Question 1

Sales returns:

Accepted Answer

A) Refer to merchandise that customers return to the seller after the sale. 
B) Refer to reductions in the selling price of merchandise sold to customers. 
C) Represent cash discounts. 
D) Represent trade discounts. 
E) Are not recorded under the perpetual inventory system until the end of each accounting period. 
A) Refer to merchandise that customers return to the seller after the sale. 
B) Refer to reductions in the selling price of merchandise sold to customers. 
C) Represent cash discounts. 
D) Represent trade discounts. 
E) Are not recorded under the perpetual inventory system until the end of each accounting period.

Question 2

Sales less sales discounts less sales returns and allowances equals:

Accepted Answer

A) Net purchases. 
B) Cost of goods sold. 
C) Net sales. 
D) Gross profit. 
E) Net income. 
A) Net purchases. 
B) Cost of goods sold. 
C) Net sales. 
D) Gross profit. 
E) Net income.

Question 3

A merchandising company:

Accepted Answer

A) Earns net income by buying and selling merchandise. 
B) Receives fees only in exchange for services. 
C) Earns profit from commissions only. 
D) Earns profit from fares only. 
E) Buys products from consumers. 
A) Earns net income by buying and selling merchandise. 
B) Receives fees only in exchange for services. 
C) Earns profit from commissions only. 
D) Earns profit from fares only. 
E) Buys products from consumers.

Question 4

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Accepted Answer

The answer of The __________________ inventory system continually updates accounting...

Question 5

A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

Accepted Answer

The answer of A merchandising company's ___________ begins with the...

Question 6

A single-step income statement includes cost of goods sold as another expense,and shows only one subtotal for total expenses.

Accepted Answer

A) True 
 B)False

Question 7

FOB _________________ means the buyer accepts ownership when the goods depart the seller's place of business.The buyer is responsible for paying shipping costs and bears the risk of damage or loss when goods are in transit.

Accepted Answer

shipping p

Question 8

_____________ are non-operating activities that include interest expense,losses from asset disposals,and casualty losses.

Accepted Answer

Other expe

Question 9

Under both the periodic and perpetual inventory systems,the temporary account Purchases Returns and Allowances is used to accumulate the cost of all returns and allowances for a period.

Accepted Answer

A) True 
 B)False

Question 10

Explain the difference between the single-step and multiple-step income statements.

Accepted Answer

A single-step income statement format in

Question 11

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accepted Answer

The answer of A ______________________ income statement includes cost of...

Question 12

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Accepted Answer

A) True 
 B)False

Question 13

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Accepted Answer

A) True 
 B)False

Question 14

Inventory shrinkage can be computed by comparing the ___________ of inventory with recorded quantities and amounts.

Accepted Answer

physical c

Question 15

The following information refers to Annie's Attic and its competitors in the antiques business.
Current Ratio Quick ratio
Annie's Attic………………... 2.0 0.95
Bart's Basement……... 1.5 1.00
Chisolm's Collectibles…... 1.8 1.20
Martin's Marbles…………. 1.9 0.80
Industry Average………… 2.0 1.00
Required:
Comment on the relative liquidity positions of these companies.

Accepted Answer

Both Chisolm's Collectibles and Bart's B

Question 16

An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:

Accepted Answer

A) Balanced income statement. 
B) Single-step income statement. 
C) Multiple-step income statement. 
D) Combined income statement. 
E) Simplified income statement. 
A) Balanced income statement. 
B) Single-step income statement. 
C) Multiple-step income statement. 
D) Combined income statement. 
E) Simplified income statement.

Question 17

A _____________________ income statement format shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

Accepted Answer

The answer of A _____________________ income statement format shows detailed...

Question 18

A company had a gross profit of $300,000 based on sales of $400,000.Its cost of goods sold equals $700,000.

Accepted Answer

A) True 
 B)False

Question 19

Prepare journal entries to record the following merchandising transactions of Dean Company,which applies the perpetual inventory system.Dean Company offers all of its credit customers credit terms of 2/10,n/30.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 20

Sales of $350,000 and net sales of $323,000 could reflect sales discounts of $27,000.

Accepted Answer

A) True 
 B)False

Exam 5: Accounting for Merchandising Operations

Sales returns:

Sales less sales discounts less sales returns and allowances equals:

A merchandising company:

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

A single-step income statement includes cost of goods sold as another expense,and shows only one subtotal for total expenses.

FOB _________________ means the buyer accepts ownership when the goods depart the seller's place of business.The buyer is responsible for paying shipping costs and bears the risk of damage or loss when goods are in transit.

_____________ are non-operating activities that include interest expense,losses from asset disposals,and casualty losses.

Under both the periodic and perpetual inventory systems,the temporary account Purchases Returns and Allowances is used to accumulate the cost of all returns and allowances for a period.

Explain the difference between the single-step and multiple-step income statements.

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Inventory shrinkage can be computed by comparing the ___________ of inventory with recorded quantities and amounts.

An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:

A _____________________ income statement format shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

A company had a gross profit of $300,000 based on sales of $400,000.Its cost of goods sold equals $700,000.

Prepare journal entries to record the following merchandising transactions of Dean Company,which applies the perpetual inventory system.Dean Company offers all of its credit customers credit terms of 2/10,n/30.

Sales of $350,000 and net sales of $323,000 could reflect sales discounts of $27,000.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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