Question 1

Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as

Accepted Answer

A) sales on account 
B) sales returns 
C) cash sales 
D) sales when the credit card company remits the cash 
A) sales on account 
B) sales returns 
C) cash sales 
D) sales when the credit card company remits the cash

Question 2

To encourage a buyer to pay before the end of the credit period, the seller may offer a

Accepted Answer

A) purchases discount 
B) sales discount 
C) trade discount 
D) payment discount 
A) purchases discount 
B) sales discount 
C) trade discount 
D) payment discount

Question 3

Match each of the following terms (a-h) with the correct definition below.
-Statement where net income is determined by deducting all expenses from all revenues.
A)Credit terms
B)FOB destination
C)FOB shipping point
D)Periodic inventory system
E)Perpetual inventory system
F)Inventory shrinkage
G)Single-step income statement
H)Multiple-step income statement

Accepted Answer

The answer of Match each of the following terms (a-h)...

Question 4

Gross profit minus selling expenses equals net income.

Accepted Answer

A) True 
 B)False

Question 5

When merchandise purchased on account is returned under the perpetual inventory system, the buyer would debit

Accepted Answer

A) Inventory 
B) Purchases Returns and Allowances 
C) Accounts Payable 
D) Accounts Receivable 
A) Inventory 
B) Purchases Returns and Allowances 
C) Accounts Payable 
D) Accounts Receivable

Question 6

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

Accepted Answer

The answer of The proper journal entry to record the...

Question 7

Journalize the following transactions for both Abbott Co. (seller) and Dalton Co. (buyer). Assume both of the companies use the perpetual inventory system.July 3
Abbott Co. sold merchandise on account to Dalton Co., $7,500, terms FOB shipping point, net/eom. The cost of the goods sold was $4,400.5
Dalton Co. paid $275 freight charges on purchase from Abbott Co.9
Abbott Co. issued Dalton Co. a credit memo for merchandise returned, $2,250.The cost of the merchandise returned was $1,325.11
Abbott Co. received payment from Dalton Co. for purchase of July 3.​

Accepted Answer

The answer of Journalize the following transactions for both Abbott...

Question 8

Merchandise is purchased for $6,000 on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the required payment if paid on September 12?

Accepted Answer

A) $6,120 
B) $5,940 
C) $6,090 
D) $5,880 
A) $6,120 
B) $5,940 
C) $6,090 
D) $5,880

Question 9

Stergell Company had sales of $1,500,000 and related cost of goods sold of $920,000 for the year. Stergell estimates that customers will request refunds for 1.5% of sales and estimates that merchandise costing $12,000 will be returned. Journalize the adjusting entries on December 31 to record the expected customer returns.​

Accepted Answer

The answer of Stergell Company had sales of $1,500,000 and...

Question 10

The cost of inventory is limited to the purchase price less any purchase discounts.

Accepted Answer

A) True 
 B)False

Question 11

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

Accepted Answer

A) True 
 B)False

Question 12

Which account is not classified as a selling expense?

Accepted Answer

A) Sales Salaries 
B) Delivery Expense 
C) Cost of Goods Sold 
D) Advertising Expense 
A) Sales Salaries 
B) Delivery Expense 
C) Cost of Goods Sold 
D) Advertising Expense

Question 13

When merchandise that was sold is returned, a credit to Customer Refunds Payable is made.

Accepted Answer

A) True 
 B)False

Question 14

Prepare a multiple-step income statement for Armstrong Co. from the following data for the year ended December 31.​
Sales, $755,000; cost of goods sold, $330,000; administrative expenses, $35,000; interest expense, $30,000; rent revenue, $25,000; selling expenses, $50,000.

Accepted Answer

The answer of Prepare a multiple-step income statement for Armstrong...

Question 15

Which of the lists below shows accounts that would be closed at the end of the fiscal period?

Accepted Answer

A) Sales, Accounts Payable, Dividends, and Inventory 
B) Cost of Goods Sold, Supplies, Wages Payable, and Dividends 
C) Retained Earnings, Depreciation Expense, Notes Payable, Store Supplies 
D) Sales, Cost of Goods Sold, Supplies Expense, and Wages Expense 
A) Sales, Accounts Payable, Dividends, and Inventory 
B) Cost of Goods Sold, Supplies, Wages Payable, and Dividends 
C) Retained Earnings, Depreciation Expense, Notes Payable, Store Supplies 
D) Sales, Cost of Goods Sold, Supplies Expense, and Wages Expense

Question 16

Multiple-step income statements show

Accepted Answer

A) gross profit but not income from operations 
B) neither gross profit nor income from operations 
C) both gross profit and income from operations 
D) income from operations but not gross profit 
A) gross profit but not income from operations 
B) neither gross profit nor income from operations 
C) both gross profit and income from operations 
D) income from operations but not gross profit

Question 17

Discuss the following statement:
"Operating cycles for all merchandising businesses are the same, with similar profit margins."
Include an example(s) to illustrate your explanation.

Accepted Answer

This is not true. While the operations o

Question 18

Under the perpetual inventory system, when a sale is made, both the sale and cost of goods sold are recorded.

Accepted Answer

A) True 
 B)False

Question 19

When the perpetual inventory system is used, the inventory sold is debited to

Accepted Answer

A) Supplies Expense 
B) Cost of Goods Sold 
C) Inventory 
D) Sales 
A) Supplies Expense 
B) Cost of Goods Sold 
C) Inventory 
D) Sales

Question 20

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Accepted Answer

A) credit to Customer Refunds Payable 
B) debit to Inventory 
C) credit to Inventory 
D) debit to Cash 
A) credit to Customer Refunds Payable 
B) debit to Inventory 
C) credit to Inventory 
D) debit to Cash

Exam 5: Accounting for Retail Businesses

Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as

To encourage a buyer to pay before the end of the credit period, the seller may offer a

Gross profit minus selling expenses equals net income.

When merchandise purchased on account is returned under the perpetual inventory system, the buyer would debit

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

Merchandise is purchased for $6,000 on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the required payment if paid on September 12?

The cost of inventory is limited to the purchase price less any purchase discounts.

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

Which account is not classified as a selling expense?

When merchandise that was sold is returned, a credit to Customer Refunds Payable is made.

Prepare a multiple-step income statement for Armstrong Co. from the following data for the year ended December 31.​ Sales, $755,000; cost of goods sold, $330,000; administrative expenses, $35,000; interest expense, $30,000; rent revenue, $25,000; selling expenses, $50,000.

Which of the lists below shows accounts that would be closed at the end of the fiscal period?

Multiple-step income statements show

Discuss the following statement: "Operating cycles for all merchandising businesses are the same, with similar profit margins." Include an example(s) to illustrate your explanation.

Under the perpetual inventory system, when a sale is made, both the sale and cost of goods sold are recorded.

When the perpetual inventory system is used, the inventory sold is debited to

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

Filters

Prepare a multiple-step income statement for Armstrong Co. from the following data for the year ended December 31. Sales, $755,000; cost of goods sold, $330,000; administrative expenses, $35,000; interest expense, $30,000; rent revenue, $25,000; selling expenses, $50,000.