Question 1

The collection of a $1,000 account after the 2 percent discount period will result in a

Accepted Answer

A)  debit to Cash for $980. 
B)  credit to Accounts Receivable for $1,000. 
C)  credit to Cash for $1,000. 
D)  debit to Sales Discounts for $20. 
A)  debit to Cash for $980. 
B)  credit to Accounts Receivable for $1,000. 
C)  credit to Cash for $1,000. 
D)  debit to Sales Discounts for $20. B

Question 2

Goldblum Company has the following account balances: $$\begin{array} { l r } 
\text { Purchases } & \$ 96,000 \
\text { Sales Returns and Allowances } & 12,800 \
\text { Purchase Discounts } & 8,000 \
\text { Freight-In } & 6,000 \
\text { Delivery Expense } & 10,000
\end{array}$$ The cost of goods purchased for the period is

Accepted Answer

A)  $80,800. 
B)  $88,000. 
C)  $94,000. 
D)  $104,000. 
A)  $80,800. 
B)  $88,000. 
C)  $94,000. 
D)  $104,000. C

Question 3

A sales invoice is a source document that

Accepted Answer

A)  provides support for goods purchased for resale. 
B)  provides evidence of incurred operating expenses. 
C)  provides evidence of credit sales. 
D)  serves only as a customer receipt. 
A)  provides support for goods purchased for resale. 
B)  provides evidence of incurred operating expenses. 
C)  provides evidence of credit sales. 
D)  serves only as a customer receipt. C

Question 4

Conrad Company reported the following balances at June 30, 2018:   Net sales for the month is

Accepted Answer

A)  $7,800 
B)  $15,300. 
C)  $15,600. 
D)  $16,200. 
A)  $7,800 
B)  $15,300. 
C)  $15,600. 
D)  $16,200.

Question 5

Gross profit is obtained by subtracting ________________ from ________________.

Accepted Answer

cost of go

Question 6

If a company has net sales of $700,000 and cost of goods sold of $455,000, the gross profit percentage is

Accepted Answer

A)  25%. 
B)  35%. 
C)  65%. 
D)  100%. 
A)  25%. 
B)  35%. 
C)  65%. 
D)  100%.

Question 7

A merchandising company has different types of adjusting entries than a service company.

Accepted Answer

A) True 
 B)False

Question 8

Charlie Company uses a perpetual inventory system. During May, the following transactions and events occurred.
May 13 Sold 8 motors at a cost of $45 each to Scruffy Brothers Supply Company, terms 4/10, n/30. The motors cost Charlie $26 each.
May 16 One defective motor was returned to Charlie.
May 23 Received payment in full from Scruffy Brothers. Round to nearest dollar.
Instructions
Journalize the May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system. You may omit explanations. Round amounts to nearest dollar.

Accepted Answer

The answer of Charlie Company uses a perpetual inventory system....

Question 9

When goods are returned that relate to a prior cash sale,

Accepted Answer

A)  the Sales Returns and Allowances account should not be used. 
B)  the cash account will be credited. 
C)  Sales Returns and Allowances will be credited. 
D)  Accounts Receivable will be credited. 
A)  the Sales Returns and Allowances account should not be used. 
B)  the cash account will be credited. 
C)  Sales Returns and Allowances will be credited. 
D)  Accounts Receivable will be credited.

Question 10

The income statement of Jue's Luggage includes the items listed below:   Instructions
Use the appropriate items listed above as a basis for determining:
(a) Cost of goods sold.
(b) Cost of goods available for sale.
(c) Ending inventory.

Accepted Answer

The answer of The income statement of Jue's Luggage includes...

Question 11

A credit sale of $3,600 is made on July 15, terms 2/10, n/30, on which a return of $200 is granted on July 18. What amount is received as payment in full on July 24?

Accepted Answer

A)  $3,332 
B)  $3,440 
C)  $3,528 d $3,600 
A)  $3,332 
B)  $3,440 
C)  $3,528 d $3,600

Question 12

Distinguish between FOB shipping point and FOB destination. Identify the freight terms that will result in a debit to Inventory by the purchaser and a debit to Freight-out by the seller.

Accepted Answer

The letters FOB mean Free on Board. FOB

Question 13

Inventory is classified as a current asset in a classified balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

Sam Wainwright is a new accountant with Ground Floor Company. Ground Floor purchased merchandise on account for $18,000. The credit terms are 1/10, n/30. Sam has talked with the company's banker and knows that he could earn 4% on any money invested in the company's savings account.
Instructions
(a) Should Sam pay the invoice within the discount period or should he keep the $18,000 in the money market account and pay at the end of the credit period? Support your recommendation with a calculation showing which action would be best.
(b) If Sam forgoes the discount, it may be viewed as paying an interest rate of 1% for the use of $18,000 for 20 days. Calculate the annual rate of interest that this is equivalent to.

Accepted Answer

Dan should pay the i

Question 15

Income from operations will always result if

Accepted Answer

A)  the cost of goods sold exceeds operating expenses. 
B)  revenues exceed cost of goods sold. 
C)  revenues exceed operating expenses. 
D)  gross profit exceeds operating expenses. 
A)  the cost of goods sold exceeds operating expenses. 
B)  revenues exceed cost of goods sold. 
C)  revenues exceed operating expenses. 
D)  gross profit exceeds operating expenses.

Question 16

154. Net purchases plus freight-in determines

Accepted Answer

A)  cost of goods sold. 
B)  cost of goods available for sale. 
C)  cost of goods purchased. 
D)  total goods available for sale. 
A)  cost of goods sold. 
B)  cost of goods available for sale. 
C)  cost of goods purchased. 
D)  total goods available for sale.

Question 17

Two categories of expenses for merchandising companies are

Accepted Answer

A)  cost of goods sold and financing expenses. 
B)  operating expenses and financing expenses. 
C)  cost of goods sold and operating expenses. 
D)  sales and cost of goods sold. 
A)  cost of goods sold and financing expenses. 
B)  operating expenses and financing expenses. 
C)  cost of goods sold and operating expenses. 
D)  sales and cost of goods sold.

Question 18

Costner's Market recorded the following events involving a recent purchase of merchandise: Received goods for $40,000, terms 2/10, n/30.
Returned $800 of the shipment for credit.
Paid $200 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company's inventory

Accepted Answer

A)  increased by $38,416. 
B)  increased by $38,612. 
C)  increased by $38,616. 
D)  increased by $39,400. 
A)  increased by $38,416. 
B)  increased by $38,612. 
C)  increased by $38,616. 
D)  increased by $39,400.

Question 19

Cleese Company sells merchandise on account for $5,000 to Langston Company with credit terms of 2/10, n/30. Langston Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

Accepted Answer

A)  $3,920 
B)  $4,000 
C)  $4,900 
D)  $4,920 
A)  $3,920 
B)  $4,000 
C)  $4,900 
D)  $4,920

Question 20

Under IFRS, income statement items are generally described as

Accepted Answer

A)  administration, distribution, manufacturing, etc. 
B)  salaries, depreciation, utilities, etc. 
C)  administration, depreciation, manufacturing, etc. 
D)  salaries, distribution, utilities, etc.
IFRS. 
A)  administration, distribution, manufacturing, etc. 
B)  salaries, depreciation, utilities, etc. 
C)  administration, depreciation, manufacturing, etc. 
D)  salaries, distribution, utilities, etc.
IFRS.

The collection of a $1,000 account after the 2 percent discount period will result in a

Goldblum Company has the following account balances: Purchases \ 96,000 Sales Returns and Allowances 12,800 Purchase Discounts 8,000 Freight-In 6,000 Delivery Expense 10,000 The cost of goods purchased for the period is

A sales invoice is a source document that

Conrad Company reported the following balances at June 30, 2018: Net sales for the month is

Gross profit is obtained by subtracting from .

If a company has net sales of $700,000 and cost of goods sold of $455,000, the gross profit percentage is

A merchandising company has different types of adjusting entries than a service company.

When goods are returned that relate to a prior cash sale,

The income statement of Jue's Luggage includes the items listed below: Instructions Use the appropriate items listed above as a basis for determining: (a) Cost of goods sold. (b) Cost of goods available for sale. (c) Ending inventory.

A credit sale of $3,600 is made on July 15, terms 2/10, n/30, on which a return of $200 is granted on July 18. What amount is received as payment in full on July 24?

Distinguish between FOB shipping point and FOB destination. Identify the freight terms that will result in a debit to Inventory by the purchaser and a debit to Freight-out by the seller.

Inventory is classified as a current asset in a classified balance sheet.

Income from operations will always result if

154. Net purchases plus freight-in determines

Two categories of expenses for merchandising companies are

Cleese Company sells merchandise on account for $5,000 to Langston Company with credit terms of 2/10, n/30. Langston Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

Under IFRS, income statement items are generally described as

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 5: Accounting for Merchandising Operations

The collection of a $1,000 account after the 2 percent discount period will result in a

Goldblum Company has the following account balances: Purchases \ 96,000 Sales Returns and Allowances 12,800 Purchase Discounts 8,000 Freight-In 6,000 Delivery Expense 10,000 The cost of goods purchased for the period is

A sales invoice is a source document that

Conrad Company reported the following balances at June 30, 2018: Net sales for the month is

Gross profit is obtained by subtracting ________________ from ________________.

If a company has net sales of $700,000 and cost of goods sold of $455,000, the gross profit percentage is

A merchandising company has different types of adjusting entries than a service company.

When goods are returned that relate to a prior cash sale,

The income statement of Jue's Luggage includes the items listed below: Instructions Use the appropriate items listed above as a basis for determining: (a) Cost of goods sold. (b) Cost of goods available for sale. (c) Ending inventory.

A credit sale of $3,600 is made on July 15, terms 2/10, n/30, on which a return of $200 is granted on July 18. What amount is received as payment in full on July 24?

Distinguish between FOB shipping point and FOB destination. Identify the freight terms that will result in a debit to Inventory by the purchaser and a debit to Freight-out by the seller.

Inventory is classified as a current asset in a classified balance sheet.

Income from operations will always result if

154. Net purchases plus freight-in determines

Two categories of expenses for merchandising companies are

Cleese Company sells merchandise on account for $5,000 to Langston Company with credit terms of 2/10, n/30. Langston Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

Under IFRS, income statement items are generally described as

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Gross profit is obtained by subtracting from .