Question 1

A physical count of the inventory system at year end is only required in the periodic system of inventory.

Accepted Answer

A) True 
 B)False

Question 2

The HST collected on a sale of merchandise is recorded as

Accepted Answer

A)  a selling expense. 
B)  sales tax payable. 
C)  sales revenue. 
D)  cost of goods sold. 
A)  a selling expense. 
B)  sales tax payable. 
C)  sales revenue. 
D)  cost of goods sold.

Question 3

Match between columns
                        Premises: Dureck purchases various products, FOB shipping point.
Zeus Company advises all customers that they only ensure products meet the specified shipping point.
Balli Company orders 500 yoga mats. Balli has recorded the freight charges of $200 to inventory.
Organic Company sells products with a promise that they will ensure all products reach their destination free of charge to the customer.
Purec Company purchases 700 chairs, FOB shipping point.
Malcone company sells DVD's to Kirkland industries, FOB destination.

Accepted Answer

The Answer of Buyer and Seller is...

Question 4

A company can improve its profit margin by increasing its gross profit margin.

Accepted Answer

A) True 
 B)False

Question 5

In a perpetual inventory system, a merchandiser will record the purchase of individual inventory items in a (an) ____________ account.

Accepted Answer

A)  control 
B)  subsidiary 
C)  expense 
D)  general ledger 
A)  control 
B)  subsidiary 
C)  expense 
D)  general ledger

Question 6

Yatsu Limited has the following information in its accounting records as at December 31, 2014:   A physical inventory count revealed that there was $68,000 in ending inventory.
-Net purchases are

Accepted Answer

A)  $129,860. 
B)  $134,360. 
C)  $121,810. 
D)  $117,310. 
A)  $129,860. 
B)  $134,360. 
C)  $121,810. 
D)  $117,310.

Question 7

Freight costs incurred by the seller on outgoing merchandise is shown on the Income Statement as part of

Accepted Answer

A)  Cost of Goods Sold. 
B)  Operating Expenses. 
C)  Sales Revenue. 
D)  Liabilities. 
A)  Cost of Goods Sold. 
B)  Operating Expenses. 
C)  Sales Revenue. 
D)  Liabilities.

Question 8

All of the following accounts are closed at the end of the accounting period EXCEPT

Accepted Answer

A)  Sales Returns and Allowances. 
B)  Freight Out. 
C)  Cost of Goods Sold. 
D)  Merchandise Inventory. 
A)  Sales Returns and Allowances. 
B)  Freight Out. 
C)  Cost of Goods Sold. 
D)  Merchandise Inventory.

Question 9

A service company will NOT have to measure gross profit.

Accepted Answer

A) True 
 B)False

Question 10

Tidnish Company sells merchandise on account for $2,400 to Upper Cape Company. Upper Cape Company returns $800 (cost $500) of merchandise that was damaged, along with a cheque to settle the account. What entry does Tidnish Company make upon receipt of the cheque?

Accepted Answer

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

Question 11

In a multiple-step Income Statement, operating expenses are deducted from Gross Profit to give the Profit from Operations.

Accepted Answer

A) True 
 B)False

Question 12

Northend Electric returned to Southerby Inc. 5 damaged fuses. Southerby accepted the return and refunded the $200 Northend had paid for the order. To record this return, Southerby's accountant must

Accepted Answer

A)  debit Cash and credit Sales for $200. 
B)  debit Sales and credit Cash for $200. 
C)  debit Sales Returns and Allowances and credit Cash for $200. 
D)  debit Sales Returns and Allowances and credit Accounts Receivable for $200. 
A)  debit Cash and credit Sales for $200. 
B)  debit Sales and credit Cash for $200. 
C)  debit Sales Returns and Allowances and credit Cash for $200. 
D)  debit Sales Returns and Allowances and credit Accounts Receivable for $200.

Question 13

Goods that have been sold in a merchandising company are called cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 14

An increase in sales will always increase a company's gross profit margin.

Accepted Answer

A) True 
 B)False

Question 15

Gross profit for a merchandising concern is net sales minus

Accepted Answer

A)  operating expenses. 
B)  cost of goods sold. 
C)  sales returns and allowances. 
D)  cost of goods available for sale. 
A)  operating expenses. 
B)  cost of goods sold. 
C)  sales returns and allowances. 
D)  cost of goods available for sale.

Question 16

In a perpetual inventory system, the Merchandise Inventory account should equal the actual merchandise on hand

Accepted Answer

A)  at all times. 
B)  only after the physical inventory account has occurred. 
C)  only at the beginning of the accounting period. 
D)  only at the end of the accounting period. 
A)  at all times. 
B)  only after the physical inventory account has occurred. 
C)  only at the beginning of the accounting period. 
D)  only at the end of the accounting period.

Question 17

If a company determines cost of goods sold each time a sale occurs, it

Accepted Answer

A)  must have a computer accounting system. 
B)  must have a service business. 
C)  uses a periodic inventory system. 
D)  uses a perpetual inventory system. 
A)  must have a computer accounting system. 
B)  must have a service business. 
C)  uses a periodic inventory system. 
D)  uses a perpetual inventory system.

Question 18

Using a perpetual inventory system, the cost of freight in

Accepted Answer

A)  increases the cost of merchandise inventory. 
B)  is always paid by the seller. 
C)  is reflected in an expense account called Freight In. 
D)  reflects the cost of delivering goods to customers. 
A)  increases the cost of merchandise inventory. 
B)  is always paid by the seller. 
C)  is reflected in an expense account called Freight In. 
D)  reflects the cost of delivering goods to customers.

Question 19

Using a perpetual inventory system, if Sackville Harness Shop accounting records show an ending inventory balance of $43,000 and a physical count shows a balance of $45,000, it is necessary to

Accepted Answer

A)  debit your inventory records to adjust to actual. 
B)  purchase additional inventory. 
C)  credit sales. 
D)  credit Purchase Returns and Allowances. 
A)  debit your inventory records to adjust to actual. 
B)  purchase additional inventory. 
C)  credit sales. 
D)  credit Purchase Returns and Allowances.

Question 20

Gross profit margin is net sales divided by cost of goods sold.

Accepted Answer

A) True 
 B)False

A physical count of the inventory system at year end is only required in the periodic system of inventory.

The HST collected on a sale of merchandise is recorded as

A company can improve its profit margin by increasing its gross profit margin.

In a perpetual inventory system, a merchandiser will record the purchase of individual inventory items in a (an) ____________ account.

Yatsu Limited has the following information in its accounting records as at December 31, 2014: A physical inventory count revealed that there was $68,000 in ending inventory. -Net purchases are

Freight costs incurred by the seller on outgoing merchandise is shown on the Income Statement as part of

All of the following accounts are closed at the end of the accounting period EXCEPT

A service company will NOT have to measure gross profit.

Tidnish Company sells merchandise on account for $2,400 to Upper Cape Company. Upper Cape Company returns $800 (cost $500) of merchandise that was damaged, along with a cheque to settle the account. What entry does Tidnish Company make upon receipt of the cheque?

In a multiple-step Income Statement, operating expenses are deducted from Gross Profit to give the Profit from Operations.

Northend Electric returned to Southerby Inc. 5 damaged fuses. Southerby accepted the return and refunded the $200 Northend had paid for the order. To record this return, Southerby's accountant must

Goods that have been sold in a merchandising company are called cost of goods sold.

An increase in sales will always increase a company's gross profit margin.

Gross profit for a merchandising concern is net sales minus

In a perpetual inventory system, the Merchandise Inventory account should equal the actual merchandise on hand

If a company determines cost of goods sold each time a sale occurs, it

Using a perpetual inventory system, the cost of freight in

Using a perpetual inventory system, if Sackville Harness Shop accounting records show an ending inventory balance of $43,000 and a physical count shows a balance of $45,000, it is necessary to

Gross profit margin is net sales divided by cost of goods sold.

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

A physical count of the inventory system at year end is only required in the periodic system of inventory.

The HST collected on a sale of merchandise is recorded as

A company can improve its profit margin by increasing its gross profit margin.

In a perpetual inventory system, a merchandiser will record the purchase of individual inventory items in a (an) ____________ account.

Yatsu Limited has the following information in its accounting records as at December 31, 2014: A physical inventory count revealed that there was $68,000 in ending inventory. -Net purchases are

Freight costs incurred by the seller on outgoing merchandise is shown on the Income Statement as part of

All of the following accounts are closed at the end of the accounting period EXCEPT

A service company will NOT have to measure gross profit.

Tidnish Company sells merchandise on account for $2,400 to Upper Cape Company. Upper Cape Company returns $800 (cost $500) of merchandise that was damaged, along with a cheque to settle the account. What entry does Tidnish Company make upon receipt of the cheque?

In a multiple-step Income Statement, operating expenses are deducted from Gross Profit to give the Profit from Operations.

Northend Electric returned to Southerby Inc. 5 damaged fuses. Southerby accepted the return and refunded the $200 Northend had paid for the order. To record this return, Southerby's accountant must

Goods that have been sold in a merchandising company are called cost of goods sold.

An increase in sales will always increase a company's gross profit margin.

Gross profit for a merchandising concern is net sales minus

In a perpetual inventory system, the Merchandise Inventory account should equal the actual merchandise on hand

If a company determines cost of goods sold each time a sale occurs, it

Using a perpetual inventory system, the cost of freight in

Using a perpetual inventory system, if Sackville Harness Shop accounting records show an ending inventory balance of $43,000 and a physical count shows a balance of $45,000, it is necessary to

Gross profit margin is net sales divided by cost of goods sold.

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