Question 1

Quick assets include cash,inventory,and current receivables.

Accepted Answer

A) True 
 B)False

Question 2

A company had sales and cost of goods sold of $350,000 and $200,000,respectively.Its gross profit equals $150,000.

Accepted Answer

A) True 
 B)False

Question 3

From the adjusted trial balance for Worker Products Company given below,prepare the necessary closing entries.

Accepted Answer

The answer of From the adjusted trial balance for Worker...

Question 4

What are the difference(s)between the periodic and the perpetual inventory systems?

Accepted Answer

Under a perpetual system each purchase,p

Question 5

Brig Company had $800,000 in net sales,$350,000 in gross profit,and $200,000 in operating expenses.Cost of goods sold equals:

Accepted Answer

A) $150,000. 
B) $450,000. 
C) $800,000. 
D) $350,000. 
E) $200,000. 
A) $150,000. 
B) $450,000. 
C) $800,000. 
D) $350,000. 
E) $200,000.

Question 6

Fill in the blanks (a)through (g)for the Hendricks Company for each of the income statements for 2012,2013,and 2014.

Accepted Answer

@#IMG-DLM& (a)2,770 + 375 - 2400 = 745
(b)375,the

Question 7

A company's current ratio is 1.2 and its quick ratio is 0.25.This company is probably an excellent credit risk because the ratios reveal no indication of liquidity problems.

Accepted Answer

A) True 
 B)False

Question 8

The Merchandise Inventory account balance at the end of the current period is equal to the amount of beginning merchandise inventory for the next period.

Accepted Answer

A) True 
 B)False

Question 9

A company's current assets were $17,980,its quick assets were $11,420 and its current liabilities were $12,190.Its quick ratio equals:

Accepted Answer

A) 0.94. 
B) 1.07. 
C) 1.48. 
D) 1.57. 
E) 2.40. 
A) 0.94. 
B) 1.07. 
C) 1.48. 
D) 1.57. 
E) 2.40.

Question 10

Delivery expense is reported as part of general and administrative expense in the seller's income statement.

Accepted Answer

A) True 
 B)False

Question 11

A buyer records the costs of shipping goods in a Delivery Expense,or transportation-out account when the buyer is responsible for these costs.

Accepted Answer

A) True 
 B)False

Question 12

A company has net sales and cost of goods sold of $752,000 and $543,000,respectively.Its net income is $17,530.The company's gross margin and operating expenses are ________ and ____________,respectively.

Accepted Answer

A) $209,000; $191,470 
B) $191,470; $209,000 
C) $525,470; $227,000 
D) $227,000; $525,470 
E) $734,000; $191,470 
A) $209,000; $191,470 
B) $191,470; $209,000 
C) $525,470; $227,000 
D) $227,000; $525,470 
E) $734,000; $191,470

Question 13

Purchase discounts are the same as trade discounts.

Accepted Answer

A) True 
 B)False

Question 14

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collections efforts.

Accepted Answer

A) True 
 B)False

Question 15

Harriet's Toy Shop had net sales of $852,000.The gross profit was $230,000.Calculate Harriet's cost of goods sold.

Accepted Answer

Cost of Goods Sold =

Question 16

The acid-test ratio differs from the current ratio in that:

Accepted Answer

A) Liabilities are divided by current assets. 
B) Prepaid expenses and inventory are excluded from the calculation of the acid-test ratio. 
C) The acid-test ratio measures profitability and the current ratio does not. 
D) The acid-test ratio excludes short-term investments from the calculation. 
E) The acid-test ratio is a measure of liquidity but the current ratio is not. 
A) Liabilities are divided by current assets. 
B) Prepaid expenses and inventory are excluded from the calculation of the acid-test ratio. 
C) The acid-test ratio measures profitability and the current ratio does not. 
D) The acid-test ratio excludes short-term investments from the calculation. 
E) The acid-test ratio is a measure of liquidity but the current ratio is not.

Question 17

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

Maia's Bike Shop uses the periodic inventory system and had the following transactions during the month of May:
   
Prepare the required journal entries that Maia's Bike Shop must make to record these transactions.

Accepted Answer

The answer of Maia's Bike Shop uses the periodic inventory...

Question 19

A trade discount is:

Accepted Answer

A) A term used by a purchaser to describe a cash discount given to customers for prompt payment. 
B) A reduction in price below the list price. 
C) A term used by a seller to describe a cash discount granted to customers for prompt payment. 
D) A reduction in price for prompt payment. 
E) Also called a rebate. 
A) A term used by a purchaser to describe a cash discount given to customers for prompt payment. 
B) A reduction in price below the list price. 
C) A term used by a seller to describe a cash discount granted to customers for prompt payment. 
D) A reduction in price for prompt payment. 
E) Also called a rebate.

Question 20

Expenses that support the overall operations of a business and include the expenses relating to accounting,human resource management,and financial management are called:

Accepted Answer

A) Cost of goods sold. 
B) Selling expenses. 
C) Purchasing expenses. 
D) General and administrative expenses. 
E) Non-operating activities. 
A) Cost of goods sold. 
B) Selling expenses. 
C) Purchasing expenses. 
D) General and administrative expenses. 
E) Non-operating activities.

Exam 5: Accounting for Merchandising Operations

Quick assets include cash,inventory,and current receivables.

A company had sales and cost of goods sold of $350,000 and $200,000,respectively.Its gross profit equals $150,000.

From the adjusted trial balance for Worker Products Company given below,prepare the necessary closing entries.

What are the difference(s)between the periodic and the perpetual inventory systems?

Brig Company had $800,000 in net sales,$350,000 in gross profit,and $200,000 in operating expenses.Cost of goods sold equals:

Fill in the blanks (a)through (g)for the Hendricks Company for each of the income statements for 2012,2013,and 2014.

A company's current ratio is 1.2 and its quick ratio is 0.25.This company is probably an excellent credit risk because the ratios reveal no indication of liquidity problems.

The Merchandise Inventory account balance at the end of the current period is equal to the amount of beginning merchandise inventory for the next period.

A company's current assets were $17,980,its quick assets were $11,420 and its current liabilities were $12,190.Its quick ratio equals:

Delivery expense is reported as part of general and administrative expense in the seller's income statement.

A buyer records the costs of shipping goods in a Delivery Expense,or transportation-out account when the buyer is responsible for these costs.

A company has net sales and cost of goods sold of $752,000 and $543,000,respectively.Its net income is $17,530.The company's gross margin and operating expenses are ________ and ____________,respectively.

Purchase discounts are the same as trade discounts.

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collections efforts.

Harriet's Toy Shop had net sales of $852,000.The gross profit was $230,000.Calculate Harriet's cost of goods sold.

The acid-test ratio differs from the current ratio in that:

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Maia's Bike Shop uses the periodic inventory system and had the following transactions during the month of May: Prepare the required journal entries that Maia's Bike Shop must make to record these transactions.

A trade discount is:

Expenses that support the overall operations of a business and include the expenses relating to accounting,human resource management,and financial management are called:

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

Filters

A company has net sales and cost of goods sold of $752,000 and $543,000,respectively.Its net income is $17,530.The company's gross margin and operating expenses are and ____,respectively.