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ABM1 - Finals Quiz

Quiz by Michelle

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20 questions
Show answers
  • Q1
    What is the formula for Gross Profit in accounting for merchandising business?
    Sales less salaries expenses
    Sales less operating expenses
    Sales less interest expenses
    Sales less cost of goods sold
    10s
  • Q2
    What is the formula for Net income in accounting for merchandising business?
    Sales less cost of goods sold less non cash expenses
    Sales less cost of goods sold less operating expenses
    Sales less operating expenses
    Sales less cost of goods sold
    10s
  • Q3
    When a merchandising business makes a credit sale, which of the following accounts is affected?
    Inventory and Sales Discounts
    Accounts Receivable and Revenue
    Accounts Payable and Revenue
    Cash and Cost of Goods Sold
    10s
  • Q4
    A merchandising business returns damaged goods to a supplier. The cost of the returned goods was Php2,000. How should this transaction be recorded?
    Debit Cost of Goods Sold, Credit Accounts Payable
    Debit Sales Returns and Allowances, Credit Inventory
    Debit Inventory, Credit Accounts Payable
    Debit Accounts Payable, Credit Inventory
    15s
  • Q5
    Which inventory system requires a physical count of inventory at the end of the accounting period to determine the ending inventory?
    Perpetual Inventory System
    Just-in-Time Inventory System
    Periodic Inventory System
    Weighted-Average Inventory System
    10s
  • Q6
    Under which inventory system is the cost of goods sold updated with each sale of inventory?
    FIFO Inventory System
    Moving Average Inventory System
    Periodic Inventory System
    Perpetual Inventory System
    10s
  • Q7
    What is the primary advantage of using a perpetual inventory system over a periodic inventory system?
    It provides continuous updates of the inventory and cost of goods sold.
    It eliminates the need for a physical count of inventory.
    It requires less record-keeping.
    It is easier to track inventory on a daily basis.
    15s
  • Q8
    In a perpetual inventory system, how is the cost of goods sold calculated when inventory is sold?
    The system calculates the cost of goods sold at the end of the period based on the ending inventory.
    The cost of goods sold is calculated using a periodic formula, based on purchases and sales.
    The cost of goods sold is not recorded in a perpetual system until year-end adjustments are made.
    The cost of goods sold is calculated automatically each time an item is sold, based on the cost recorded for that item.
    20s
  • Q9
    How does the periodic inventory system affect the timing of recognizing the cost of goods sold (COGS)?
    COGS is recognized when inventory is purchased, not when it is sold.
    COGS is calculated only at the end of the accounting period, after a physical inventory count is completed.
    COGS is recognized after every sale, as inventory is updated in real-time.
    COGS is never recognized in the periodic system.
    15s
  • Q10
    A company purchases goods worth Php4,000 and returns Php500 of these goods. In a perpetual inventory system, what journal entry should be made for the returned goods?
    Debit Accounts Payable, credit Inventory
    Debit Purchases, credit Accounts Payable
    Debit Inventory, credit Purchases
    Debit Purchases, credit Inventory
    15s
  • Q11
    A company has sold inventory for Php3,000 under a perpetual inventory system. The cost of goods sold is Php2,000. Which of the following is the correct journal entry to record the sale?
    Debit Cost of Goods Sold, credit Inventory
    Debit Inventory, credit Accounts Receivable
    Debit Accounts Receivable, credit Sales Revenue
    Debit Sales Revenue, credit Cost of Goods Sold
    15s
  • Q12
    A company using a periodic inventory system sells inventory worth Php1,500. The cost of goods sold is Php1,000. How should this be recorded?
    Debit Accounts Receivable and credit Sales Revenue
    Debit Cost of Goods Sold and credit Purchases
    Debit Inventory and credit Cost of Goods Sold
    Debit Purchases and credit Accounts Receivable
    15s
  • Q13
    A company using a perpetual inventory system sells goods worth Php5,000. The cost of goods sold is Php3,500. What is the correct journal entry for the sale?
    Debit Accounts Receivable Php5,000, credit Sales Revenue Php5,000
    Debit Sales Revenue Php5,000, credit Accounts Receivable Php5,000
    Debit Cost of Goods Sold Php3,500, credit Accounts Receivable Php3,500
    Debit Accounts Receivable Php5,000, credit Sales Revenue Php5,000; Debit Cost of Goods Sold Php3,500, credit Inventory Php3,500
    15s
  • Q14
    A company has two inventory systems in place: a perpetual inventory system for high-value items and a periodic inventory system for low-value items. Which of the following is the primary reason for this difference in systems?
    a. The perpetual system is more accurate for high-value items because it provides real-time tracking of inventory.
    The periodic system is more expensive and complex for tracking high-value items.
    The periodic system is preferred for high-value items to avoid excessive record-keeping.
    The perpetual system is used for low-value items because it requires less monitoring.
    15s
  • Q15
    A company using the perpetual inventory system has the following information for the year: Beginning inventory: Php5,000 Purchases during the year: Php30,000 Sales during the year: Php40,000 Ending inventory: Php10,000 What is the cost of goods sold (COGS) for the year?*
    Php40,000
    Php35,000
    Php30,000
    Php25,000
    20s

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