5. Advent Company purchased $6,500 of merchandise inventory on account. Advent uses the perpetual inventory method. Which of the following entries would be required to record this transaction?
Accounts Payable
6,500
Purchases
6,500
Inventory
6,500
Accounts Payable
6,500
Cost of Goods Sold
6,500
Accounts Payable
6,500
Accounts Payable
6,500
Inventory
6,500
7.
A company using the perpetual inventory method paid cash for freight costs to purchase merchandise. Which of the following answers reflects the effects of this event on the financial statements?
Assets
=
Liab.
+
Equity
Rev.
Exp.
=
Net Inc.
Cash Flow
A.
-
=
NA
+
-
NA
NA
=
NA
- OA
B.
+ -
=
NA
+
NA
NA
NA
=
NA
- OA
C.
+ -
=
NA
+
NA
NA
NA
=
NA
NA
D.
+ -
=
NA
+
NA
NA
+
=
-
- OA
Option A
Option B
Option C
Option D
8.
Use the following account numbers and corresponding account titles to answer the questions displayed below.
Account No.
Account Title
1
Cash
2
Merchandise inventory
3
Cost of goods sold
4
Transportation-out
5
Dividends
6
Common stock
7
Selling expense
8
Loss on the sale of land
9
Sales
A.
Which accounts would appear on the income statement?
Account numbers 3, 4, 7, 8, and 9.
Account numbers 3, 4, 5, 7, and 9.
Account numbers 2, 3, 7, 8, and 9.
Account numbers 3, 5, 7, and 8.
B.
Which accounts would appear on the balance sheet?
Account numbers 1, 2, 4, and 5.
Account numbers 1, 3, 7, and 8.
Account numbers 1, 2, and 6.
Account numbers 3, 4, 8, and 9.
C.
Which accounts would affect gross margin?
Account numbers 2 and 9.
Account numbers 3 and 9.
Account numbers 3, 4, 7, and 9.
Account numbers 3, 7, 8 and 9.
D.
Which accounts would affect operating income?
Account numbers 2, 4, and 9.
Account numbers 3, 5, 7, and 9.
Account numbers 3, 4, 7, and 9.
Account numbers 3, 4, 7, 8 and 9.
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