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Quiz for ACIS 2115 - Principles of Accounting at Virginia Tech (VT)

Quiz Information

Material Type:Quiz 5
Professor:Staff
Class:ACIS 2115 - Principles of Accounting
Subject:Accounting & Information Systems
University:Virginia Polytechnic Institute And State University
Term:Fall 2005
Keywords:
  • Perpetual Inventory Method
  • Payment Terms
  • Net Cash Inflow
  • Perpetual Inventory Records
  • Beginning Inventory Balance
  • Fob Shipping Point
  • Discount Period
  • Period Cost
  • Perpetual Inventory
  • Inventory Purchases
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Sample Document Text

ACIS 2115 Quiz 5 - October 7, 2005 1. ABC Co. purchased $5,000 of inventory on account with payment terms of 2/10, n/30. The goods were delivered FOB shipping point. ABC paid freight costs of $200 in cash. ABC paid for the goods within the discount period. Assuming a beginning inventory balance of zero, what would be the balance in the inventory account after the purchase and payment for inventory were recorded? ABC Co. keeps perpetual inventory records and uses the net method of accounting for inventory purchases. A. $5,200. B. $5,100. C. $5,000 D. $4,900. E. $4,700. 2. X Co. purchased $2,000 of inventory on account. This inventory was sold for $3,000 cash. X Co. also paid operating expenses of $500 in cash. The amount of gross margin reported on the income statement and the amount of net cash inflow from operating activities reported on the statement of cash flows would be A. $500 / $500. B. $500 / $2,500. C. $1,000 / $500. D. $1,000 / $2,500. E. $2,500 / ...

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Date of Record Notes
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