Exam 4: Accounting for a Merchandising Business

Simmons, Inc. received an invoice from Wilson Company for $3,500 with terms of 3/10, n/45 on March 8. If Simmons pays the bill on March 15, they will credit inventory under a perpetual inventory system for:

A high gross profit percentage means:

Sydney, a customer, purchased $350 of merchandise from Illusions, Inc. Under the perpetual inventory system, Illusions, Inc. will record a:

The net income percentage is computed by dividing net income by gross profit.

Merchandise returned by the customer for a cash refund is called a:

Under a perpetual inventory system, when goods are returned to the retailer from a customer:

A company has net sales of $124,000, cost of goods sold of $76,000, and operating expenses of $45,000. The company's net income percentage is approximately:

A company's gross profit percentage increased from 37% to 41%. What does this mean?

A low gross profit percentage means that:

If a customer pays within the discount period, the discount will be debited to the Inventory account.

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

Macy's.com, Walmart.com, and Target.com are examples of Internet:

Which of the following would be classified as a retailer?

FOB shipping point means that title passes at the time the product is shipped from the seller.

Cost of Goods Sold is part of general and administrative expenses.

Charmed, Inc. purchased merchandise from Birch Co. for cash. The journal entry for Charmed, Inc. under a perpetual inventory system will be:

Wages Payable, Income Taxes Payable and Accounts Payable are:

Under the perpetual inventory system, the need for a physical count of inventory is eliminated.