Question 1

What are the correct amounts missing from the condensed income statement of Arch Company?

Accepted Answer

A) Sales: $975,000; Operating expenses: $230,000 
B) Sales: $975,000; Operating expenses: $115,000 
C) Sales: $860,000; Operating expenses: $230,000 
D) Sales: $860,000; Operating expenses: $115,000 
A) Sales: $975,000; Operating expenses: $230,000 
B) Sales: $975,000; Operating expenses: $115,000 
C) Sales: $860,000; Operating expenses: $230,000 
D) Sales: $860,000; Operating expenses: $115,000

Question 2

Gadget Palace is a retailer selling unique hardware. Gadget Palace uses a perpetual inventory system. Journalize the following transactions:
On July 5, Gadget Palace purchases inventory for sale from Turbo Tools for $11,400.00 with terms 2/10, n/30.On July 6, Gadget Palace pays Fast Truck Transport $75.00 for freight in on the July 5 order.On July 8, Gadget Palace receives a credit memo from Turbo Tools for $215.00 for damaged merchandise.On July 15, Gadget Palace pays Turbo Tools the balance due.​

Accepted Answer

The answer of Gadget Palace is a retailer selling unique...

Question 3

Customer Refunds Payable is an account used to record merchandise returns from customers.

Accepted Answer

A) True 
 B)False

Question 4

The following data were extracted from the accounting records of Dana Designs for the year ended March 31.   Prepare the gross profit and cost of goods sold section of the income statement for the year ended March 31, using the periodic method.​

Accepted Answer

The answer of The following data were extracted from the...

Question 5

Match each of the following items (a-h) with the appropriate definition below.
-Expense account for recording shipping costs paid by the seller.
A)Freight
B)Delivery Expense
C)Inventory
D)Sales discount
E)Purchases Returns and Allowances
F)Debit memo
G)Purchases discount
H)Trade discount

Accepted Answer

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

Question 6

Estimated Returns Inventory is an account used when adjusting for expected merchandise sales in the next period.

Accepted Answer

A) True 
 B)False

Question 7

Taking advantage of a 2/10, n/30 purchases discount is equal to a yearly savings rate of approximately

Accepted Answer

A) 2% 
B) 24% 
C) 20% 
D) 36% 
A) 2% 
B) 24% 
C) 20% 
D) 36%

Question 8

Which of the following costs would be included in inventory?
(a)Purchase price
(b)Insurance in transit FOB shipping point
(c)Freight for delivery FOB shipping point
(d)Repair due to negligence of receiving clerk
(e)Receiving department employee salary
(f)Cost of processing purchase orders

Accepted Answer

The answer of Which of the following costs would be...

Question 9

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

Accepted Answer

A) debit to Cost of Goods Sold 
B) credit to Accounts Payable 
C) credit to Inventory 
D) credit to Sales 
A) debit to Cost of Goods Sold 
B) credit to Accounts Payable 
C) credit to Inventory 
D) credit to Sales

Question 10

Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. Pound Co. paid the invoice within the discount period. What is the sales amount to be recorded in the above transactions?

Accepted Answer

A) $25,500 
B) $26,010 
C) $24,990 
D) $16,000 
A) $25,500 
B) $26,010 
C) $24,990 
D) $16,000

Question 11

On March 15, Monroe Sales sells $9,525.00 on account to Garrison Brewer with terms of 2/10, n/30. The cost of goods sold was $6,905.00.(a) Journalize the sale and the recognition of the cost of the sale.(b) On March 20, a $125.00 credit memo is given to Garrison Brewer due to merchandise that was the wrong color. Journalize this event. The cost of the returned merchandise was $65.00.(c) On March 25, Garrison Brewer submits payment in full. Journalize this event.

Accepted Answer

The answer of On March 15, Monroe Sales sells $9,525.00...

Question 12

When purchases of merchandise are made on account with a perpetual inventory system, the transaction is recorded with which entry?

Accepted Answer

A) debit Accounts Payable; credit Inventory 
B) debit Inventory; credit Accounts Payable 
C) debit Inventory; credit Cash Discounts 
D) debit Inventory; credit Purchases 
A) debit Accounts Payable; credit Inventory 
B) debit Inventory; credit Accounts Payable 
C) debit Inventory; credit Cash Discounts 
D) debit Inventory; credit Purchases

Question 13

Selected accounts and amounts appear below. Journalize the closing entry, assuming a perpetual inventory system.

Accepted Answer

The answer of Selected accounts and amounts appear below. Journalize...

Question 14

Journalize the following transactions for the Evans Company. Assume the company uses a perpetual inventory system.(a)Sold merchandise for $645. The cost of goods sold was $375.(b)Sold merchandise for $432 and accepted VISA as the form of payment.The cost of goods sold was $195.(c)Sold merchandise on account for $670. The cost of goods sold was $438.(d)Paid credit card fees for the month of $85.​

Accepted Answer

The answer of Journalize the following transactions for the Evans...

Question 15

Which of the following accounts carry a normal debit balance?

Accepted Answer

A) Sales Tax Payable, Inventory, Delivery Expense, and Customer Refunds Payable 
B) Inventory, Delivery Expense, Cost of Goods Sold, and Estimated Returns Inventory 
C) Inventory, Cost of Goods Sold, Customer Refunds Payable, and Sales 
D) Delivery Expense, Customer Refunds Payable, Estimated Return Inventory, and Sales 
A) Sales Tax Payable, Inventory, Delivery Expense, and Customer Refunds Payable 
B) Inventory, Delivery Expense, Cost of Goods Sold, and Estimated Returns Inventory 
C) Inventory, Cost of Goods Sold, Customer Refunds Payable, and Sales 
D) Delivery Expense, Customer Refunds Payable, Estimated Return Inventory, and Sales

Question 16

The most important differences between a service business and a retail business are reflected in their operating cycles and financial statements.

Accepted Answer

A) True 
 B)False

Question 17

The Corbit Corp. sold merchandise for $10,000 cash. The cost of the goods sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be

Accepted Answer

The answer of The Corbit Corp. sold merchandise for $10,000...

Question 18

Travis Company purchased merchandise on account from a supplier for $5,700, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period.​
Under a perpetual inventory system, record the journal entries required for the above transactions.

Accepted Answer

Inventory
5,586
Acco

Question 19

What type of company would normally offer trade discounts to its customers?

Accepted Answer

A) service companies 
B) retailers 
C) wholesalers 
D) online retailers 
A) service companies 
B) retailers 
C) wholesalers 
D) online retailers

Question 20

Which of the following items would not affect the cost of inventory purchased during the period?

Accepted Answer

A) quantity discounts 
B) sales discounts 
C) freight in 
D) sales commissions 
A) quantity discounts 
B) sales discounts 
C) freight in 
D) sales commissions

Exam 5: Accounting for Retail Businesses

What are the correct amounts missing from the condensed income statement of Arch Company?

Customer Refunds Payable is an account used to record merchandise returns from customers.

The following data were extracted from the accounting records of Dana Designs for the year ended March 31. Prepare the gross profit and cost of goods sold section of the income statement for the year ended March 31, using the periodic method.​

Match each of the following items (a-h) with the appropriate definition below. -Expense account for recording shipping costs paid by the seller. A)Freight B)Delivery Expense C)Inventory D)Sales discount E)Purchases Returns and Allowances F)Debit memo G)Purchases discount H)Trade discount

Estimated Returns Inventory is an account used when adjusting for expected merchandise sales in the next period.

Taking advantage of a 2/10, n/30 purchases discount is equal to a yearly savings rate of approximately

Which of the following costs would be included in inventory? (a)Purchase price (b)Insurance in transit FOB shipping point (c)Freight for delivery FOB shipping point (d)Repair due to negligence of receiving clerk (e)Receiving department employee salary (f)Cost of processing purchase orders

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

Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. Pound Co. paid the invoice within the discount period. What is the sales amount to be recorded in the above transactions?

When purchases of merchandise are made on account with a perpetual inventory system, the transaction is recorded with which entry?

Selected accounts and amounts appear below. Journalize the closing entry, assuming a perpetual inventory system.

Which of the following accounts carry a normal debit balance?

The most important differences between a service business and a retail business are reflected in their operating cycles and financial statements.

The Corbit Corp. sold merchandise for $10,000 cash. The cost of the goods sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be

Travis Company purchased merchandise on account from a supplier for $5,700, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period.​ Under a perpetual inventory system, record the journal entries required for the above transactions.

What type of company would normally offer trade discounts to its customers?

Which of the following items would not affect the cost of inventory purchased during the period?

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

The following data were extracted from the accounting records of Dana Designs for the year ended March 31. Prepare the gross profit and cost of goods sold section of the income statement for the year ended March 31, using the periodic method.

Travis Company purchased merchandise on account from a supplier for $5,700, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period. Under a perpetual inventory system, record the journal entries required for the above transactions.