Exam 4: Accounting for a Merchandising Business

Bach Co. had an inventory balance of $15,250 on January 1, purchased $34,000 during the accounting period, and the cost of goods sold was $28,000. What is the ending balance in the inventory account?

C & S Company purchased 80 keyboards for $15 each from Keyboards-for-Less. When they unpacked the keyboards, C & S found that 30 of the keyboards were damaged in shipping. What is the journal entry that C & S will make to record the purchase return?

Costs of Goods Sold includes which of the following?

The general public is referred to as:

When the perpetual records do not equal the physical count of the inventory, the general ledger is updated with the differences.

On the Balance Sheet, assets are listed in alphabetical order.

Kramer and Associates has the following account balances listed in alphabetical order: Accumulated Depreciation, $18,000; Accounts Payable, $7,500, Accounts Receivable, $13,000; Cash, $2,000; Equipment, $46,000, Land, $21,000, Mortgage Payable, $42,000; Prepaid Insurance, $5,500; Supplies, $1,000; Unearned Revenue, $4,000; Wages payable, $6,000. Kramer and Associates' long-term assets are:

If an invoice shows a total of $3,500 with terms 3/15, n/30, the customer may pay $3,395 within 30 days to satisfy the bill.

Advertising and promotion are examples of selling expenses.

In a Balance Sheet prepared in report form, liabilities must be listed after:

Torres, Inc. purchases $4,800 of inventory on account from Leo Corp. The journal entry to record this purchase for Torres under a perpetual inventory system is:

Because the ________ of a company tends to vary little from year to year, a significant change would prompt further investigation.

Under the perpetual inventory system, which of the following T-accounts correctly shows the cost flows through the Inventory account?

Prism Co. purchased $2,300 of merchandise on account. The terms of the purchase are 2/15, n/45, FOB shipping point with prepaid shipping costs of $60. If Prism pays within the discount period, what is the amount of the purchase discount?

Because of innovative and computerized methods of tracking inventory, most businesses today use the perpetual inventory system.

Renoir, Inc. has gross profit of $93,400, operating expenses of $34,000, interest expense of $900 and 2,000 average shares of stock outstanding. What is Renoir's Earnings per Share?

S&C, Inc. purchases $2,100 of inventory with shipping terms FOB Olympia. The supplier is based in Seattle and S&C is based in Olympia. The shipping costs are $300. What is the cost of S&C's inventory?

If a company has net sales of $134,000, gross profit of $48,000, and $14,000 net income. The gross profit percentage would be approximately 36%.

A company uses the perpetual inventory system. At year end the general ledger indicated that this company had a balance of $47,000 in the Inventory account. Actual inventory on hand per a physical count was $48,500. What action does the company now need to take?

The accounting principle that relates to the expensing of freight charges is: