QUIZ - FINALS Set A = 50 POINTS

1 Which of the following journal entry is correct for the transactions of good returned by a customer (1 pt)
Account to be debited Account to be credited
a. Sales Returns Trade Payables
b. Sales Returns Trade Receivables
c. Purchase Returns Trade Payables
d. Purchase Returns Trade Receivables

2 Which of the following statements is correct about credit period? (1 PT)

a. If a customer purchases goods within the credit period, a cash discount will be allowed to the customer.
b. If a customer settles the payment within the credit period, a cash discount will be allowed to the customer.
c. It refers to the period within which the customers must settle their debts due.
d. It refers to the period within which the customers need to settle one-third of the debts in order to avoid further interest charged.

3 ABC Merchandising sold 10 units of goods with a unit list price of P2,000 on January 1, 2018. Given that the trade discount is 5% and the
cash discount is 10%, and that the cash discount period is 10 days and the credit period is 30 days, if the customer settles the debt on
January 28, 2018, what is the actual amount he needs to pay? (2 PTS)

a. P17,100 b. P18,050
c. P19,000 d. P20,000

4 Which of the following is correct about purchase discounts? (1 PT)

a. It refers to the discount offered by a third party for some reasons.
b It refers to the discounts enjoyed by customers due to bulk purchases.
c. It refers to the discounts offered by the supplier to customers due to the earlier settlement of debts.
d. It refers to a reduction of the list price.

Based on the following information, answer Questions 5 and 6

Suppose Urduja Stores received settlement of debt from Lapu-lapu Trading by cash. Lapu-lapu Trading purchased goods with a list price
of P100,000 on January 01 with a trade discount of 5%. Suppose the cash discount period is 15 days with a cash discount of 4% and
Lapu-lapu Trading settlement the payment on January 10 in full.

5 What is the amount of sales discounts given to Lapu-lapu Trading? (1 PT)

a. P1,380 b. P3,800
c. P4,000 d. P5,000

6 The correct journal entry for the settlment of debts owned by Lapu-lapu Trading should be: (2 PTS)
Account(s) to be debited Account(s) to be credited
a. Cash P91,200 Accounts Receivable P95,000
Sales Discounts P3,800
b. Cash P96,000 Accounts Receivable P100,000
Sales Discounts P4,000
c. Accounts Receivable P100,000 Sales Discounts P4,000
Cash P96,000
d. Accounts Receivable P95,000 Cash P98,800
Sales Discounts P3,800

7 Which of the following is a correct definition of gross profit? (1 PT)

a. Gross Profit = Profit - Other Expenses
b. Gross Profit = Net Sales - Net Purchases
c. Gross Profit = Net Sales - Cost of Goods Sold
d. Gross Profit = Net Purchases + Cost of Goods Sold

8 What is the meaning of Transportation In? (1 PT)

a. the expenses spent on carrying the returned goods from customers
b. the expenses spent on carrying the goods returned to the suppliers
c. the expenses spent on carrying the goods sold to customers
d. the expenses spent on carrying the good purchased from suppliers to the entity

9 Under the perpetual inventory system, in addition to making the entry to record a sale, an entity would (1 PT)
a. debit Cost of Goods Sold and Credit Merchandise Inventory
b. debit Cost of Sold and credit Purchases
c. debit Merchandise Inventory and credit Cost of Goods Sold
d. make no additional entry until the end of the period

###Merchandise inventory becomes part of the Cost of Goods Sold when an entity (1 PT)
a. pays for the inventory. b. purchases the inventory.
c. sells the inventory. d. receives payment from the customer.

###Goods totalling P50,000 were purchased February 02 with terms 2/10, n/30. Return of P10,000 were made on February 10. What
discounts, if any can be availed of if the invoice was paid on February 12. (2 PTS)
a. P 200 b. P 1,000
c. P 800 d. None

###Under the periodic inventory system, the payment of a purchase of P60,000, within the terms 2/10, n/30 would include a (2 PTS)

a. debit to Accounts Payable for P58,800

b. debit to Purchases for P60,000
c. credit to Merchandise Inventory P1,200
d. credit to Purchases Discounts for P1,200
###The amount of the cost of goods available for sale (COGAS) during the year depends on the amounts of (1 PT)
a. beginning merchandise inventory and cost of goods sold
b. beginning merchandise inventory and net purchases
c. beginning merchandise inventory, cost of goods sold and ending merchandise inventory
d. beginning merchandise inventory, net purchases and ending merchandise inventory

###When the seller advances the transportation costs and the terms of sale are FOB Shipping point, the seller records the payment of the
transportation costs by debiting (1 PT)
a. accounts payable b. sales
c. accounts receivable d. transportation out

###The excess of net sales over the cost of goods sold is called (1 PT)
a. gross profit b. operating profit
c. merchandising income d. profit

###Purchases P12,000 with terms 2/10, n/30, FOB shipping point, Freight Charges P1,000, Purchase Return P3,000
What is the amount of cash required to be paid? (2 PTS)
a. P 9,760 b. P 9,820
c. P 9,800 d. P 9740

###Purchase List Price P357,000 with terms 3/10, n/30, FOB Destination, Freight Charges P14,000, Purchase Return P24,000, Trade Discount
20%. Returns are made one day after the item has been received and payment are made within the discount period. What is the
amount required to settle the purchase. (2 PTS)

a. P 267,752 b. P 253,032
c. P 229,752 d. P 253,752

Net Sales P130,000

Beginning Inventory P12,000
Cost of Goods Sold (60% of COGAS) P30,000

###What is the amount of the Goods Available for Sale? (2 PTS)

a. P 50,000 b. P 80,000
c. P 88,000 d. P 75,000

###What is the amount of Net Cost of Purchases? (1 PT)

a. P 20,000 b. P 62,000
c. P 38,000 d. P 68,000

###What is the amount of Ending Inventory? (1 PT)

a. P 80,000 b. P 38,000
c. P 70,000 d. P 20,000

###On Feb 18, 2018, a fire destroyed the merchandise inventory of JFR Merchandising. The following information was available from the
entity's accounting office: (2 PTS)
Cost of Goods Sold P 1,260,000
Transportation In P 39,600
Merchandise Inventory, Jan 01, 2018 P 300,000
Purchase Discounts P 26,400
Purchase Returns & Allowances P 46,200
Purchases P 1,320,000
What is the value of the merchandise destroyed by fire?
a. P 287,400 b. P 900,000
c. P 373,200 d. P 327,000

Some of the sales transactions of RR Torres Distributors whose credit terms are 2/10, n/30 follow:
June 01 Cash Sales, P 180,000
04 Sales on account, P 650,000
05 Received returned merchandise sold on account, P 90,000
10 Collected the amount due from credit sales
###What should be the amount of net sales that RR Torres Distributors show in the Income Statement? (2 pts)
a. P 740,000 b. P 727,000
c. P728,800 d. P 560,000

###How much should be the total amount of cash received on June 10 (1 PT)
a. P 637,000 b. P 548,800
c. P 728,800 d. P 725,200

###The December 31, 2018 trial balance for Elton John Miraflores Company included the following: purchases, P 40,000; purchase returns
and allowances, P 2,000; transportation out, P1,500; transportation in, P3,000; ending inventory was P 8,000. What was the cost of
goods sold for 2018? (2 PTS)

a. P 39,000 b. P 31,500
c. P 33,000 d. none of the above

###Ventura Trading purchased merchandise from Angel Yu Retailers for P 3,600 list price, subject to a trande discount of 25%. The goods
were purchased on terms of 2/10, n/30 FOB Destination. Ventura Trading paid P 100 for the transportations costs. Ventura returned P
400 (which is at list price) of the merchandise to Angel Yu and later paid the amount due within the discount period. The amount paid is
(2 PTS)

a. P 2,254 b. P 2,246
c. P 2,252 d. P 2,352
###A P 5,000 purchases on account was made. The entry to record the payment on account after the expiration of the 2% discount period
would include a
a. credit to Accounts Payable for P 4,900
b. credit to Cash for P 4,900
c. debit to Accounts Payable for P 5,000
d. debit to Purchases Discounts for P 100

###A purchase of merchandise amounting to P 3,360 is inclusive of a 12% VAT. Which of the following statements is true? (1 PT)
a. the amount does not include a 12% VAT of P360
b. the amount of 12% VAT must be added to P3,360
c. P 3,360 is the basic purchase price that includes already the VAT
d. P 3,000 is the basic purchase price without the 12% VAT

###Ramos sold merchandise on account to Cammayo, P250,000. Terms: 40% Trade Discount; FOB shipping point; 2/10, n/30
What is the journal entry to be recorded by Cammayo for the above transaction? (2 PTS)
Account(s) debited Account(s) credited
a. Accounts Receivable P150,000 Sales P150,000
b. Purchases P150,000 Accounts Payable P150,000
c. Accounts Receivable P250,000 Sales P250,000
d. Purchases P250,000 Accounts Payable P250,000

###Based on Question No. 27 above, if Cammayo pays the amount due within the discount period, what is the journal entry of Ramos? (1
PT)
Account(s) debited Account(s) credited
a Cash P245,000 Accounts Receivable P250,000
Sales Discount P5,000
b. Cash P147,000 Accounts Receivable P150,000
Sales Discount P3,000
c. Accounts Payable P150,000 Cash P147,000
Purchases Discounts P3,000
d. Accounts Payable P250,000 Cash P245,000
Purchases Discounts P5,000

###The resulting amount after deducting the Operating Expenses from the Gross Profit is called (1 PT)
a. Net Profit b. Operating Profit
c. Profit d. Proft before Tax

###The transportation cost to be shouldered by the seller must be shown under which portion of the Income Statement? (1 PT)
a. Added to the Net Purchases to derive at the Net Cost of Purchases
b. Included in the Operating Expenses under the Selling Expenses Category
c. Deducted from the Sales to derive at the Net Sales
d. Included in the Operating Expenses under the Administrative Expenses Category

###The closing entry for the Merchandise Inventory Beginning is (1 PT)

Account debited Account credited
a. Merchandise Inventory Income Summay
b Income Summary Merchandise Inventory
c. Merchandise Inventory Capital Account
d. Capital Account Merchandise Inventory

###How should the Depreciation Expense - Store Equipment be shown in the Income Statement ? (1 PT)
a. Included in the Operating Expenses under the Selling Expenses Category of a service industry
b. Included in the Operating Expenses under the Administrative Expenses Category of a service industry
c. Included in the Operating Expenses under the Selling Expenses Category of a merchandising business
d. Included in the Operating Expenses under the Administrative Expenses Category of merchandising business

###Which of the following statements is true? (1 PT)

a. Physical inventory is required but not necessary under the Perpetual Inventory System
b. Physical inventory is required but not necessary under the Periodic Inventory System
c. Physical inventory is required and necessary under the Periodic Inventory System
d. Physical inventory is not required and not necessary under the Perpetual Inventoy System

###Which of the following statements is not true? (1 PT)

a. A physical inventory is required in the periodic inventory system in order to establish the ending balance of the merchandise
inventory.
b. The beginning and ending balance of the merchandise inventory in the periodIC inventory system are the same before any closing
entries are made.
c. The cost of goods sold will be determined by obtaining the general ledger balance of the Purchases account.
d. The cost of goods sold will not be determined without undertaking a physical inventory.

###A company sales merchadise for P5,000, net of 20% sales discount. What is the amount of the sales discount? (2 PTS)
a. P 1,250 b. P 1,000
c. P 25,000 d. P 4,000
B 1

C 1

20000
0.95
C 2 19000
no discount, beyond discount period

C 1

95000 AR CREDIT
0.04
B 1 3800 SD DEBIT
91200 CASH DEBIT

A 2

C 1

D 1

A 1

C 1

50000 40000
-10000 0.02
C 2 40000 800

D 2 60000 Accounts Payable P60,000

0.02 Cash P58,800
1200 Purchase discount 1,200
B 1

C 1

A 1

12000 8820
B 2 -3000 1000
9000 9820
0.98

357000
D 2 0.8
285600
-24000
261600
0.97 253,752.00
60%

Net Sales 130,000.00

A 2 Beginning Inventory 12,000.00
Net Cost of Purchases 38,000.00
Cost of Good Avaialable for Sale 50,000.00
Ending Inventory 20,000.00
C 1 Cost of Goods Sold (60% of COGAS) 30,000.00
Gross Profit 100,000.00

D 1

Beg Inty 300000

Purchases 1320000
PRA -46200
PD -26400
Trans In 39600
1587000
COGS -1260000
327000

D 2

C 2
180000
548800
728800
B 1

40000
-2000
C 2 3000
-8000 33000

C 2
C 2

D 1

250000 DEBIT PURCHASES 150.000

0.6 CREDIT ACCOYNTS PAYABLE 150,000
150000
CAMMAYO IS BUYER

B 2

3000 DEBIT CASH 147,000

147000 DEBIT SALES DISCOUNT 3,000
CREDIT ACCTS RECBLE 150,000

B 1

B 1

B 1

B 1

C 1

C 1

C 1

5000 Net Sales of 20% Discount = 80%

A 2 0.8
6250 100% Gross Sales
50 0.2
1250 Sales Discount
5000 Net Sales