Financial Accounting Quiz

Topics: Revenue, Generally Accepted Accounting Principles, Balance sheet, Accounts receivable, Income statement, Inventory / Pages: 7 (1594 words) / Published: Aug 22nd, 2010
Financial Accounting Assignment 2

1 of 25
The credit term 2/10 n/30 means: that after 10 days 2% interest is charged. that there is a 10% discount if payment is received within 30 days. that there is a 2% discount if payment is received within 10 days. there is a 10% discount if paid immediately and 2% if paid within 30 days.

2 of 25
Family Food Stores purchased canned goods at an invoice price of $3,000 and terms of 2/10, n/30. Half of the goods had been mislabeled and were returned immediately to the supplier. If Family Food pays the remaining amount of the invoice within the discount period, the amount paid should be:

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The balance shown on a bank statement is always equal to the month-end balance of a company’s cash account in the general ledger.

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The allowance for Doubtful Accounts is called a valuation account or contra-asset account and normally has a credit balance.

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The allowance for Doubtful Accounts is an expense account and appears on the income statement.

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In a perpetual inventory system, two entries usually are made to record each sale transaction. The purpose of these entries are best described as follows: one entry recognizes the sales revenue, and the other recognizes the cost of goods sold. one entry records the purchase of the merchandise, and the other records the sale. one entry records the cost of goods sold, and the other reduces the balance in the inventory account. one entry updates the general ledger, and the other updates the subsidiary ledgers.

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Television Depot is a small retail business that specializes in the sale of top-of-the-line televisions. This year, the store has begun to carry the Flat TV manufactured by Panasar Co. Thus far this year, Television Depot has recorded the following transactions involving the Flat TV:

Jan. 5. Purchased 7 Flat TVs at a unit cost of $1,200
Jan. 18. Purchased 4 additional

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