Question 1

The operating expense section of an income statement for a wholesaler would NOT include

Accepted Answer

A)  office supplies expense. 
B)  telephone expense. 
C)  cost of goods sold. 
D)  insurance expense. 
A)  office supplies expense. 
B)  telephone expense. 
C)  cost of goods sold. 
D)  insurance expense.

Question 2

Westcock Company recently made a $20,000 purchase from a major supplier. Shipping costs were $400, terms FOB destination point. To record this purchase, Westcock Company will need to debit the

Accepted Answer

A)  Merchandise Inventory account for $20,000. 
B)  Cost of Goods Sold account for $400. 
C)  Merchandise Inventory account for $20,400. 
D)  Cost of Goods Sold account for $20,400. 
A)  Merchandise Inventory account for $20,000. 
B)  Cost of Goods Sold account for $400. 
C)  Merchandise Inventory account for $20,400. 
D)  Cost of Goods Sold account for $20,400.

Question 3

Every seller offers purchase discounts.

Accepted Answer

A) True 
 B)False

Question 4

Kingbridge Range Company has sales in 2014 of $2,650,000. During the year, the company had $80,000 in sales returns. The cost of these sales was $1,800,000. Operating expenses excluding salaries and wages were $150,000 and salaries and wages incurred during the year were $300,000. Kingbridge uses a perpetual inventory system.
Instructions
Calculate Kingbridge Range Company's gross profit margin and profit margin for 2014.

Accepted Answer

Gross profit margin = Gross pr

Question 5

Martin Sports Equipment sells a variety of sports items. The following data relates to Martin's inventory of golf club sets. 0n March 1, 2014, Martin had 22 sets of clubs in inventory at a cost of $395 each. During March, the following transactions occurred:
Mar. 2 Sold 7 sets of clubs on account to Flex Golf Club for $560 each, terms 2/10 n/30.
4 Flex Golf Club returned 2 sets of clubs. Martin returned the clubs to inventory.
11 Flex Golf Club paid the account in full.
15 Purchased 8 sets of clubs from Taylor Sports Canada at $395, terms n/30.
17 Freight of $600 on the purchase from Taylor was FOB destination and was paid by the appropriate party.
18 Sold 6 sets of clubs at $560 each for cash, and gave a 5% discount to the customer for paying cash.
22 Purchased 11 sets of clubs from Lopez Golf for $400 each. Terms 3/10 net/30.
24 Returned one set of clubs to Lopez Golf because they were defective.
31 Paid the Lopez Golf account.
Instructions
Using the perpetual inventory system, prepare the journal entries to record the transactions.

Accepted Answer

The answer of Martin Sports Equipment sells a variety of...

Question 6

The adjusted trial balance of Singh Company includes the following income statement accounts:   Instructions
Prepare the closing entries for the Singh Company.

Accepted Answer

The answer of The adjusted trial balance of Singh Company...

Question 7

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

Accepted Answer

A)  7.5% 
B)  10% 
C)  15% 
D)  30% 
A)  7.5% 
B)  10% 
C)  15% 
D)  30%

Question 8

Goods available for sale can be defined as inventory.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

The answer of The journal entry to record a return...

Question 10

A large balance in the Sales Returns and Allowances account may indicate that the merchandise which is being sold is of inferior quality.

Accepted Answer

A) True 
 B)False

Question 11

In a periodic inventory system, the inventory is adjusted

Accepted Answer

A)  each time inventory is purchased. 
B)  each time inventory is sold. 
C)  when inventory is counted at the end of the accounting period. 
D)  at the end of each month. 
A)  each time inventory is purchased. 
B)  each time inventory is sold. 
C)  when inventory is counted at the end of the accounting period. 
D)  at the end of each month.

Question 12

If the seller delivers products FOB destination, what entry will it record?

Accepted Answer

A)  Freight Out Cash 
B)  Freight In Cash 
C)  Cost of Goods Sold Cash 
D)  Inventory Cash 
A)  Freight Out Cash 
B)  Freight In Cash 
C)  Cost of Goods Sold Cash 
D)  Inventory Cash

Question 13

Cost of goods available for sale, in a periodic inventory system, is deducted from beginning inventory to determine cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 14

Below are 4 independent scenarios:
1. A store manager checks the computer system to determine if there is enough inventory to fill a customer order.
2. A year-end inventory count is completed to determine the amount of inventory sold.
3. A month-end inventory count is completed to verify the accuracy of the inventory balances.
4. As inventory is received, all items are scanned and input immediately into the inventory records.
Instructions
For each scenario determine if a perpetual or a periodic inventory system is used.

Accepted Answer

1. Perpetual
2. Peri

Question 15

Which of the following accounts has a normal credit balance?

Accepted Answer

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

Question 16

The detailed individual data from the inventory subsidiary ledger are summarized in the

Accepted Answer

A)  gross profit. 
B)  cost of goods sold. 
C)  merchandise inventory control account. 
D)  accounts payable control account. 
A)  gross profit. 
B)  cost of goods sold. 
C)  merchandise inventory control account. 
D)  accounts payable control account.

Question 17

Financial information is presented here for two companies:   Instructions 
a. Fill in the missing amounts. Show all calculations.
b. Calculate the gross profit margin and profit margin for each company.

Accepted Answer

The answer of Financial information is presented here for two...

Question 18

A company which sells goods to customers is known as a

Accepted Answer

A)  proprietorship. 
B)  corporation. 
C)  merchandising company. 
D)  service company. 
A)  proprietorship. 
B)  corporation. 
C)  merchandising company. 
D)  service company.

Question 19

The Sales Returns and Allowances account is classified as

Accepted Answer

A)  an asset account. 
B)  a contra asset account. 
C)  an expense account. 
D)  a contra revenue account. 
A)  an asset account. 
B)  a contra asset account. 
C)  an expense account. 
D)  a contra revenue account.

Question 20

In a periodic inventory system, detailed records of the goods on hand are kept throughout the period.

Accepted Answer

A) True 
 B)False

The operating expense section of an income statement for a wholesaler would NOT include

Westcock Company recently made a $20,000 purchase from a major supplier. Shipping costs were $400, terms FOB destination point. To record this purchase, Westcock Company will need to debit the

Every seller offers purchase discounts.

The adjusted trial balance of Singh Company includes the following income statement accounts: Instructions Prepare the closing entries for the Singh Company.

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

Goods available for sale can be defined as inventory.

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

A large balance in the Sales Returns and Allowances account may indicate that the merchandise which is being sold is of inferior quality.

In a periodic inventory system, the inventory is adjusted

If the seller delivers products FOB destination, what entry will it record?

Cost of goods available for sale, in a periodic inventory system, is deducted from beginning inventory to determine cost of goods purchased.

Which of the following accounts has a normal credit balance?

The detailed individual data from the inventory subsidiary ledger are summarized in the

Financial information is presented here for two companies: Instructions a. Fill in the missing amounts. Show all calculations. b. Calculate the gross profit margin and profit margin for each company.

A company which sells goods to customers is known as a

The Sales Returns and Allowances account is classified as

In a periodic inventory system, detailed records of the goods on hand are kept throughout the period.

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 operating expense section of an income statement for a wholesaler would NOT include

Westcock Company recently made a $20,000 purchase from a major supplier. Shipping costs were $400, terms FOB destination point. To record this purchase, Westcock Company will need to debit the

Every seller offers purchase discounts.

The adjusted trial balance of Singh Company includes the following income statement accounts: Instructions Prepare the closing entries for the Singh Company.

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

Goods available for sale can be defined as inventory.

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

A large balance in the Sales Returns and Allowances account may indicate that the merchandise which is being sold is of inferior quality.

In a periodic inventory system, the inventory is adjusted

If the seller delivers products FOB destination, what entry will it record?

Cost of goods available for sale, in a periodic inventory system, is deducted from beginning inventory to determine cost of goods purchased.

Which of the following accounts has a normal credit balance?

The detailed individual data from the inventory subsidiary ledger are summarized in the

Financial information is presented here for two companies: Instructions a. Fill in the missing amounts. Show all calculations. b. Calculate the gross profit margin and profit margin for each company.

A company which sells goods to customers is known as a

The Sales Returns and Allowances account is classified as

In a periodic inventory system, detailed records of the goods on hand are kept throughout the period.

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