Question 1

Z-Mart had sales of $500,100. Cost of goods sold was $143,400. What is the gross profit?

Accepted Answer

A)  $216,600 
B)  $217,100 
C)  $356,700 
D)  $503,900 
E)  $213,300 
A)  $216,600 
B)  $217,100 
C)  $356,700 
D)  $503,900 
E)  $213,300

Question 2

Merchandise inventory includes merchandise and office supplies.

Accepted Answer

A) True 
 B)False

Question 3

A service company earns profit by buying and selling merchandise.

Accepted Answer

A) True 
 B)False

Question 4

On April 4, Fignola Company (FC) sold sweaters to one of its customers for $65,000 on credit terms of 3/15, net 30. On April 8, the customer contacted FC to say that the sweater colours did not match their original order. FC reached an agreement with the customer to keep the shipment and FC granted the customer a price reduction of $3,000. The customer paid the outstanding bill on April 15. The journal entry to be made by FC on April 15 is

Accepted Answer

A)  Debit Sales Returns and Allowances $3,000; Credit Accounts Receivable $3,000 
B)  Debit Accounts Receivable $62,000; Credit Sales Revenue $62,000 
C)  Debit Cash $62,000; Credit Accounts Receivable $62,000 
D)  Debit Cash $60,140; Debit Sales Discounts $1,860; Credit Accounts Receivable $62,000 
E)  Debit Cash $62,000; Debit Sales Discounts $1,860; Credit Accounts Receivable $55,290 
A)  Debit Sales Returns and Allowances $3,000; Credit Accounts Receivable $3,000 
B)  Debit Accounts Receivable $62,000; Credit Sales Revenue $62,000 
C)  Debit Cash $62,000; Credit Accounts Receivable $62,000 
D)  Debit Cash $60,140; Debit Sales Discounts $1,860; Credit Accounts Receivable $62,000 
E)  Debit Cash $62,000; Debit Sales Discounts $1,860; Credit Accounts Receivable $55,290

Question 5

Shrinkage

Accepted Answer

A)  Refers to the loss of inventory for merchandising companies 
B)  Is not able to be directly measured by a perpetual inventory system 
C)  Is recognized by debiting Cost of Goods Sold 
D)  Can arise because of theft and deterioration of merchandise 
E)  All of the above 
A)  Refers to the loss of inventory for merchandising companies 
B)  Is not able to be directly measured by a perpetual inventory system 
C)  Is recognized by debiting Cost of Goods Sold 
D)  Can arise because of theft and deterioration of merchandise 
E)  All of the above

Question 6

Y-Mart had sales of $350,000. Its cost of goods sold was $200,000. Its gross profit was $550,000.

Accepted Answer

A) True 
 B)False

Question 7

The adjustment to reflect shrinkage is a debit to Income Summary and a credit to Shrinkage Expense.

Accepted Answer

A) True 
 B)False

Question 8

Merchandising sales and costs reported on the income statement usually differ from cash receipts and payments for the period.

Accepted Answer

A) True 
 B)False

Question 9

A merchandising company

Accepted Answer

A)  Earns profit from buying and selling merchandise 
B)  Buys products from manufacturers and sells to retailer 
C)  Buys products from manufacturers and sells them to consumers 
D)  Reports cost of goods sold on the income statement 
E)  All of the above 
A)  Earns profit from buying and selling merchandise 
B)  Buys products from manufacturers and sells to retailer 
C)  Buys products from manufacturers and sells them to consumers 
D)  Reports cost of goods sold on the income statement 
E)  All of the above

Question 10

A car dealership has a used truck on its lot that it bought for $10,000 and is selling it for $20,000. The rate of markup on cost is

Accepted Answer

A)  20% 
B)  30% 
C)  50% 
D)  100% 
E)  None of these answers is correct. 
A)  20% 
B)  30% 
C)  50% 
D)  100% 
E)  None of these answers is correct.

Question 11

The partially completed income statements for Marshal Advertising Co follow:
  
-a) Calculate the value for each missing item.

Accepted Answer

The answer of The partially completed income statements for Marshal...

Question 12

A perpetual inventory system is able to directly measure shrinkage.

Accepted Answer

A) True 
 B)False

Question 13

MicroAge sells cellphones at a selling price that includes a 65% markup on cost. If a cellphone costs MicroAge $300, its selling price is

Accepted Answer

A)  $495.00 
B)  $391.50 
C)  $214.81 
D)  $461.54 
E)  None of these answers is correct. 
A)  $495.00 
B)  $391.50 
C)  $214.81 
D)  $461.54 
E)  None of these answers is correct.

Question 14

Describe the difference between wholesalers and retailers.

Accepted Answer

A wholesaler is a middleman who buys pro

Question 15

Accounts and their balances from the trial balance of Blade Runner Store for the year ended December 31, 2020 are below.
  
-Use the information above to prepare a multi-step income statement for the year ended December 31, 2020

Accepted Answer

The answer of Accounts and their balances from the trial...

Question 16

Discuss the difference between the periodic and perpetual inventory systems.

Accepted Answer

Under the periodic system the cost of in

Question 17

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

Accepted Answer

A) True 
 B)False

Question 18

FOB shipping or FOB factory means ownership of goods transfers to the buyer at the buyer's place of business.

Accepted Answer

A) True 
 B)False

Question 19

Describe the periodic and perpetual inventory systems.

Accepted Answer

A periodic inventory system provides for

Question 20

Maeve's Store had the following transactions during December, the last month of the accounting period:
   Prepare general journal entries to record these transactions, using a perpetual inventory system.

Accepted Answer

The answer of Maeve's Store had the following transactions during...

Z-Mart had sales of $500,100. Cost of goods sold was $143,400. What is the gross profit?

Merchandise inventory includes merchandise and office supplies.

A service company earns profit by buying and selling merchandise.

Shrinkage

Y-Mart had sales of $350,000. Its cost of goods sold was $200,000. Its gross profit was $550,000.

The adjustment to reflect shrinkage is a debit to Income Summary and a credit to Shrinkage Expense.

Merchandising sales and costs reported on the income statement usually differ from cash receipts and payments for the period.

A merchandising company

A car dealership has a used truck on its lot that it bought for $10,000 and is selling it for $20,000. The rate of markup on cost is

The partially completed income statements for Marshal Advertising Co follow: -a) Calculate the value for each missing item.

A perpetual inventory system is able to directly measure shrinkage.

MicroAge sells cellphones at a selling price that includes a 65% markup on cost. If a cellphone costs MicroAge $300, its selling price is

Describe the difference between wholesalers and retailers.

Accounts and their balances from the trial balance of Blade Runner Store for the year ended December 31, 2020 are below. -Use the information above to prepare a multi-step income statement for the year ended December 31, 2020

Discuss the difference between the periodic and perpetual inventory systems.

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

FOB shipping or FOB factory means ownership of goods transfers to the buyer at the buyer's place of business.

Describe the periodic and perpetual inventory systems.

Maeve's Store had the following transactions during December, the last month of the accounting period: Prepare general journal entries to record these transactions, using a perpetual inventory system.

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

Z-Mart had sales of $500,100. Cost of goods sold was $143,400. What is the gross profit?

Merchandise inventory includes merchandise and office supplies.

A service company earns profit by buying and selling merchandise.

Shrinkage

Y-Mart had sales of $350,000. Its cost of goods sold was $200,000. Its gross profit was $550,000.

The adjustment to reflect shrinkage is a debit to Income Summary and a credit to Shrinkage Expense.

Merchandising sales and costs reported on the income statement usually differ from cash receipts and payments for the period.

A merchandising company

A car dealership has a used truck on its lot that it bought for $10,000 and is selling it for $20,000. The rate of markup on cost is

The partially completed income statements for Marshal Advertising Co follow: -a) Calculate the value for each missing item.

A perpetual inventory system is able to directly measure shrinkage.

MicroAge sells cellphones at a selling price that includes a 65% markup on cost. If a cellphone costs MicroAge $300, its selling price is

Describe the difference between wholesalers and retailers.

Accounts and their balances from the trial balance of Blade Runner Store for the year ended December 31, 2020 are below. -Use the information above to prepare a multi-step income statement for the year ended December 31, 2020

Discuss the difference between the periodic and perpetual inventory systems.

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

FOB shipping or FOB factory means ownership of goods transfers to the buyer at the buyer's place of business.

Describe the periodic and perpetual inventory systems.

Maeve's Store had the following transactions during December, the last month of the accounting period: Prepare general journal entries to record these transactions, using a perpetual inventory system.

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