Question 1

Cost of goods sold is deducted from net sales revenue for the period in order to arrive at ________________.

Accepted Answer

The answer of Cost of goods sold is deducted from...

Question 2

A credit granted to a customer for returned goods requires a debit to

Accepted Answer

A)  Sales Revenue and a credit to Cash. 
B)  Sales Returns and Allowances and a credit to Accounts Receivable. 
C)  Accounts Receivable and a credit to a contra-revenue account. 
D)  Cash and a credit to Sales Returns and Allowances. 
A)  Sales Revenue and a credit to Cash. 
B)  Sales Returns and Allowances and a credit to Accounts Receivable. 
C)  Accounts Receivable and a credit to a contra-revenue account. 
D)  Cash and a credit to Sales Returns and Allowances.

Question 3

Financial information is presented below: $$\begin{array} { l r } 
\text { Operating Expenses } & \$ 90,000 \
\text { Sales Returns and Allowances } & 18,000 \
\text { Sales Discounts } & 12,000 \
\text { Sales Revenue } & 320,000 \
\text { Cost of Goods Sold } & 174,000
\end{array}$$ Gross profit would be

Accepted Answer

A)  $26,000. 
B)  $116,000. 
C)  $128,000. 
D)  $134,000. 
A)  $26,000. 
B)  $116,000. 
C)  $128,000. 
D)  $134,000.

Question 4

Which of the following is not a true statement about a multiple-step income statement?

Accepted Answer

A)  Operating expenses are similar for merchandising and service enterprises. 
B)  There may be a section for non-operating activities. 
C)  There may be a section for operating assets. 
D)  There is a section for cost of goods sold. 
A)  Operating expenses are similar for merchandising and service enterprises. 
B)  There may be a section for non-operating activities. 
C)  There may be a section for operating assets. 
D)  There is a section for cost of goods sold.

Question 5

In 2018, Rondelli's Company had net sales of $650,000 and cost of goods sold of $455,000. Operating expenses were $150,000, and interest expense was $10,000. Rondelli's prepares a multiple-step income statement.
Instructions
(a) Compute Rondelli's gross profit.
(b) Compute the gross profit rate.
(c) What is Rondelli's income from operations and net income?
(d) If Rondelli's prepared a single-step income statement, what amount would it report for net income?

Accepted Answer

(a) $650000 - $455000 = $195000.
(b) $19

Question 6

Which of the following accounts is not closed to Income Summary?

Accepted Answer

A)  Cost of Goods Sold 
B)  Inventory 
C)  Sales Revenue 
D)  Sales Discounts 
A)  Cost of Goods Sold 
B)  Inventory 
C)  Sales Revenue 
D)  Sales Discounts

Question 7

McKendrick Shoe Store has a beginning inventory of $45,000. During the period, purchases were $195,000; purchase returns, $6,000; and freight-in $15,000. A physical count of inventory at the end of the period revealed that $30,000 was still on hand. The cost of goods available for sale was

Accepted Answer

A)  $189,000. 
B)  $204,000. 
C)  $219,000. 
D)  $249,000. 
A)  $189,000. 
B)  $204,000. 
C)  $219,000. 
D)  $249,000.

Question 8

A periodic inventory system requires a detailed inventory record of inventory items.

Accepted Answer

A) True 
 B)False

Question 9

Sales Returns and Allowances is increased when

Accepted Answer

A)  an employee does a good job. 
B)  goods are sold on credit. 
C)  goods that were sold on credit are returned. 
D)  customers refuse to pay their accounts. 
A)  an employee does a good job. 
B)  goods are sold on credit. 
C)  goods that were sold on credit are returned. 
D)  customers refuse to pay their accounts.

Question 10

Which of the following accounts has a normal credit balance?

Accepted Answer

A)  Sales Returns and Allowances 
B)  Sales Discounts 
C)  Sales Revenue 
D)  Selling Expense 
A)  Sales Returns and Allowances 
B)  Sales Discounts 
C)  Sales Revenue 
D)  Selling Expense

Question 11

A Sales Returns and Allowances account is not debited if a customer

Accepted Answer

A)  returns defective merchandise. 
B)  receives a credit for merchandise of inferior quality. 
C)  utilizes a prompt payment incentive. 
D)  returns goods that are not in accordance with specifications. 
A)  returns defective merchandise. 
B)  receives a credit for merchandise of inferior quality. 
C)  utilizes a prompt payment incentive. 
D)  returns goods that are not in accordance with specifications.

Question 12

Company A sells $2,500 of merchandise on account to Company B with credit terms of 2/10, n/30. If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check?

Accepted Answer

A)  $1,750 
B)  $2,000 
C)  $2,250 
D)  $2,450 
A)  $1,750 
B)  $2,000 
C)  $2,250 
D)  $2,450

Question 13

Gross profit is a measure of the overall profitability of a company.

Accepted Answer

A) True 
 B)False

Question 14

On October 4, 2018, JT Corporation had credit sales transactions of $4,000 from merchandise having cost $2,400. The entries to record the day's credit transactions include a

Accepted Answer

A)  debit of $4,000 to Inventory. 
B)  credit of $4,000 to Sales Revenue. 
C)  debit of $2,400 to Inventory. 
D)  credit of $2,400 to Cost of Goods Sold. 
A)  debit of $4,000 to Inventory. 
B)  credit of $4,000 to Sales Revenue. 
C)  debit of $2,400 to Inventory. 
D)  credit of $2,400 to Cost of Goods Sold.

Question 15

Under a periodic inventory system, acquisition of merchandise is debited to the

Accepted Answer

A)  Inventory account. 
B)  Cost of Goods Sold account. 
C)  Purchases account. 
D)  Accounts Payable account. 
A)  Inventory account. 
B)  Cost of Goods Sold account. 
C)  Purchases account. 
D)  Accounts Payable account.

Question 16

The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are

Accepted Answer

A)  credit, credit, credit. 
B)  debit, credit, debit. 
C)  credit, debit, debit. 
D)  credit, debit, credit. 
A)  credit, credit, credit. 
B)  debit, credit, debit. 
C)  credit, debit, debit. 
D)  credit, debit, credit.

Question 17

The acquisition of inventory is debited to the ____________ account when a perpetual inventory system is used.

Accepted Answer

The answer of The acquisition of inventory is debited to...

Question 18

The Income statement is

Accepted Answer

A)  required under GAAP but not under IFRS. 
B)  required under IFRS in the same format as under GAAP. 
C)  required under IFRS but not under GAAP. 
D)  required under IFRS with some differences as compared to GAAP.
IFRS. 
A)  required under GAAP but not under IFRS. 
B)  required under IFRS in the same format as under GAAP. 
C)  required under IFRS but not under GAAP. 
D)  required under IFRS with some differences as compared to GAAP.
IFRS.

Question 19

A single-step income statement reports all revenues, both operating and other revenues and gains, at the top of the statement.

Accepted Answer

A) True 
 B)False

Question 20

Prepare the necessary journal entries to record the following transactions, assuming a periodic inventory system:
(a) Purchased $450,000 of merchandise on account, terms 2/10, n/30.
(b) Returned $30,000 of damaged merchandise for credit.
(c) Paid for the merchandise purchased within 10 days.

Accepted Answer

The answer of Prepare the necessary journal entries to record...

Cost of goods sold is deducted from net sales revenue for the period in order to arrive at ________________.

A credit granted to a customer for returned goods requires a debit to

Financial information is presented below: Operating Expenses \ 90,000 Sales Returns and Allowances 18,000 Sales Discounts 12,000 Sales Revenue 320,000 Cost of Goods Sold 174,000 Gross profit would be

Which of the following is not a true statement about a multiple-step income statement?

Which of the following accounts is not closed to Income Summary?

McKendrick Shoe Store has a beginning inventory of $45,000. During the period, purchases were $195,000; purchase returns, $6,000; and freight-in $15,000. A physical count of inventory at the end of the period revealed that $30,000 was still on hand. The cost of goods available for sale was

A periodic inventory system requires a detailed inventory record of inventory items.

Sales Returns and Allowances is increased when

Which of the following accounts has a normal credit balance?

A Sales Returns and Allowances account is not debited if a customer

Company A sells $2,500 of merchandise on account to Company B with credit terms of 2/10, n/30. If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check?

Gross profit is a measure of the overall profitability of a company.

On October 4, 2018, JT Corporation had credit sales transactions of $4,000 from merchandise having cost $2,400. The entries to record the day's credit transactions include a

Under a periodic inventory system, acquisition of merchandise is debited to the

The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are

The acquisition of inventory is debited to the ____________ account when a perpetual inventory system is used.

The Income statement is

A single-step income statement reports all revenues, both operating and other revenues and gains, at the top of the statement.

Prepare the necessary journal entries to record the following transactions, assuming a periodic inventory system: (a) Purchased $450,000 of merchandise on account, terms 2/10, n/30. (b) Returned $30,000 of damaged merchandise for credit. (c) Paid for the merchandise purchased within 10 days.

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

Cost of goods sold is deducted from net sales revenue for the period in order to arrive at ________________.

A credit granted to a customer for returned goods requires a debit to

Financial information is presented below: Operating Expenses \ 90,000 Sales Returns and Allowances 18,000 Sales Discounts 12,000 Sales Revenue 320,000 Cost of Goods Sold 174,000 Gross profit would be

Which of the following is not a true statement about a multiple-step income statement?

Which of the following accounts is not closed to Income Summary?

McKendrick Shoe Store has a beginning inventory of $45,000. During the period, purchases were $195,000; purchase returns, $6,000; and freight-in $15,000. A physical count of inventory at the end of the period revealed that $30,000 was still on hand. The cost of goods available for sale was

A periodic inventory system requires a detailed inventory record of inventory items.

Sales Returns and Allowances is increased when

Which of the following accounts has a normal credit balance?

A Sales Returns and Allowances account is not debited if a customer

Company A sells $2,500 of merchandise on account to Company B with credit terms of 2/10, n/30. If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check?

Gross profit is a measure of the overall profitability of a company.

On October 4, 2018, JT Corporation had credit sales transactions of $4,000 from merchandise having cost $2,400. The entries to record the day's credit transactions include a

Under a periodic inventory system, acquisition of merchandise is debited to the

The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are

The acquisition of inventory is debited to the ____________ account when a perpetual inventory system is used.

The Income statement is

A single-step income statement reports all revenues, both operating and other revenues and gains, at the top of the statement.

Prepare the necessary journal entries to record the following transactions, assuming a periodic inventory system: (a) Purchased $450,000 of merchandise on account, terms 2/10, n/30. (b) Returned $30,000 of damaged merchandise for credit. (c) Paid for the merchandise purchased within 10 days.

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