Question

What is the effect of this entry on the accounting equation?

Cost of Goods Sold	$6,000
Inventory		$6,000

Select one:

a. Assets and Stockholders' Equity will decrease

b. Assets will decrease and Stockholders' Equity will increase

c. Assets and Stockholders' Equity will increase

d. None of the above

Question 2

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Cars Unlimited buys and sells used cars. Last week they sold a set of office furniture that cost $2000 for $500 cash. Which of the following entries would be part of this transaction?

Select one:

a. Debit to Loss for $1,500

b. Debit to Cost of Goods Sold for $2,000

c. Credit to Loss for $1,500

d. Credit to Cost of Goods Sold for $1,500

Question 3

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A company has the following inventory-related information at the end of 2015:

Item	Quantity	Unit Cost	Market Value
A	50	$14	$12
B	20	$22	$17
C	35	$32	$26
D	10	$16	$18

Apply the lower-of-cost-or-market rule to the aggregate inventory and determine the ending inventory value after the adjustment, if any?

Select one:

a. $2,420

b. $2,030

c. $2,010

d. None of the above

Question 4

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A company has the following inventory-related information at the end of 2015:

Item	Quantity	Unit Cost	Market Value
A	50	$14	$12
B	20	$22	$17
C	35	$32	$26
D	10	$16	$18

Apply the lower-of-cost-or-market rule to each individual item in inventory and determine the ending inventory value after the adjustment, if any?

Select one:

a. $2,420

b. $2,030

c. $2,010

d. None of the above

Question 5

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How does a purchase discount taken impact a company's financial statements?

Select one:

a. Reduces total Inventory

b. Reduces total Revenue

c. Increase total Inventory

d. No Impact

Answer 1