Question 1

The Sales Returns and Allowances account does NOT provide information to management about

Accepted Answer

A)  possible inferior merchandise. 
B)  the percentage of credit sales versus cash sales. 
C)  inefficiencies in filling orders. 
D)  errors in overbilling customers. 
A)  possible inferior merchandise. 
B)  the percentage of credit sales versus cash sales. 
C)  inefficiencies in filling orders. 
D)  errors in overbilling customers.

Question 2

GST/HST paid on the purchase of inventory is

Accepted Answer

A)  an additional cost that must be absorbed by the merchandise company. 
B)  not included in inventory because it is recoverable. 
C)  recorded as an operating expense on the income statement. 
D)  recorded as additional freight costs and included in the calculation of the cost of goods sold. 
A)  an additional cost that must be absorbed by the merchandise company. 
B)  not included in inventory because it is recoverable. 
C)  recorded as an operating expense on the income statement. 
D)  recorded as additional freight costs and included in the calculation of the cost of goods sold.

Question 3

If returned merchandise is not damaged and can be sold again, the seller must record two journal entries. What will the seller record as the second journal entry?

Accepted Answer

A)  Sales Returns and Allowances Accounts Receivable 
B)  Accounts Receivable Sales 
C)  Inventory Cost of Goods Sold 
D)  Inventory Accounts Receivable 
A)  Sales Returns and Allowances Accounts Receivable 
B)  Accounts Receivable Sales 
C)  Inventory Cost of Goods Sold 
D)  Inventory Accounts Receivable

Question 4

Using a perpetual inventory system, if Shediac Video Store's accounting records show an ending inventory balance of $25,000 and a physical count shows a balance of $23,000, it is necessary to

Accepted Answer

A)  debit its inventory records. 
B)  purchase additional inventory. 
C)  remove the nonexistent inventory from its records. 
D)  credit Cost of Goods Sold. 
A)  debit its inventory records. 
B)  purchase additional inventory. 
C)  remove the nonexistent inventory from its records. 
D)  credit Cost of Goods Sold.

Question 5

If sales terms are FOB destination, the buyer is responsible for getting the goods to their intended destination.

Accepted Answer

A) True 
 B)False

Question 6

Profit from operations will result if

Accepted Answer

A)  the cost of goods sold exceeds operating expenses. 
B)  revenues exceed cost of goods sold. 
C)  revenues exceed operating expenses. 
D)  gross profit exceeds operating expenses. 
A)  the cost of goods sold exceeds operating expenses. 
B)  revenues exceed cost of goods sold. 
C)  revenues exceed operating expenses. 
D)  gross profit exceeds operating expenses.

Question 7

Freight costs are always a cost to the purchasing company.

Accepted Answer

A) True 
 B)False

Question 8

If there are no "non- operating" activities, then Profit from Operations equals the company's profit.

Accepted Answer

A) True 
 B)False

Question 9

Woodpoint Company purchased merchandise from Rockport Company with freight terms of FOB destination point. The freight costs will be paid by the

Accepted Answer

A)  seller. 
B)  buyer. 
C)  transportation company. 
D)  buyer and the seller. 
A)  seller. 
B)  buyer. 
C)  transportation company. 
D)  buyer and the seller.

Question 10

A single-step Income Statement is only done when using the periodic inventory system.

Accepted Answer

A) True 
 B)False

Question 11

An increase in profit when accompanied with a decrease in net sales will increase profit margin.

Accepted Answer

A) True 
 B)False

Question 12

When a company returns merchandise to its supplier under a periodic inventory system, the Purchases Account is credited.

Accepted Answer

A) True 
 B)False

Question 13

Midgic Farm Store had a beginning merchandise inventory of $9,000. During the period, Purchases were $35,000; Purchase Returns, $1,500; and Freight In $3,000. A physical count of inventory at the end of the period revealed that $6,000 was still on hand. Using a periodic inventory system, the cost of goods sold was

Accepted Answer

A)  $44,000. 
B)  $39,500. 
C)  $45,500. 
D)  $42,500. 
A)  $44,000. 
B)  $39,500. 
C)  $45,500. 
D)  $42,500.

Question 14

A company shows the following balances:  
-What is the gross profit margin?

Accepted Answer

A)  60% 
B)  80% 
C)  40% 
D)  20% 
A)  60% 
B)  80% 
C)  40% 
D)  20%

Question 15

The perpetual system requires a second journal entry, increasing cost of goods sold and decreasing merchandise inventory when goods are sold.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises: 10% discount for purchases paid for in full in 10 days
5% discount for purchases over $1,000
$50 discount for each 100 products ordered
$1,000 discount for purchases made in excess of $10,000
$100 discount for accounts paid within 30 days

Accepted Answer

The Answer of quantity discount and purchase discount is...

Question 17

Sales revenue less the cost of goods sold equals

Accepted Answer

A)  operating expenses. 
B)  gross profit. 
C)  ending inventory 
D)  profit. 
A)  operating expenses. 
B)  gross profit. 
C)  ending inventory 
D)  profit.

Question 18

The Sales Discount account is a contra revenue account.

Accepted Answer

A) True 
 B)False

Question 19

Financial information is provided for three different businesses:   Instructions
Calculate the missing amounts.

Accepted Answer

a. $44,650
b. $27,000
c. $7,65

Question 20

Mischa Company has a current inventory balance of $864,200.
Instructions
Prepare the ending inventory adjustment required assuming a year-end inventory account revealed the following balance:
a. $862,500
b. $922,600
c. $864,200

Accepted Answer

The answer of Mischa Company has a current inventory balance...

The Sales Returns and Allowances account does NOT provide information to management about

GST/HST paid on the purchase of inventory is

If returned merchandise is not damaged and can be sold again, the seller must record two journal entries. What will the seller record as the second journal entry?

Using a perpetual inventory system, if Shediac Video Store's accounting records show an ending inventory balance of $25,000 and a physical count shows a balance of $23,000, it is necessary to

If sales terms are FOB destination, the buyer is responsible for getting the goods to their intended destination.

Profit from operations will result if

Freight costs are always a cost to the purchasing company.

If there are no "non- operating" activities, then Profit from Operations equals the company's profit.

Woodpoint Company purchased merchandise from Rockport Company with freight terms of FOB destination point. The freight costs will be paid by the

A single-step Income Statement is only done when using the periodic inventory system.

An increase in profit when accompanied with a decrease in net sales will increase profit margin.

When a company returns merchandise to its supplier under a periodic inventory system, the Purchases Account is credited.

A company shows the following balances: -What is the gross profit margin?

The perpetual system requires a second journal entry, increasing cost of goods sold and decreasing merchandise inventory when goods are sold.

Sales revenue less the cost of goods sold equals

The Sales Discount account is a contra revenue account.

Financial information is provided for three different businesses: Instructions Calculate the missing amounts.

Mischa Company has a current inventory balance of $864,200. Instructions Prepare the ending inventory adjustment required assuming a year-end inventory account revealed the following balance: a. $862,500 b. $922,600 c. $864,200

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 5: Accounting for Merchandising Operations

The Sales Returns and Allowances account does NOT provide information to management about

GST/HST paid on the purchase of inventory is

If returned merchandise is not damaged and can be sold again, the seller must record two journal entries. What will the seller record as the second journal entry?

Using a perpetual inventory system, if Shediac Video Store's accounting records show an ending inventory balance of $25,000 and a physical count shows a balance of $23,000, it is necessary to

If sales terms are FOB destination, the buyer is responsible for getting the goods to their intended destination.

Profit from operations will result if

Freight costs are always a cost to the purchasing company.

If there are no "non- operating" activities, then Profit from Operations equals the company's profit.

Woodpoint Company purchased merchandise from Rockport Company with freight terms of FOB destination point. The freight costs will be paid by the

A single-step Income Statement is only done when using the periodic inventory system.

An increase in profit when accompanied with a decrease in net sales will increase profit margin.

When a company returns merchandise to its supplier under a periodic inventory system, the Purchases Account is credited.

A company shows the following balances: -What is the gross profit margin?

The perpetual system requires a second journal entry, increasing cost of goods sold and decreasing merchandise inventory when goods are sold.

Sales revenue less the cost of goods sold equals

The Sales Discount account is a contra revenue account.

Financial information is provided for three different businesses: Instructions Calculate the missing amounts.

Mischa Company has a current inventory balance of $864,200. Instructions Prepare the ending inventory adjustment required assuming a year-end inventory account revealed the following balance: a. $862,500 b. $922,600 c. $864,200

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters