Exam 4: Accounting for Merchandising Businesses

Merchandise inventory shrinkage will increase Merchandise Inventory.

In a transaction where purchased merchandise has been returned, the buyer will increase the Customer Refunds Payable account and the seller will increase the Purchases Returns and Allowances account.

Cash paid to purchase long-term investments would be reported in the statement of cash flows in:

Which of the following is a selling expense?

Selected data from the ledger of Jones Co.after adjustment at June 30, the end of the fiscal year, are listed as follows: Accounts Receivable \ 25,000 Prepaid Insurance \ 2,250 Accumulated Depreciation 35,200 Notes Payable 60,150 Administrative Expenses 80,000 Retained Earnings 55,000 Capital Stock 40,000 Salaries Payable 3,000 Cost of Merchandise Sold 320,000 Sales (net) 550,000 Dividends 22,000 Selling Expenses 65,000 Interest Revenue 3,000 Supplies 2,750 Office Equipment 70,500 $\text { Prepare a single-step income statement for the year ended June } 30,2016 .$

A sales invoice included the following information: merchandise price, $4,500; transportation, $300; terms 1/10, n/eom, FOB shipping point.Assuming that a credit for merchandise returned of $600 is granted prior to payment, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period, what is the amount of cash received by the seller?

The indirect method of preparing the statement of cash flows reconciles net income with net cash flows from operating activities.

Based on the following data, determine the cost of merchandise sold for October. Merchandise Inventory, October 1 \ 98,560 Merchandise Inventory, October 31 102,330 Purchases 433,880 Purchases Returns \& Allowances 12,760 Purchases Discounts 9,900 Transportation In 7,620

Cost of Merchandise Sold is used in accounting for transactions by sellers of merchandise.

Surist, Inc. Surist, Inc.purchased merchandise for $300,000, received credit for purchase returns of $20,000, availed purchase discounts of $5,000, and paid transportation in of $12,000. - ? Refer to Surist, Inc.If Surist, Inc.had $30,000 in beginning inventory, and sold goods costing $180,000, what is the ending inventory balance?

When purchases of merchandise are made for cash, under the perpetual inventory system, the transaction:

Multiple-step income statements show:

The effect of a customer refund and allowance is a reduction in sales revenue and a decrease in cash or accounts receivable.

If cash dividends of $145,000 were declared during the year and the decrease in dividends payable from the beginning to the end of the year was $7,000, the statement of cash flows would report $152,000 in the financing activities section.

The amount of the total cash paid to the seller for merchandise purchased would normally include:

The following data for the year ended June 30, 2016, were extracted from the accounting records of Roof Co.: Cost of merchandise sold \ 300,000 Operating expenses 95,000 Sales 450,000 $\text { Prepare a multiple-step income statement for the current year ended June 30, } 2016 .$

The following is a single-step income statement for the X.Bonds Company: X. Bonds Company Income Statement For the Year Ended December 31, 2016 Revenues: Net Sales \ 300,000 Interest Income 20,000 Total Revenues \ 320,000 Expenses: Cost of Goods Sold \ 60,000 Selling Expenses 25,000 General and Administrative Expenses 30,000 Interest Expense 14,000 Income Tax Expense Total Expenses Net Income ? Refer to X.Bonds Company.If the income statement were prepared in a multiple-step format, income from operations would be:

Using a perpetual inventory system, the purchase of $30,000 of merchandise on account would include a(n):

If merchandise costing $2,500, terms FOB destination, 2/10, n/30, with transportation costs of $100, is paid within 10 days, the amount of the purchases discount is $52.

Which of the following statements is true about a retail business?