Name
Financial Accounting Instructor
Kimmel, Weygandt, & Kieso Section # Date

|Part |I |II |III |IV |V |Total |
|Points |45 |25 |12 |10 |8 |100 |
|Score | | | | | | |

PART I — MULTIPLE CHOICE (45 points)

Instructions
Designate the best answer for each of the following questions.

____ 1. When a customer returns goods for credit, the seller should a. credit Accounts Payable. b. credit Accounts Payable. c. debit Accounts Receivable. d. credit Merchandise Inventory

____ 2. Credit terms of 3/10, n/30 mean that a(n) a. 10% cash discount may be taken if payment is made immediately; a 3% discount if paid within 30 days. b. 3% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due within 30 days. c. 3% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due at the end of the month. d. additional amount equal to 3% of the invoice price must be paid if payment is not received within 10 days; the account is overdue after 30 days.

____ 3. A periodic inventory system a. allows for the determination of cost of goods sold after each sale. b. requires a physical inventory count to determine the cost of goods on hand. c. requires that detailed inventory records be kept. d. requires the use of a cost of goods sold account.

____ 4. In accordance with the revenue recognition principle, sales revenues are recorded when a. earned, which typically occurs when the goods are transferred