The Following Information Was Derived from the 2020 Accounting Records

question 26

Multiple Choice

The following information was derived from the 2020 accounting records of Jersey Co.: $\begin{array}{c}\begin{array}{lll}\\\\ \text {Beginning inventory}\\ \text {Purchases}\\ \text {Freight-in}\\ \text {Transportation to consignees}\\ \text {Freight-out}\\ \text {Ending inventory}\end{array}\begin{array}{c} \text {Jersey's Central Warehouse}\\\$ 260,000 \\475,000 \\15,000 \\\\25,000 \\290,000\end{array}\begin{array}{lll} \text {Jersey's Goods}\\ \text {held by consignee}\\\$ 28,000 \\90,000\\\\5,000\\8,000\\20,000\end{array}\end{array}$
Jersey's 2020 cost of sales was

• A) $563,000.
• B) $558,000.
• C) $488,000.
• D) $460,000.

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Definitions:

NSF

An acronym for "Non-Sufficient Funds," indicating that an account does not have enough money to cover a presented check or withdrawal.

Cash Management

The process of collecting, managing, and investing a company's cash flows in a way that maximizes liquidity and profitability.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell it, and convert the sale into cash through customer payments.

Bank Overdraft

A facility allowing a bank account holder to withdraw more money than is actually available in their account, typically subject to interest charges.