Question 1

A retailer is a middleman that buys products from manufacturers and sells them to wholesalers.

Accepted Answer

A) True 
 B)False

Question 2

On December 5, Z-Mart purchased $1,800 worth of merchandise. On December 7, Z-Mart returned $400 worth of merchandise. On December 8, the company paid the balance in full, taking a 2% discount. The amount of the payment was:

Accepted Answer

A) $1,600. 
B) $1,568. 
C) $200. 
D) $1,800. 
E) $1,372. 
A) $1,600. 
B) $1,568. 
C) $200. 
D) $1,800. 
E) $1,372.

Question 3

Describe the recording process for purchases of merchandise inventory using aperpetual inventory system.

Accepted Answer

Purchases net of trade discounts are add

Question 4

Cost of goods sold is reported on both the income statement and the balance sheet

Accepted Answer

A) True 
 B)False

Question 5

The cost of goods sold section of a multiple-step income statement includes beginning and ending inventories, goods available for sale and operating expenses.

Accepted Answer

A) True 
 B)False

Question 6

Some businesses use only one account to keep track of the amount of goods and services tax (GST)and/or Harmonized Sales Tax (HST)owed or owing.

Accepted Answer

A) True 
 B)False

Question 7

Merchandise inventory refers to products a company owns for purposes of selling tocustomers.

Accepted Answer

A) True 
 B)False

Question 8

The difference between a company's gross profit on sales and total operating expensesis:

Accepted Answer

A) Net income. 
B) Income from operations. 
C) Net sales. 
D) Net loss. 
E) Income summary. 
A) Net income. 
B) Income from operations. 
C) Net sales. 
D) Net loss. 
E) Income summary.

Question 9

On April 4, Fashion Central Suppliers (FC)sold sweaters to one of its customers for$62,000 on credit terms of 3/15, net 30. On April 8, the customer contacted FC to say that the sweater colours did not match their original order. FC reached an agreement with the customer to keep the shipment and FC granted the customer a price reduction of $5,000. The customer paid the outstanding bill on April 15.The journal entry to be made by FC on April 15 is:

Accepted Answer

A) Debit Cash $55,290; Debit Sales Discounts $1,710; Credit Accounts Receivable $57,000. 
B) Debit Cash $57,000; Debit Sales Discounts $1,860; Credit Accounts Receivable $58,860. 
C) Debit Cash $60,140; Credit Accounts Receivable $60,140. 
D) Debit Sales Returns and Allowances $5,000; Credit Accounts Receivable $5,000. 
E) Debit Accounts Receivable $60,140; Credit Sales Revenue $60,140. 
A) Debit Cash $55,290; Debit Sales Discounts $1,710; Credit Accounts Receivable $57,000. 
B) Debit Cash $57,000; Debit Sales Discounts $1,860; Credit Accounts Receivable $58,860. 
C) Debit Cash $60,140; Credit Accounts Receivable $60,140. 
D) Debit Sales Returns and Allowances $5,000; Credit Accounts Receivable $5,000. 
E) Debit Accounts Receivable $60,140; Credit Sales Revenue $60,140.

Question 10

Explain inventory shrinkage

Accepted Answer

Shrinkage is the los

Question 11

Businesses normally get a full credit for both the goods and services tax (GST)and/orHarmonized Sales Tax (HST), and the provincial sales tax (PST)that they have paid.

Accepted Answer

A) True 
 B)False

Question 12

A company's cost of merchandise available for sale consists of beginning inventory plusthe net cost of purchases minus ending inventory.

Accepted Answer

A) True 
 B)False

Question 13

Calculate the value for each missing item

Accepted Answer

The answer of Calculate the value for each missing item...

Question 14

Expenses that support the overall operations of a business and include the expenses of such activities as providing accounting services, human resource management, andfinancial management are called:

Accepted Answer

A) Operating expenses. 
B) Selling expenses. 
C) Purchasing expenses. 
D) Miscellaneous expenses. 
E) General and administrative expenses. 
A) Operating expenses. 
B) Selling expenses. 
C) Purchasing expenses. 
D) Miscellaneous expenses. 
E) General and administrative expenses.

Question 15

The cash sales operating cycle moves from

Accepted Answer

A) Purchases to inventory for sale to accounts receivable to cash sales. 
B) Accounts receivable to purchases to inventory for sale to cash sales. 
C) Inventory for sale to cash sales to purchases. 
D) Purchases to inventory for sale to cash sales. 
E) Accounts receivable to inventory for sale to cash sales. 
A) Purchases to inventory for sale to accounts receivable to cash sales. 
B) Accounts receivable to purchases to inventory for sale to cash sales. 
C) Inventory for sale to cash sales to purchases. 
D) Purchases to inventory for sale to cash sales. 
E) Accounts receivable to inventory for sale to cash sales.

Question 16

2/10, n/30 is interpreted as

Accepted Answer

A) 2% discount if paid within 30 days. 
B) 10% cash discount if the whole amount is paid within 2 days, the balance is due in 30 days. 
C) 30% discount if paid within 2 days. 
D) 30% discount if paid within 10 days. 
E) 2% cash discount if the whole amount is paid within 10 days, the balance is due in 30 days. 
A) 2% discount if paid within 30 days. 
B) 10% cash discount if the whole amount is paid within 2 days, the balance is due in 30 days. 
C) 30% discount if paid within 2 days. 
D) 30% discount if paid within 10 days. 
E) 2% cash discount if the whole amount is paid within 10 days, the balance is due in 30 days.

Question 17

Sales returns

Accepted Answer

A) Refer to merchandise that customers return to the seller after the sale. 
B) Are related to purchase discounts. 
C) Represent cash discounts. 
D) Represent trade discounts. 
E) Refer to reductions in the selling price of merchandise sold to customers. 
A) Refer to merchandise that customers return to the seller after the sale. 
B) Are related to purchase discounts. 
C) Represent cash discounts. 
D) Represent trade discounts. 
E) Refer to reductions in the selling price of merchandise sold to customers.

Question 18

A classified multiple-step income statement is a format that shows intermediate totals between sales and net income and detailed calculations of net sales and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 19

A debit to Sales Returns and Allowances and a credit to Accounts Receivable

Accepted Answer

A) Recognizes that a customer returned merchandise. 
B) Is not possible; it should be a credit to Sales Returns and Allowances and a debit to Accounts Receivable. 
C) Recognizes a cash discount taken by a customer. 
D) Requires a debit memorandum to recognize the customer's return. 
E) All of these answers are correct. 
A) Recognizes that a customer returned merchandise. 
B) Is not possible; it should be a credit to Sales Returns and Allowances and a debit to Accounts Receivable. 
C) Recognizes a cash discount taken by a customer. 
D) Requires a debit memorandum to recognize the customer's return. 
E) All of these answers are correct.

Question 20

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

Accepted Answer

A) True 
 B)False

A retailer is a middleman that buys products from manufacturers and sells them to wholesalers.

On December 5, Z-Mart purchased $1,800 worth of merchandise. On December 7, Z-Mart returned $400 worth of merchandise. On December 8, the company paid the balance in full, taking a 2% discount. The amount of the payment was:

Describe the recording process for purchases of merchandise inventory using aperpetual inventory system.

Cost of goods sold is reported on both the income statement and the balance sheet

The cost of goods sold section of a multiple-step income statement includes beginning and ending inventories, goods available for sale and operating expenses.

Some businesses use only one account to keep track of the amount of goods and services tax (GST)and/or Harmonized Sales Tax (HST)owed or owing.

Merchandise inventory refers to products a company owns for purposes of selling tocustomers.

The difference between a company's gross profit on sales and total operating expensesis:

Explain inventory shrinkage

Businesses normally get a full credit for both the goods and services tax (GST)and/orHarmonized Sales Tax (HST), and the provincial sales tax (PST)that they have paid.

A company's cost of merchandise available for sale consists of beginning inventory plusthe net cost of purchases minus ending inventory.

Calculate the value for each missing item

Expenses that support the overall operations of a business and include the expenses of such activities as providing accounting services, human resource management, andfinancial management are called:

The cash sales operating cycle moves from

2/10, n/30 is interpreted as

Sales returns

A classified multiple-step income statement is a format that shows intermediate totals between sales and net income and detailed calculations of net sales and cost of goods sold.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Appendix

Filters

Exam 5: Accounting for Merchandising Activities

A retailer is a middleman that buys products from manufacturers and sells them to wholesalers.

On December 5, Z-Mart purchased $1,800 worth of merchandise. On December 7, Z-Mart returned $400 worth of merchandise. On December 8, the company paid the balance in full, taking a 2% discount. The amount of the payment was:

Describe the recording process for purchases of merchandise inventory using aperpetual inventory system.

Cost of goods sold is reported on both the income statement and the balance sheet

The cost of goods sold section of a multiple-step income statement includes beginning and ending inventories, goods available for sale and operating expenses.

Some businesses use only one account to keep track of the amount of goods and services tax (GST)and/or Harmonized Sales Tax (HST)owed or owing.

Merchandise inventory refers to products a company owns for purposes of selling tocustomers.

The difference between a company's gross profit on sales and total operating expensesis:

Explain inventory shrinkage

Businesses normally get a full credit for both the goods and services tax (GST)and/orHarmonized Sales Tax (HST), and the provincial sales tax (PST)that they have paid.

A company's cost of merchandise available for sale consists of beginning inventory plusthe net cost of purchases minus ending inventory.

Calculate the value for each missing item

Expenses that support the overall operations of a business and include the expenses of such activities as providing accounting services, human resource management, andfinancial management are called:

The cash sales operating cycle moves from

2/10, n/30 is interpreted as

Sales returns

A classified multiple-step income statement is a format that shows intermediate totals between sales and net income and detailed calculations of net sales and cost of goods sold.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Appendix

Filters