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Merchandising Operations and Inventory in Accounting Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which of the following is a costing method that is used to track cost specific and identifiable inventory items that are either in or out of stock?

Question 2 2. In a cash sale, which of the following accounts are debited?

Question 3 3. What is the formula for calculating net income?

Question 4 4. If the current market price of an item falls between the market ceiling and the market floor, what price is used to value inventory?

Question 5 5. Which of the following statements BEST describes recording sales?

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Question 6 6. NRV is calculated by subtracting which of the following from the sales price of an item?

Question 7 7. What are items that are acquired by a distributor for the purpose of resale to a third party called?

Question 8 8. Which of the following accounts are debited in a credit sale?

Question 9 9. The _____ refers to the total dollar amount a business paid for the products it sold.

Question 10 10. The business that owns goods placed on consignment is called what?

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Question 11 11. Which goods in transit are counted in the merchandise inventory of the buyer as soon as the items are shipped?

Question 12 12. In a sale on account, which of the following accounts are credited?

Question 13 13. Which accounting term is used only to record the purchase cost of items that are intended to be resold?

Question 14 14. Which inventory system records inventory at specific points in time?

Question 15 15. Sam sells his inventory from a booth. He grabs whichever item he can and, at the end of the month, has sold everything. Which costing method would Sam use?

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Question 16 16. Which of the following is created within a business when a customer pays for merchandise with their store credit card?

Question 17 17. What is the accounting equation for calculating the cost of purchasing inventory?

Question 18 18. Which of the following accounting terms is a discount given by a merchant to a supplier for paying invoices on time?

Question 19 19. Which accounting term refers to buying items that are meant to be resold to customers?

Question 20 20. I have 10 scarves left in inventory at the end of the accounting period. I paid my supplier $5 per scarf. It cost $18 to ship the scarves and $13 to store the scarves. The market value of the scarves is $8.50. I expect to incur $1.30 per scarf in selling expenses. I am selling the scarves for $10.00 each. What is the total cost of the scarves, and what is the price that is used for inventory valuation based on the Lower of Cost or Market rule?

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Question 21 21. Which of the following is a costing method that assumes inventory items are sold in the order in which they are acquired?

Question 22 22. When an inventory purchase is paid for with cash, what account is credited?

Question 23 23. Janice runs a ski shop and is finalizing her reports for the month of May. At the start of the month, her merchandise inventory stood at $10,300. She made $14,600 in inventory purchases during the month and by the end of May her merchandise inventory stood at $11,700. What was her cost of goods sold for this period?

Question 24 24. Which of the following are discounts offered to customers in exchange for paying their bill within a given time frame?

Question 25 25. What is the cost of moving merchandise from one place to another called?

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Question 26 26. Which of the following is an entry made on the left side of an account that increases the balance in an asset account and decreases the balance in liability and equity accounts?

Question 27 27. Which type of inventory system requires closing entries?

Question 28 28. The return that you would expect to get on an item after the item has been sold and the cost of selling that item has been subtracted is called what?

Question 29 29. Market Ceiling is the same as what?

Question 30 30. Which costing method assumes that the most recent inventory items purchased are the first ones to be sold, and inventory items purchased first are sold last?

Merchandising Operations and Inventory in Accounting Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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