Question

Company A sells blankets. The following transactions occurred during March:

Mar 3: Placed an order on credit with the blanket supplier for 100 blankets at a price of $70 each.

Mar 7: Hired a new employee. The employee will earn $80,000 per year plus benefits.

Mar 17: Received the order placed on March 3. No payment is yet made to the supplier.

Mar 25: Sold 60 of the blankets purchased on March 3. The sale was on credit.

Mar 28: Received half of the payment for the March 25 sale.

Assuming that there was no inventory in stock prior to March, what is the inventory balance on March 31?

Select one:

a. $7,000

b. $6,000

c. It cannot be determined because the question does not specify which inventory valuation method the company uses

d. None of the above

The journal entries for March 25 include a credit of $4,200 to which account?

Select one:

a. accounts payable

b. cost of goods sold

c. inventory

d. sales revenue

There were five events in the month of March. How many of them do not require a journal entry to be made?

Select one:

a. One

b. Two

c. Three

d. Four

Answer 1

1.The inventory balance on march 31 = 40 x 70 = $2,800

So, the answer is d.None of the above.

2.The journal entries for March 25 include a credit of $4,200 to "inventory account". This is because at the time of sale the cost of goods is transferred by debiting cost of goods sold and crediting inventory.

So, the answer is c.inventory

3."Two" of them do not require a journal entry because they are not business transactions as they don't affect the results and financial position of business.

So, the answer is b.Two