Question 1

In a periodic inventory system, Purchases is a temporary account.

Accepted Answer

A) True 
 B)False

Question 2

Marshalls Retailing now carries the Fabletics yoga pants line of athletic wear. Marshalls needs to ensure that the new line contributes no less to their profit than other clothing lines it carries. The Fabletics line needs to provide a 48.5% gross profit margin percentage. Marshalls buys the Fabletics yoga pants at a cost of $12 per pair. At what price should Marshalls sell the Fabletics Yoga pants?

Accepted Answer

A)  $17.82 
B)  $23.30 
C)  $18.18 
D)  $6.18 
E)  None of these answers is correct. 
A)  $17.82 
B)  $23.30 
C)  $18.18 
D)  $6.18 
E)  None of these answers is correct.

Question 3

Z-Mart had sales of $572,300. Gross profit was $239,106. What is the cost of goods sold?

Accepted Answer

A)  $279,194 
B)  $333,194 
C)  $360,194 
D)  $811,406 
E)  $40,088 
A)  $279,194 
B)  $333,194 
C)  $360,194 
D)  $811,406 
E)  $40,088

Question 4

Y-Mart had net sales of $645,000. Its cost of goods was $445,000. Its gross margin was $200,000.

Accepted Answer

A) True 
 B)False

Question 5

In a periodic inventory system, cost of goods sold is not recorded as each sale occurs.

Accepted Answer

A) True 
 B)False

Question 6

A business sold some inventory on credit for $5,000 before taxes. The sale is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST). The business uses a perpetual inventory system. What is the amount that will be recorded in the GST payable account as a result of this sale?

Accepted Answer

A)  $250 debit 
B)  $250 credit 
C)  $350 debit 
D)  $350 credit 
E)  None of these answers is correct. 
A)  $250 debit 
B)  $250 credit 
C)  $350 debit 
D)  $350 credit 
E)  None of these answers is correct.

Question 7

The agreed cost of an item to be purchased by a business on credit is $4,000. The applicable cost will be debited to advertising expense. The item is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST). When this transaction is recorded, what amount will be recorded as GST Receivable?

Accepted Answer

A)  $200 debit 
B)  $200 credit 
C)  $240 debit 
D)  $240 credit 
E)  None of these answers is correct. 
A)  $200 debit 
B)  $200 credit 
C)  $240 debit 
D)  $240 credit 
E)  None of these answers is correct.

Question 8

To calculate the total cost of a merchandise purchase, the invoice account must be adjusted for which of the following?

Accepted Answer

A)  Any discounts given to a purchaser by a supplier 
B)  Any returns and allowances received from a supplier 
C)  Any freight costs paid by a purchaser 
D)  Any taxes or other costs necessary to make the goods ready for sale 
E)  All of the above 
A)  Any discounts given to a purchaser by a supplier 
B)  Any returns and allowances received from a supplier 
C)  Any freight costs paid by a purchaser 
D)  Any taxes or other costs necessary to make the goods ready for sale 
E)  All of the above

Question 9

Businesses normally get a full credit for the provincial sales tax (PST) they have paid.

Accepted Answer

A) True 
 B)False

Question 10

The agreed cost of an item to be purchased by a business on credit is $4,000. The applicable cost will be debited to advertising expense. The item is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST). When this transaction is recorded, what amount will be credited to accounts payable?

Accepted Answer

A)  $4,000 
B)  $4,200 
C)  $4,240 
D)  $4,480 
E)  None of these answers is correct. 
A)  $4,000 
B)  $4,200 
C)  $4,240 
D)  $4,480 
E)  None of these answers is correct.

Question 11

Some businesses use only one account to keep track of the amount of goods and services tax (GST) and/or Harmonized Sales Tax (HST) owed or owing.

Accepted Answer

A) True 
 B)False

Question 12

An income statement on which the cost of goods sold, and operating expenses are added together and subtracted from net sales in one step to get profit is a(n)

Accepted Answer

A)  Balanced income statement 
B)  Single-step income statement 
C)  Multiple-step income statement 
D)  Merchandise income statement 
E)  Unclassified income statement 
A)  Balanced income statement 
B)  Single-step income statement 
C)  Multiple-step income statement 
D)  Merchandise income statement 
E)  Unclassified income statement

Question 13

Explain inventory shrinkage.

Accepted Answer

Shrinkage is the los

Question 14

2/10, n/30 is interpreted as

Accepted Answer

A)  2% cash discount if the whole amount is paid within 10 days, the balance is due in 30 days 
B)  10% cash discount if the whole amount is paid within 2 days, the balance is due in 30 days 
C)  30% discount if paid within 2 days 
D)  30% discount if paid within 10 days 
E)  2% discount if paid within 30 days 
A)  2% cash discount if the whole amount is paid within 10 days, the balance is due in 30 days 
B)  10% cash discount if the whole amount is paid within 2 days, the balance is due in 30 days 
C)  30% discount if paid within 2 days 
D)  30% discount if paid within 10 days 
E)  2% discount if paid within 30 days

Question 15

The following information is available for Marshals for the year ended March 31, 2020:
   Prepare a multiple-step income statement in good form for Marshals.

Accepted Answer

The answer of The following information is available for Marshals...

Question 16

Sales of $350,000 and net sales of $323,000 may reflect sales discounts of $27,000.

Accepted Answer

A) True 
 B)False

Question 17

Sales returns

Accepted Answer

A)  Refer to merchandise that customers return to the seller after the sale 
B)  Refer to reductions in the selling price of merchandise sold to customers 
C)  Represent cash discounts 
D)  Represent trade discounts 
E)  Are related to purchase discounts 
A)  Refer to merchandise that customers return to the seller after the sale 
B)  Refer to reductions in the selling price of merchandise sold to customers 
C)  Represent cash discounts 
D)  Represent trade discounts 
E)  Are related to purchase discounts

Question 18

Describe the attributes of inventory as an asset of a merchandising company.

Accepted Answer

Merchandise inventor

Question 19

A debit to Sales Returns and Allowances and a credit to Accounts Receivable

Accepted Answer

A)  Is not possible; it should be a credit to Sales Returns and Allowances and a debit to Accounts Receivable 
B)  Recognizes that a customer returned merchandise 
C)  Requires a debit memorandum to recognize the customer's return 
D)  Recognizes a cash discount taken by a customer 
E)  All of the above 
A)  Is not possible; it should be a credit to Sales Returns and Allowances and a debit to Accounts Receivable 
B)  Recognizes that a customer returned merchandise 
C)  Requires a debit memorandum to recognize the customer's return 
D)  Recognizes a cash discount taken by a customer 
E)  All of the above

Question 20

A retailer is a middleman that buys products from manufacturers and sells them to wholesalers.

Accepted Answer

A) True 
 B)False

In a periodic inventory system, Purchases is a temporary account.

Z-Mart had sales of $572,300. Gross profit was $239,106. What is the cost of goods sold?

Y-Mart had net sales of $645,000. Its cost of goods was $445,000. Its gross margin was $200,000.

In a periodic inventory system, cost of goods sold is not recorded as each sale occurs.

A business sold some inventory on credit for $5,000 before taxes. The sale is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST). The business uses a perpetual inventory system. What is the amount that will be recorded in the GST payable account as a result of this sale?

To calculate the total cost of a merchandise purchase, the invoice account must be adjusted for which of the following?

Businesses normally get a full credit for the provincial sales tax (PST) they have paid.

Some businesses use only one account to keep track of the amount of goods and services tax (GST) and/or Harmonized Sales Tax (HST) owed or owing.

An income statement on which the cost of goods sold, and operating expenses are added together and subtracted from net sales in one step to get profit is a(n)

Explain inventory shrinkage.

2/10, n/30 is interpreted as

The following information is available for Marshals for the year ended March 31, 2020: Prepare a multiple-step income statement in good form for Marshals.

Sales of $350,000 and net sales of $323,000 may reflect sales discounts of $27,000.

Sales returns

Describe the attributes of inventory as an asset of a merchandising company.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable

A retailer is a middleman that buys products from manufacturers and sells them to wholesalers.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters

Exam 5: Accounting for Merchandising Activities

In a periodic inventory system, Purchases is a temporary account.

Z-Mart had sales of $572,300. Gross profit was $239,106. What is the cost of goods sold?

Y-Mart had net sales of $645,000. Its cost of goods was $445,000. Its gross margin was $200,000.

In a periodic inventory system, cost of goods sold is not recorded as each sale occurs.

A business sold some inventory on credit for $5,000 before taxes. The sale is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST). The business uses a perpetual inventory system. What is the amount that will be recorded in the GST payable account as a result of this sale?

To calculate the total cost of a merchandise purchase, the invoice account must be adjusted for which of the following?

Businesses normally get a full credit for the provincial sales tax (PST) they have paid.

Some businesses use only one account to keep track of the amount of goods and services tax (GST) and/or Harmonized Sales Tax (HST) owed or owing.

An income statement on which the cost of goods sold, and operating expenses are added together and subtracted from net sales in one step to get profit is a(n)

Explain inventory shrinkage.

2/10, n/30 is interpreted as

The following information is available for Marshals for the year ended March 31, 2020: Prepare a multiple-step income statement in good form for Marshals.

Sales of $350,000 and net sales of $323,000 may reflect sales discounts of $27,000.

Sales returns

Describe the attributes of inventory as an asset of a merchandising company.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable

A retailer is a middleman that buys products from manufacturers and sells them to wholesalers.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters