Question 1

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit

Accepted Answer

A)  Accounts Payable. 
B)  Purchase Returns and Allowances. 
C)  Sales Revenue. 
D)  Inventory. 
A)  Accounts Payable. 
B)  Purchase Returns and Allowances. 
C)  Sales Revenue. 
D)  Inventory.

Question 2

If a company is given credit terms of 2/10, n/30, it should

Accepted Answer

A)  hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time. 
B)  pay within the discount period and recognize a savings. 
C)  pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill. 
D)  recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price. 
A)  hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time. 
B)  pay within the discount period and recognize a savings. 
C)  pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill. 
D)  recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price.

Question 3

The Inventory account is used in each of the following except the entry to record

Accepted Answer

A)  goods purchased on account. 
B)  the return of goods purchased. 
C)  payment of freight on goods sold. 
D)  payment within the discount period. 
A)  goods purchased on account. 
B)  the return of goods purchased. 
C)  payment of freight on goods sold. 
D)  payment within the discount period.

Question 4

When a customer returns merchandise previously purchased on credit, the entry for the seller to record the return requires a debit to the ________________ account and a credit to the ________________ account.

Accepted Answer

Sales Retu

Question 5

Which of the following is a true statement about inventory systems?

Accepted Answer

A)  Periodic inventory systems require more detailed inventory records. 
B)  Perpetual inventory systems require more detailed inventory records. 
C)  A periodic system requires cost of goods sold be determined after each sale. 
D)  A perpetual system determines cost of goods sold only at the end of the accounting period. 
A)  Periodic inventory systems require more detailed inventory records. 
B)  Perpetual inventory systems require more detailed inventory records. 
C)  A periodic system requires cost of goods sold be determined after each sale. 
D)  A perpetual system determines cost of goods sold only at the end of the accounting period.

Question 6

Freight-in is an account that is subtracted from the Purchases account to arrive at cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 7

The basic accounting entries for merchandising are

Accepted Answer

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

Question 8

At the beginning of the year, Hunt Company had an inventory of $750,000. During the year, the company purchased goods costing $2,400,000. If Hunt Company reported ending inventory of $900,000 and sales of $3,750,000, the company's cost of goods sold and gross profit rate must be

Accepted Answer

A)  $1,500,000 and 66.7%. 
B)  $2,250,000 and 40%. 
C)  $1,500,000 and 40%. 
D)  $2,250,000 and 60%. 
A)  $1,500,000 and 66.7%. 
B)  $2,250,000 and 40%. 
C)  $1,500,000 and 40%. 
D)  $2,250,000 and 60%.

Question 9

Comprehensive income under IFRS

Accepted Answer

A)  includes unrealized gains and losses included in net income, in contrast to GAAP. 
B)  includes unrealized gains and losses included in net income, similar to GAAP. 
C)  excludes unrealized gains and losses included in net income, in contrast to GAAP. 
D)  excludes unrealized gains and losses included in net income, similar to GAAP.
IFRS. 
A)  includes unrealized gains and losses included in net income, in contrast to GAAP. 
B)  includes unrealized gains and losses included in net income, similar to GAAP. 
C)  excludes unrealized gains and losses included in net income, in contrast to GAAP. 
D)  excludes unrealized gains and losses included in net income, similar to GAAP.
IFRS.

Question 10

A merchandising company using a perpetual inventory system will usually need to make an adjusting entry to ensure that the recorded inventory agrees with physical inventory count.

Accepted Answer

A) True 
 B)False

Question 11

In the balance sheet, ending inventory is reported

Accepted Answer

A)  in current assets immediately following accounts receivable. 
B)  in current assets immediately following prepaid expenses. 
C)  in current assets immediately following cash. 
D)  under property, plant, and equipment. 
A)  in current assets immediately following accounts receivable. 
B)  in current assets immediately following prepaid expenses. 
C)  in current assets immediately following cash. 
D)  under property, plant, and equipment.

Question 12

On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10, n/60. Sheb receives payment on July 18. The entry by Sheb on July 18 is:

Accepted Answer

The answer of On July 9, Sheb Company sells goods...

Question 13

In the Augie Company, sales were $750,000, sales returns and allowances were $30,000, and cost of goods sold was $450,000. The gross profit rate was

Accepted Answer

A)  36%. 
B)  37.5%. 
C)  40%. 
D)  41.7%. 
A)  36%. 
B)  37.5%. 
C)  40%. 
D)  41.7%.

Question 14

An enterprise which sells goods to customers is known as a

Accepted Answer

A)  proprietorship. 
B)  corporation. 
C)  retailer. 
D)  service firm. 
A)  proprietorship. 
B)  corporation. 
C)  retailer. 
D)  service firm.

Question 15

Sales returns and allowances and sales discounts are subtracted from sales in reporting net sales in the income statement.

Accepted Answer

A) True 
 B)False

Question 16

The income statement for Pepe Serna Company for the year ended December 31, 2018 is as follows:   Prepare the entries to close the revenue and expense accounts at December 31, 2018. You may omit explanations for the transactions.

Accepted Answer

The answer of The income statement for Pepe Serna Company...

Question 17

At the beginning of September 2018, Stella Company reported Inventory of $8,000. During the month, the company made purchases of $35,600. At September 30, 2018, a physical count of inventory reported $8,400 on hand. Cost of goods sold for the month is

Accepted Answer

A)  $35,200. 
B)  $35,600. 
C)  $36,000. 
D)  $43,600. 
A)  $35,200. 
B)  $35,600. 
C)  $36,000. 
D)  $43,600.

Question 18

In a perpetual inventory system, the Cost of Goods Sold account is used

Accepted Answer

A)  only when a cash sale of merchandise occurs. 
B)  only when a credit sale of merchandise occurs. 
C)  only when a sale of merchandise occurs. 
D)  whenever there is a sale of merchandise or a return of merchandise sold. 
A)  only when a cash sale of merchandise occurs. 
B)  only when a credit sale of merchandise occurs. 
C)  only when a sale of merchandise occurs. 
D)  whenever there is a sale of merchandise or a return of merchandise sold.

Question 19

For each of the following, determine the missing amounts.

Accepted Answer

1. Purchases $35000 ($45000 -

Question 20

Sales revenue should be recorded in accordance with the matching principle.

Accepted Answer

A) True 
 B)False

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit

If a company is given credit terms of 2/10, n/30, it should

The Inventory account is used in each of the following except the entry to record

When a customer returns merchandise previously purchased on credit, the entry for the seller to record the return requires a debit to the account and a credit to the account.

Which of the following is a true statement about inventory systems?

Freight-in is an account that is subtracted from the Purchases account to arrive at cost of goods purchased.

The basic accounting entries for merchandising are

At the beginning of the year, Hunt Company had an inventory of $750,000. During the year, the company purchased goods costing $2,400,000. If Hunt Company reported ending inventory of $900,000 and sales of $3,750,000, the company's cost of goods sold and gross profit rate must be

Comprehensive income under IFRS

A merchandising company using a perpetual inventory system will usually need to make an adjusting entry to ensure that the recorded inventory agrees with physical inventory count.

In the balance sheet, ending inventory is reported

On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10, n/60. Sheb receives payment on July 18. The entry by Sheb on July 18 is:

In the Augie Company, sales were $750,000, sales returns and allowances were $30,000, and cost of goods sold was $450,000. The gross profit rate was

An enterprise which sells goods to customers is known as a

Sales returns and allowances and sales discounts are subtracted from sales in reporting net sales in the income statement.

The income statement for Pepe Serna Company for the year ended December 31, 2018 is as follows: Prepare the entries to close the revenue and expense accounts at December 31, 2018. You may omit explanations for the transactions.

At the beginning of September 2018, Stella Company reported Inventory of $8,000. During the month, the company made purchases of $35,600. At September 30, 2018, a physical count of inventory reported $8,400 on hand. Cost of goods sold for the month is

In a perpetual inventory system, the Cost of Goods Sold account is used

For each of the following, determine the missing amounts.

Sales revenue should be recorded in accordance with the matching principle.

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 journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit

If a company is given credit terms of 2/10, n/30, it should

The Inventory account is used in each of the following except the entry to record

When a customer returns merchandise previously purchased on credit, the entry for the seller to record the return requires a debit to the ________________ account and a credit to the ________________ account.

Which of the following is a true statement about inventory systems?

Freight-in is an account that is subtracted from the Purchases account to arrive at cost of goods purchased.

The basic accounting entries for merchandising are

At the beginning of the year, Hunt Company had an inventory of $750,000. During the year, the company purchased goods costing $2,400,000. If Hunt Company reported ending inventory of $900,000 and sales of $3,750,000, the company's cost of goods sold and gross profit rate must be

Comprehensive income under IFRS

A merchandising company using a perpetual inventory system will usually need to make an adjusting entry to ensure that the recorded inventory agrees with physical inventory count.

In the balance sheet, ending inventory is reported

On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10, n/60. Sheb receives payment on July 18. The entry by Sheb on July 18 is:

In the Augie Company, sales were $750,000, sales returns and allowances were $30,000, and cost of goods sold was $450,000. The gross profit rate was

An enterprise which sells goods to customers is known as a

Sales returns and allowances and sales discounts are subtracted from sales in reporting net sales in the income statement.

The income statement for Pepe Serna Company for the year ended December 31, 2018 is as follows: Prepare the entries to close the revenue and expense accounts at December 31, 2018. You may omit explanations for the transactions.

At the beginning of September 2018, Stella Company reported Inventory of $8,000. During the month, the company made purchases of $35,600. At September 30, 2018, a physical count of inventory reported $8,400 on hand. Cost of goods sold for the month is

In a perpetual inventory system, the Cost of Goods Sold account is used

For each of the following, determine the missing amounts.

Sales revenue should be recorded in accordance with the matching principle.

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

When a customer returns merchandise previously purchased on credit, the entry for the seller to record the return requires a debit to the account and a credit to the account.