Exam 5: Accounting for Merchandising Operations

In a worksheet cost of goods sold will be shown in the trial balance (Dr.) adjusted trial balance (Dr.) and income statement (Dr.) columns.

The collection of a $1400 account after the 2 percent discount period will result in a

Net sales is sales revenue less

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point then the

Retailers and wholesalers are both considered merchandisers.

Baker Company sells merchandise on account for $5000 to Helix Company with credit terms of 1/10 n/30. Helix Company returns $600 of merchandise that was damaged along with a check to settle the account within the discount period. What entry does Baker Company make upon receipt of the check? a. Cash 4,400 Accounts Receivable 4,400 b. Cash 4,356 Sales Returns and Allowances 644 Accounts Receivable 5,000 c. Cash 4,356 Sales Returns and Allowances 600 Sales Discounts 44 Accounts Receivable 5,000 d. Cash 4,950 Sales Discounts 50 Sales Returns and Allowances 600 Accounts Receivable 4,400

In a perpetual inventory system cost of goods sold is recorded

Under GAAP income statement items are generally described as

During the year Bolt's Pet Shop's inventory decreased by $35000. If the company's cost of goods sold for the year was $600000 purchases must have been

The adjusted trial balance of Bon Jovi Music Company appears below. Bon Jovi Music Company prepares monthly financial statements and uses the perpetual inventory method. Instructions Complete the worksheet below.

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

A merchandising company using a perpetual system will make

If a company has net sales of $600000 and cost of goods sold of $372000 the gross profit percentage is

Inventories are defined by IFRS as

In a perpetual inventory system the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to

The following information is available for Liu Company: Debit Credit Owner's Capital \ 50,000 Owner's Drawings \ 23,000 Sales Revenue 500,000 Sales Returns and Allowances 20,000 Sales Discounts 7,500 Cost of Goods Sold 302,000 Freight-Out 2,300 Advertising Expense 15,000 Interest Expense 19,200 Salaries and Wages Expense 53,000 Utilities Expense 18,000 Depreciation Expense 9,000 Interest Revenue 18,000 Instructions Using the above information prepare the closing entries for Liu Company.

All of the following are contra revenue accounts except

Company P sells $3000 of merchandise on account to Company Q with credit terms of 2/10 n/30. If Company Q remits a check taking advantage of the discount offered what is the amount of Company Q's check?

McIntyre Company made a purchase of merchandise on credit from Marvin Company on August 8 for $11000 terms 3/10 n/30. On August 17 McIntyre makes the appropriate payment to Marvin. The entry on August 17 for McIntyre Company is: d. Accounts Payable 11,000 Inventory 330 Cash 10,670

Bolivia Company gathered the following condensed data for the year ended December 31 2016: Cost of goods sold 760,000 Net sales 1,400,000 Operating expenses 277,000 Interest expense 43,000 Dividend revenue 40,000 Casualy loss from vandalism 125,000 Instructions 1. Prepare a single-step income statement for the year ended December 31 2016. 2. Prepare a multiple-step income statement for the year ended December 31 2016.