Question 1. 1. A bank reconciliation should be prepared periodically because _______. (Points : 2) the depositor’s records and the bank’s records are in agreement the bank has not recorded all of its transactions any differences between the depositor’s records and the bank’s records should be determined, and any errors made by either party should be discovered and corrected the bank must make sure that its records are correct Question 2. 2. A voucher: (Points : 2) Is received from customers to explain the purpose of a payment Is normally prepared in the Accounting Department System is used to control cash receipts System is an internal control procedure to verify that the assets in the records are the ones the company owns. Question 3. 3. A credit memorandum from the bank _______. (Points : 2) decreases a bank customer’s account Is used to show a bank service charge shows that a company has deposited a customer’s NSF check shows the bank has collected a note receivable for the customer Question 4. 4. Merchandise subject to terms 1/10, n/30, FOB shipping point, is sold on account to a customer for $17,500. The seller issued a credit memorandum for $4,000 prior to payment. What is the amount of the cash discount allowable? (Points : 2) $215 $175 $135 $140 Question 5. 5. A Multiple-step income statements show: (Points : 2) gross profit but not income from operations neither gross profit nor income from operations both gross profit and income from operations income from operations but not gross profit Question 6. 6. Which of the following would be added to the balance per books on a bank reconciliation? (Points : 2) Service charges Outstanding checks Deposits in transit Notes collected by the bank Question 7. 7. Since merchandise inventory is normally sold within a year, how is it reported on the balance sheet? (Points : 2) As a revenue As the cost of merchandise sold It does not appear on the Balance Sheet As a current asset Question 8. 8. The credit terms of a sale are normally indicated on a(n) (Points : 2) purchase order invoice bill of lading account receivable Question 9. 9. Using a perpetual inventory system, the purchase of $30,000 of merchandise on account would include a(n) (Points : 2) increase in Sales increase in Merchandise Inventory decrease in Merchandise Inventory decrease in Sales Question 10. 10. Generally, the revenue account for a merchandising business is entitled (Points : 2) Sales Net Sales Gross Sales Gross Profit Question 11. 11. When merchandise is purchased to resell to customers, it is recorded in the account entitled (Points : 2) Supplies Cost of Goods Sold Merchandise Inventory Sales Question 12. 12. If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are (Points : 2) n/30 FOB shipping point FOB destination consigned Question 13. 13. Which of the following would be deducted from the balance per books on a bank reconciliation? (Points : 2) Service charges Outstanding checks Deposits in transit Notes collected by the bank Question 14. 14. The amount of deposits in transit is included on the bank statement as a (n) _______. (Points : 2) deduction from the balance per the depositor’s books deduction from the balance per bank statement addition to the balance per bank statement addition to the balance per depositor books Question 15. 15. Merchandise with an invoice price of $6,000 is purchased subject to terms of 2/10, n/30, FOB destination. Transportation costs paid by the seller totaled $125. What is the net cost of the merchandise? (Points : 2) $6,125 $6,005 $5,880 $5,755 Question 16. 16. Which expenses are subtracted from gross profit to arrive at income from operations? (Points : 2) All expenses Cost of merchandise sold Operating expenses Sales expenses Question 17. 17. EFT: (Points : 2) Means Efficient Funds Transfer Can process certain cash transactions at less cost than by using the mail Makes it easier to document purchase and sale transacti