Exam 4: Accounting for a Merchandising Business

A 5-year note payable to be repaid in equal payments throughout the 5-year period, would be listed on the Balance Sheet as a long-term liability only.

Net sales is computed by taking:

Which of the following would NOT be classified as a retailer?

The Cost of Goods Sold account appears on the:

When a company sells goods to customers FOB destination, the company's delivery expense account is credited for the cost of shipment.

Physical inventory counts must be done:

Long-term assets on the Balance Sheet represent assets that will last longer than one operating cycle of the business.

The Outlet Store has cash sales for the week of $4,000 and credit sales of $2,500. The account(s)to be debited for these transactions is/are:

Transferring title refers to a:

If a company had net sales of $56,000, gross profit of $33,000, and net income of $8,000, the gross profit percentage would be approximately 59%.

A customer purchased items on account from Silverfish, Inc. After a few days, the customer returned the goods. Silverfish, Inc. will issue a:

Credit terms are determined by the purchaser.

Woods Company had an inventory balance of $4,200 on January 1. During the accounting period they made purchases of $12,500. The ending inventory balance was $2,250. If Woods Co. uses the periodic inventory system, what is the cost of inventory sold during the period?

Under the perpetual inventory system, Sales Returns cause:

A company has net sales of $222,000, cost of goods sold $95,000, operating expenses of $44,000, and other expenses of $9,000. The company's net income is:

Salieri & Company has net sales of $43,000, cost of goods sold $22,000, interest expense $1,000, and operating expenses $5,000. Salieri's operating income is $15,000.

Wolfe Company purchases goods for resale from Coyote, Inc. The amount of the purchase is $12,500 with terms of 3/10, n/30. Wolfe later returns $500 of the goods. Under the perpetual inventory system, the journal entry to record the return is:

If an invoice reads n/10, it means that:

Which of the following credit terms allows a discount of 4% if payment is made within 20 days of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from the date of the invoice?

Which of the following would most likely cause the net income percentage to increase?