1/Under a perpetual inventory system, which of the following accounts would be used to record purchases
a) Sales.
b) Inventory.
c) Purchases.
d) Cost of sales.
2)Billy’s Boots purchased inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Billy’s Boots pays within the discount period?
3)Freight costs incurred by a seller on merchandise sold to customers will cause an increase:
a)to the cost of sales of the seller.
b)to a discount received account of the seller
c)in operating expenses for the seller.
d)in the selling expenses of the buyer.
4)The amount of net sales on the income statement would be?
Operating expenses $ 45,000
Sales returns and allowances 13,000
Sales discount 6,000
Sales revenue 150,000
Costs of sales 77,000
5) The amount of gross profit on the income statement would be?
Operating expenses $ 45,000
Sales returns and allowances 13,000
Sales discount 6,000
Sales revenue 150,000
Costs of sales 77,000
6)Hammer Hardware sold goods to James Brown on credit at a price of $2,750.00 including GST. What is the correct accounting entry to record this transaction in Hammer Hardware’s books?
a)Debit Accounts receivable $2,750; credit Sales $2,750.
b)Debit Accounts receivable $2,500; credit Sales $2,500.
c)Debit Accounts receivable $2,500; debit GST collections $250; credit Sales $2,750.
d)Debit accounts receivable $2,750; credit Sales $2,500; credit GST collections $250.
7) Under the perpetual inventory system what is the correct entry for the credit purchase of 5 washing machines at $300 per washing machine plus GST of $30 each?
a)Debit Inventory $1,500, Debit GST $150; Credit Accounts payable $1,650
b)Debit Inventory $1,650; Credit Accounts payable $1,500, Credit GST $150
c)Debit Accounts payable $1,650; Credit Inventory $1,500, Credit GST $150
d)Debit Inventory $1,650; Credit Accounts payable $1,650