ACC 100 Unit 3 Challenges Sophia

Unit 3 Challenge 1

Bierman's, a local department store, sold a range of products. Yesterday, an order arrived for the appliance center. 300 ovens, purchased at a cost of $200 each, were distributed among 8 stores. 200 were sold for $300 each across all stores.

The cost of goods sold totals __________.

·        A.)

$90,000

·        B.)

$40,000

·        C.)

$20,000

·        D.)

$60,000

Milton's Tool and Tile sells a range of products. This week, the shipping department received 500 gallons of paint, purchased at a cost of $20 each, which were distributed among 18 stores. 420 were sold for $30 each across all stores.

The cost of goods sold equals ___________.

·        A.)

$15,000

·        B.)

$8,400

·        C.)

$10,000

·        D.)

$2,600

Clover Hardware sold a range of products. A few weeks ago, orders arrived for the garden center and outdoor living areas. 500 grills, purchased at a cost of $75 each, were distributed among 10 locations. 200 were sold for $175 each across all locations.

The cost of goods sold totals __________.

·        A.)

$37,500

·        B.)

$35,000

·        C.)

$2,500

·        D.)

$15,000

Paulsen Hardware offered a discount to customers who used the store credit card to purchase lumber. If a customer paid his or her bill in full within 30 days of a lumber purchase, 5% was deducted from the invoice amount, to be used as store credit on the customer’s next purchase.

A frequent customer of the Paulsen Hardware store, George, bought $25,000 worth of lumber using his store credit card. George paid his balance in full 27 days after making the purchase.

$1,250 would be recorded in the __________.

·        A.)

sales discount account

·        B.)

sales account

·        C.)

purchase account

·        D.)

purchase discount account

Carson Hardware offers a discount to customers who use the store credit card on purchases of building materials. When customers pay their bill in full within 15 days of a purchase, 2% can be deducted from the invoice amount, to be used as store credit on their next purchase.

A frequent customer of the Pleasantville Carson Hardware store, Moira, used her store credit card to buy 20 interior doors for $125 each. Moira paid her balance in full 10 days after the purchase.

Mike will record $50 in the __________.

·        A.)

purchases discount account

·        B.)

sales discount account

·        C.)

sales account

·        D.)

purchases account

Throughout September, Taylor Hardware offered a discount to customers who used their store credit card on paint purchases. When customers paid their bill in full within 30 days of a paint purchase, 10% was deducted from the invoice amount, to be used as store credit on their next purchase.

Louise is a building painter who purchased $7,500 worth of paint using her Taylor Hardware credit card. Louise paid her balance in full 29 days after the purchase.

$7,500 is recorded in the __________.

·        A.)

sales discount account

·        B.)

purchase discount account,

·        C.)

purchase account

·        D.)

sales account

The shipment Sally ordered for the summer collection at her clothing store arrived. As she reviewed the shipment, she referred to her expanded income statement below.

 

The Goods Available for Sale total is __________.

• A.)

$154,000

• B.)

$164,000

• C.)

$182,000

• D.)

$107,000

After Kyle completed the closing process, he looked forward to preparing his financial statements. He reviewed the accounts and began collecting the information for the expanded income statement.

 

The Goods Available for Sale total is __________.

• A.)

$113,000

• B.)

$121,000

• C.)

$27,000

• D.)

$59,000

The shipment Frederick ordered for the paint department at his hardware store arrived. As he checked the shipment, he referred to his expanded income statement below.

 

The Goods Available for Sale total is __________.

• A.)

$97,000

• B.)

$43,000

• C.)

$69,000

• D.)

$11,000

Mark reviewed the following expanded income statement to ensure that all accounts were accurate and up to date.

 

Based on the portion of an expanded income statement below, the Total Cost of Goods Sold is __________.

• A.)

$47,525

• B.)

$26,700

• C.)

$46,825

• D.)

$20,825

Kelly reviewed the following expanded income statement to ensure that all accounts were accurate and up to date.

 

Based on the portion of an expanded income statement below, the Total Cost of Goods Sold is __________.

• A.)

$82,990

• B.)

$38,745

• C.)

$78,245

• D.)

$68,745

Ryan reviewed the following expanded income statement to ensure that all accounts were accurate and up to date.

 

Based on the portion of an expanded income statement below, the Total Cost of Goods Sold is __________.

• A.)

$59,725

• B.)

$60,725

• C.)

$127,225

• D.)

$14,525

Shauna calculated the net sales for her company using the following figures:

Gross sales = $72,900
Sales discounts = $2,450
Purchase returns and allowances = $3,750
Sales returns and allowances = $2,550

The net sales of Shauna's company are __________.

·        A.)

$67,900

·        B.)

$71,650

·        C.)

$64,150

·        D.)

$69,150

Paula calculated the net sales for her company using the following figures:

Gross sales = $75,000
Discounts = $3,500
Freight in = $4,500
Sales returns and allowances = $6,750

The net sales of Paula's company are __________.

·        A.)

$60,250

·        B.)

$68,250

·        C.)

$69,250

·        D.)

$64,750

Mike calculated the net sales for his company using the following figures:

Gross sales = $50,000
Discounts = $1,800
Freight in = $2,750
Sales returns and allowances = $4,380

The net sales of the company are __________.

·        A.)

$41,070

·        B.)

$49,830

·        C.)

$46,570

·        D.)

$43,820

The reason for subsidiary ledgers is to collect data on customers purchasing habits and to see repeat customers __________.

·        A.)

expenses

·        B.)

purchasing habits

·        C.)

accounts

·        D.)

cash transactions

Sally owns a clothing company and found that she was selling more items, and a greater variety of items, to repeat customers. Sally's CPA advised her to create a set of accounts to separately track what each of her customers bought from her.

To track her customers' purchases, Sally should set up and use a(n) __________.

·        A.)

inventory account

·        B.)

sales subsidiary ledger

·        C.)

purchases subsidiary ledger

·        D.)

merchandising account

Which of the following descriptions is a benefit of having a subsidiary ledger?

·        A.)

Tracking the customers' cash transactions

·        B.)

Tracking the spending habits of frequent customers

·        C.)

Using customers' addresses to determine payment terms

·        D.)

Using customers' credit report scores to determine interest rates

Why are merchandising accounts closed?

·        A.)

To set the permanent accounts to open

·        B.)

To set the temporary accounts to open

·        C.)

To set the permanent accounts to zero

·        D.)

To set the temporary accounts to zero

The acronym used for the closing procedures of a merchandising company is:

·        A.)

(P) Purchases
(R) Revenues
(E) Expenses
(D) Drawings
(I) Income Summary

·        B.)

(M) Merchandise
(R) Revenues
(E) Expenses
(D) Drawings
(I) Income Summary

·        C.)

(R) Revenues
(E) Expenses
(D) Drawings
(I) Income Summary

·        D.)

(R) Revenues
(E) Expenses
(D) Drawings
(I) Income Summary
(M) Merchandise

Freight in is closed with a ________ because it has a natural ________ balance.

·        A.)

credit; credit

·        B.)

debit; debit

·        C.)

debit; credit

·        D.)

credit; debit

Which of the following accounts are closed to Income Summary with a debit entry?

·        A.)

Sales Returns and Allowances

·        B.)

Sales Discounts

·        C.)

Purchase Returns and Allowances

·        D.)

Freight In

Which of the following merchandise accounts are closed with a debit to Income Summary?

·        A.)

Purchase Discounts

·        B.)

Sales Discounts

·        C.)

Sales Returns and Allowances

·        D.)

Purchases

Which of the following accounts are closed with a credit to Income Summary?

·        A.)

Purchase returns and allowances, purchase discounts and purchases

·        B.)

Sales returns and allowances, sales discounts and purchases

·        C.)

Sales returns and allowances, sales discounts and sales

·        D.)

Purchase returns and allowances, purchase discounts and sales

Unit 3 Challenge 2

How does the periodic inventory accounting method track inventory and cost of goods sold?

• A.)

Calculates the current inventory and cost of goods sold in real time

• B.)

Calculates the current inventory and cost of goods sold at the end of the period

• C.)

Calculates the current inventory and cost of goods sold in the middle of the period

• D.)

Calculates the current inventory and cost of goods sold at the beginning of the period

Which of the following businesses would most likely use the perpetual inventory method?

• A.)

Yacht store

• B.)

Butcher shop

• C.)

Jewelry store

• D.)

Car dealership

Under the periodic inventory system, the merchandise inventory account balance is the __________.

• A.)

most recent computer update

• B.)

most recent inventory sale

• C.)

most recent inventory purchase

• D.)

most recent physical inventory

Using the FIFO method and the information in this image, what is the Cost of Units on Hand and Cost of Goods Sold during this period?

• A.)

Units on Hand: $3,480
Cost of Goods Sold: $13,240

• B.)

Units on Hand: $3,320
Cost of Goods Sold: $13,400

• C.)

Units on Hand: $3,180
Cost of Goods Sold: $13,540

• D.)

Units on Hand: $3,300
Cost of Goods Sold: $13,420

Using the FIFO method and the information in this image, what is the Cost of Units on Hand and Cost of Goods Sold during this period?

• A.)

Units on Hand: $18
Cost of Goods Sold: $166

• B.)

Units on Hand: $36
Cost of Goods Sold: $148

• C.)

Units on Hand: $24
Cost of Goods Sold: $160

• D.)

Units on Hand: $30
Cost of Goods Sold: $154

Using the FIFO method and the information in this image, what is the Cost of Units on Hand and Cost of Goods Sold during this period?

• A.)

Units on Hand: $7,410
Cost of Goods Sold: $15,000

• B.)

Units on Hand: $6,935
Cost of Goods Sold: $15,475

• C.)

Units on Hand: $7,220
Cost of Goods Sold: $15,190

• D.)

Units on Hand: $6,980
Cost of Goods Sold: $15,430

Using the LIFO method and the information in this image, what is the Cost of Units on Hand and Cost of Goods Sold during this period?

• A.)

Units on Hand: $1,750
Cost of Goods Sold: $1,925

• B.)

Units on Hand: $1,250
Cost of Goods Sold: $2,425

• C.)

Units on Hand: $1,350
Cost of Goods Sold: $2,325

• D.)

Units on Hand: $1,500
Cost of Goods Sold: $2,125

Using the LIFO method and the information in this image, what is the Cost of Units on Hand and Cost of Goods Sold during this period?

• A.)

Units on Hand: $2,150
Cost of Goods Sold: $5,830

• B.)

Units on Hand: $1,400
Cost of Goods Sold: $6,580

• C.)

Units on Hand: $2,050
Cost of Goods Sold: $5,930

• D.)

Units on Hand: $2,100
Cost of Goods Sold: $5,880

Using the LIFO method and the information in this image, what is the Cost of Units on Hand and Cost of Goods Sold during this period?

• A.)

Units on Hand: $3,120
Cost of Goods Sold: $14,480

• B.)

Units on Hand: $3,600
Cost of Goods Sold: $14,000

• C.)

Units on Hand: $3,520
Cost of Goods Sold: $14,080

• D.)

Units on Hand: $3,840
Cost of Goods Sold: $13,760

Taylor owns a boutique and needed to compute her inventory of all the scarves and jackets. She had 35 scarves on the floor and five in the storeroom. She had 15 jackets on the floor and eight more in the storeroom. Sally purchased each scarf for $28 and each jacket for $95.

The weighted average unit cost of scarves and jackets being sold is __________.

• A.)

$61.50

• B.)

$54.63

• C.)

$48.70

• D.)

$52.46

Michael owns a hair salon and needed to compute his inventory. He had 750 hair brushes on the floor and another 400 in the storeroom. He also had 25 hair dryers on the floor and 10 in the storeroom. Each hair brush costs $9 and each hair dryer costs $300.

Using the weighted average cost method, the cost of each item being sold is _________.

• A.)

$17.59

• B.)

$9.13

• C.)

$295.71

• D.)

$154.50

Wanda owns a book store and needed to compute her inventory.  She had 600 books on the floor and another 300 in the storeroom. She also had 45 electronic readers on the floor and 25 in the storeroom. Each book costs $15 and each electronic reader costs $250.

Using the weighted average cost method, the cost of each item being sold is __________.

• A.)

$132.50

• B.)

$19.44

• C.)

$31.96

• D.)

$192.86

Which of the following descriptions corresponds with the weighted average inventory valuation method?

• A.)

Inventory purchased first has a greater weight than inventory purchased later

• B.)

Matches cost of items purchased against cost of items in inventory

• C.)

Tends to be used for inventories of large, unique items

• D.)

Disregards when inventory was purchased

 

Which of the following descriptions corresponds with the LIFO inventory valuation method?

• A.)

Works best when inventory items are identical and intermingled

• B.)

Earliest goods purchased remain in inventory

• C.)

Practical for businesses that have very low inventory

• D.)

The first goods purchased are the first to be sold

Which of the following statements describes the FIFO inventory valuation method?

• A.)

It doesn't matter when the items are bought or sold because the cost is averaged.

• B.)

The goods are assumed to be sold over time from oldest to newest.

• C.)

The goods purchased last week are sold before the goods purchased last month.

• D.)

The goods purchased last month are sold after the goods purchased this month.

Which inventory method is being used when the natural flow of goods is followed?

• A.)

FIFO

• B.)

Specific ID

• C.)

LIFO

• D.)

Weighted average

Weighted average cost per unit is determined by __________ the cost of goods available for sale by the __________ after each purchase.

• A.)

dividing; number of units in inventory

• B.)

multiplying; number of units purchased

• C.)

dividing; number of units purchased

• D.)

multiplying; number of units in inventory

Under LIFO inventory method, when would a business sell the newest inventory?

• A.)

Newest inventory is sold last.

• B.)

Date of purchase does not matter for this method.

• C.)

Newest inventory is sold in the middle of the period.

• D.)

Newest inventory is sold first.

Which of the following accounts would the income statement of a merchandise and service company contain?

• A.)

Sales and Purchase Discounts

• B.)

Sales and Cost of Goods Sold

• C.)

Sales and Inventory

• D.)

Sales and Unearned Revenue

The financial statements of a merchandise company are intertwined in the following manner:

• A.)

Income Statement > Net Income > Statement of Changes in Owner’s Equity > Balance Sheet > Ending Capital

• B.)

Income Statement > Net Income > Ending Capital > Balance Sheet

• C.)

Income Statement > Ending Capital > Balance Sheet > Ending Capital

• D.)

Income Statement > Net Income >  Statement of Changes in Owner’s Equity > Balance Sheet

Which of the following accounts would the financial statement of a merchandise company include, but a service company would not?

• A.)

Accounts Receivable and Inventory

• B.)

Inventory and Unearned Revenue

• C.)

Inventory and Cost of Goods Sold

• D.)

Assets and Liabilities

Given the information provided in this illustration, what are the gross profit and gross margin ratio?

• A.)

Gross Profit: $67,800
Gross Margin Ratio: 15%

• B.)

Gross Profit: $72,100
Gross Margin Ratio: 16%

• C.)

Gross Profit: $379,600
Gross Margin Ratio: 82%

• D.)

Gross Profit: $383,900
Gross Margin Ratio: 85%

Given the information provided in this illustration, what are the gross profit and gross margin ratio?

• A.)

Gross Profit: $194,325
Gross Margin Ratio: 83%

• B.)

Gross Profit: $266,675
Gross Margin Ratio: 85%

• C.)

Gross Profit: $275,675
Gross Margin Ratio: 86%

• D.)

Gross Profit: $185,325
Gross Margin Ratio: 82%

Given the information provided in this illustration, what are the gross profit and gross margin ratio?

• A.)

Gross Profit: $718,400
Gross Margin Ratio: 81%

• B.)

Gross Profit: $1,055,400
Gross Margin Ratio: 84%

• C.)

Gross Profit: $846,800
Gross Margin Ratio: 91%

• D.)

Gross Profit: $758,500
Gross Margin Ratio: 82%

During the past six months, Roberta sold goods costing $35,500, her expenses totaled $2,500 and her freight in totaled $750. Her company's average stock of goods during the same period was $9,500.

The inventory turnover ratio for Roberta's company is __________.

• A.)

3.74

• B.)

3.55

• C.)

3.47

• D.)

3.39

During the year that ended December 31, Clarissa sold goods that cost $67,800, her expenses totaled $8,125 and her freight-in totaled $4,800. Her company's average stock of goods during the same period was $13,432.

Clarissa's company's inventory turnover ratio is __________.

• A.)

4.80

• B.)

5.05

• C.)

4.44

• D.)

4.09

During the past six months, Ben sold goods that cost $43,500, his expenses totaled $3,500 and his freight in totaled $1,750. His company's average stock of goods during the same period was $12,400.

The inventory turnover ratio for Ben's company is __________.

• A.)

3.93

• B.)

3.51

• C.)

3.08

• D.)

3.37

 

 

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Status NEW Posted 18 Apr 2020 10:04 AM My Price 12.00

ACC----------- 10-----------0 U-----------nit----------- 3 -----------Cha-----------lle-----------nge-----------s S-----------oph-----------ia-----------

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