventory method: (Points : 2)