Question 1

For each of the following, determine the missing amounts.

Accepted Answer

1. Gross Profit = $35,000 ($25

Question 2

At the beginning of the year, Hinz Company had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Hinz Company reported ending inventory of $600,000 and sales of $2,000,000, the company's cost of goods sold and gross profit rate must be

Accepted Answer

A)  $1,000,000 and 50%. 
B)  $1,400,000 and 30%. 
C)  $1,000,000 and 30%. 
D)  $1,400,000 and 70%. 
A)  $1,000,000 and 50%. 
B)  $1,400,000 and 30%. 
C)  $1,000,000 and 30%. 
D)  $1,400,000 and 70%.

Question 3

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

Accepted Answer

The answer of The adjusted trial balance of Dailey Music...

Question 4

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

Accepted Answer

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

Question 5

The collection of a $900 account after the 2 percent discount period will result in a

Accepted Answer

A)  debit to Cash for $882. 
B)  debit to Accounts Receivable for $900. 
C)  debit to Cash for $900. 
D)  debit to Sales Discounts for $18. 
A)  debit to Cash for $882. 
B)  debit to Accounts Receivable for $900. 
C)  debit to Cash for $900. 
D)  debit to Sales Discounts for $18.

Question 6

Richter Company sells merchandise on account for $2,000 to Lynch Company with credit terms of 3/10, n/60. Lynch Company returns $200 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Richter Company make upon receipt of the check and the damaged merchandise?

Accepted Answer

The answer of Richter Company sells merchandise on account for...

Question 7

The collection of a $600 account within the 2 percent discount period will result in a

Accepted Answer

A)  debit to Sales Discounts for $12. 
B)  debit to Accounts Receivable for $588. 
C)  credit to Cash for $588. 
D)  credit to Accounts Receivable for $588. 
A)  debit to Sales Discounts for $12. 
B)  debit to Accounts Receivable for $588. 
C)  credit to Cash for $588. 
D)  credit to Accounts Receivable for $588.

Question 8

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 9

Gross profit rate is computed by dividing cost of goods sold by net sales.

Accepted Answer

A) True 
 B)False

Question 10

The Merchandise Inventory account balance appearing in a worksheet represents the

Accepted Answer

A)  ending inventory. 
B)  beginning inventory. 
C)  cost of merchandise purchased. 
D)  cost of merchandise sold. 
A)  ending inventory. 
B)  beginning inventory. 
C)  cost of merchandise purchased. 
D)  cost of merchandise sold.

Question 11

Presented here are the components in Ferrell Company's income statement. Determine the missing amounts.

Accepted Answer

a. $35,000

Question 12

On a classified balance sheet, merchandise inventory is classified as

Accepted Answer

A)  an intangible asset. 
B)  property, plant, and equipment. 
C)  a current asset. 
D)  a long-term investment. 
A)  an intangible asset. 
B)  property, plant, and equipment. 
C)  a current asset. 
D)  a long-term investment.

Question 13

Prepare the necessary journal entries on the books of Jayhawk Carpet Company to record the following transactions, assuming a perpetual inventory system (you may omit explanations):
(a) Jayhawk purchased $40,000 of merchandise on account, terms 2/10, n/30.
(b) Returned $4,000 of damaged merchandise for credit.
(c) Paid for the merchandise purchased within 10 days.

Accepted Answer

The answer of Prepare the necessary journal entries on the...

Question 14

In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of

Accepted Answer

A)  sales. 
B)  merchandise inventory. 
C)  sales discounts. 
D)  freight-out. 
A)  sales. 
B)  merchandise inventory. 
C)  sales discounts. 
D)  freight-out.

Question 15

Purchase Returns and Allowances and Purchase Discounts are subtracted from Purchases to produce net purchases.

Accepted Answer

A) True 
 B)False

Question 16

Paxson Supply Company uses a periodic inventory system. During September, the following transactions and events occurred.
Sept. 3 Purchased 80 backpacks at $20 each from Barnes Company, terms 2/10, n/30.
Sept. 6 Received credit of $100 for the return of 5 backpacks purchased on Sept. 3 that were defective.
Sept. 9 Sold 15 backpacks for $40 each to Starr Books, terms 2/10, n/30.
Sept. 13 Paid Barnes Company in full.
Instructions
Journalize the September transactions for Paxson Supply Company.

Accepted Answer

The answer of Paxson Supply Company uses a periodic inventory...

Question 17

During August, 2010, Joe's Supply Store generated revenues of $30,000. The company's expenses were as follows: cost of goods sold of $12,000 and operating expenses of $2,000. The company also had rent revenue of $500 and a gain on the sale of a delivery truck of $1,000.
Joe's net income for August, 2010 is

Accepted Answer

A)  $18,000. 
B)  $17,500. 
C)  $16,500. 
D)  $16,000. 
A)  $18,000. 
B)  $17,500. 
C)  $16,500. 
D)  $16,000.

Question 18

Murray's Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company's gross profit rate is 40%, Murray's will report monthly net sales revenue and cost of goods sold of

Accepted Answer

A)  $38,000 and $22,800. 
B)  $37,200 and $14,880. 
C)  $37,200 and $22,320. 
D)  $38,000 and $22,320. 
A)  $38,000 and $22,800. 
B)  $37,200 and $14,880. 
C)  $37,200 and $22,320. 
D)  $38,000 and $22,320.

Question 19

Which of the following accounts has a normal credit balance?

Accepted Answer

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

Question 20

On September 1, Reid Supply had an inventory of 15 backpacks at a cost of $25 each. The company uses a perpetual inventory system. During September, the following transactions and events occurred.
Sept. 4 Purchased 70 backpacks at $25 each from Hunter, terms 2/10, n/30.
Sept. 6 Received credit of $150 for the return of 6 backpacks purchased on Sept. 4 that were defective.
Sept. 9 Sold 40 backpacks for $35 each to Oliver Books, terms 2/10, n/30.
Sept. 13 Sold 15 backpacks for $35 each to Heller Office Supply, terms n/30.
Sept. 14 Paid Hunter in full, less discount.
Instructions
Journalize the September transactions for Reid Supply.

Accepted Answer

The answer of On September 1, Reid Supply had an...

Exam 5: Accounting for Merchandising Operations

For each of the following, determine the missing amounts.

At the beginning of the year, Hinz Company had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Hinz Company reported ending inventory of $600,000 and sales of $2,000,000, the company's cost of goods sold and gross profit rate must be

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

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

The collection of a $900 account after the 2 percent discount period will result in a

The collection of a $600 account within the 2 percent discount period will result in a

An enterprise which sells goods to customers is known as a

Gross profit rate is computed by dividing cost of goods sold by net sales.

The Merchandise Inventory account balance appearing in a worksheet represents the

Presented here are the components in Ferrell Company's income statement. Determine the missing amounts.

On a classified balance sheet, merchandise inventory is classified as

In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of

Purchase Returns and Allowances and Purchase Discounts are subtracted from Purchases to produce net purchases.

Murray's Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company's gross profit rate is 40%, Murray's will report monthly net sales revenue and cost of goods sold of

Which of the following accounts has a normal credit balance?

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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