Question 1

Under the perpetual inventory system,Sales Returns cause:

Accepted Answer

A) an increase in Cost of Goods Sold. 
B) an increase in Revenue. 
C) a decrease in Cost of Goods Sold. 
D) no effect on cost of goods sold. 
A) an increase in Cost of Goods Sold. 
B) an increase in Revenue. 
C) a decrease in Cost of Goods Sold. 
D) no effect on cost of goods sold.

Question 2

The Cost of Goods Sold account appears on the:

Accepted Answer

A) Balance Sheet. 
B) Statement of Retained Earnings. 
C) Income Statement. 
D) post-closing trial balance. 
A) Balance Sheet. 
B) Statement of Retained Earnings. 
C) Income Statement. 
D) post-closing trial balance.

Question 3

Smith Company had an inventory balance of $12,000 on January 1 and $18,000 on December 31.The cost of goods sold during the period was $63,000.What is the purchase amount?

Accepted Answer

A) $6,000 
B) $33,000 
C) $66,000 
D) $69,000 
A) $6,000 
B) $33,000 
C) $66,000 
D) $69,000

Question 4

Which of the following is TRUE of gross profit?

Accepted Answer

A) The company will subtract taxes from this number to arrive at net profit or net loss. 
B) The company has this much money to pay for all other expenses,except taxes. 
C) The company has this much money to pay for all other expenses,including taxes. 
D) This number is the same as net income. 
A) The company will subtract taxes from this number to arrive at net profit or net loss. 
B) The company has this much money to pay for all other expenses,except taxes. 
C) The company has this much money to pay for all other expenses,including taxes. 
D) This number is the same as net income.

Question 5

The Statement of Retained Earnings for a merchandiser is prepared differently than that of a service business.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

A record to keep the amount owed to each supplier is called a(n):

Accepted Answer

A) Accounts Receivable subsidiary ledger. 
B) Accounts Payable subsidiary ledger. 
C) transportation ledger. 
D) general ledger for Accounts Payable. 
A) Accounts Receivable subsidiary ledger. 
B) Accounts Payable subsidiary ledger. 
C) transportation ledger. 
D) general ledger for Accounts Payable.

Question 8

Inventory for a merchandising business is classified as a(n):

Accepted Answer

A) liability. 
B) revenue. 
C) part of Stockholders' Equity. 
D) asset. 
A) liability. 
B) revenue. 
C) part of Stockholders' Equity. 
D) asset.

Question 9

Land is an example of a:

Accepted Answer

A) current asset. 
B) long-term asset. 
C) current liability. 
D) long-term liability. 
A) current asset. 
B) long-term asset. 
C) current liability. 
D) long-term liability.

Question 10

FOB means:

Accepted Answer

A) first on board. 
B) from our buyer. 
C) fee on board. 
D) free on board. 
A) first on board. 
B) from our buyer. 
C) fee on board. 
D) free on board.

Question 11

If damaged goods are received by the merchandiser and are kept with a reduction in price,the account to be credited by the merchandiser for the reduction in price under a perpetual inventory system is:

Accepted Answer

A) Inventory. 
B) Accounts Payable. 
C) Returns. 
D) Cash. 
A) Inventory. 
B) Accounts Payable. 
C) Returns. 
D) Cash.

Question 12

TNT Corporation pays an invoice for $350 in time to take a 3% discount.The journal entry to record the payment of this invoice is:

Accepted Answer

A) debit Accounts Payable $350;credit Cash $350. 
B) debit Accounts Payable $340;credit Cash $340. 
C) debit Accounts Payable $340,debit Inventory $10;credit Cash for $350. 
D) debit Accounts Payable $350;credit Inventory $10.50,credit Cash for $339.50. 
A) debit Accounts Payable $350;credit Cash $350. 
B) debit Accounts Payable $340;credit Cash $340. 
C) debit Accounts Payable $340,debit Inventory $10;credit Cash for $350. 
D) debit Accounts Payable $350;credit Inventory $10.50,credit Cash for $339.50.

Question 13

If an invoice shows a total of $5,000 with terms 5/15,n/60,which of the following is NOT a true statement?

Accepted Answer

A) The customer must pay $5,000 within 60 days after the date of the invoice. 
B) The customer may pay $4,750 within 15 days to satisfy the bill. 
C) The customer will receive a 10% discount if they pay within 60 days. 
D) The customer has a discount period of 15 days. 
A) The customer must pay $5,000 within 60 days after the date of the invoice. 
B) The customer may pay $4,750 within 15 days to satisfy the bill. 
C) The customer will receive a 10% discount if they pay within 60 days. 
D) The customer has a discount period of 15 days.

Question 14

The general public usually purchase merchandise from wholesalers.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) the cost principle. 
B) the reliability principle. 
C) the matching principle. 
D) none of the above. 
A) the cost principle. 
B) the reliability principle. 
C) the matching principle. 
D) none of the above.

Question 16

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

Accepted Answer

A) Amazon.com 
B) H & R Block 
C) Wal-Mart 
D) Target 
A) Amazon.com 
B) H & R Block 
C) Wal-Mart 
D) Target

Question 17

The account in which the revenue earned from the sale of merchandise is entered is:

Accepted Answer

A) Retained Earnings. 
B) Sales. 
C) Cash. 
D) Inventory. 
A) Retained Earnings. 
B) Sales. 
C) Cash. 
D) Inventory.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The inventory system that uses the merchandise inventory account as an asset account is called the:

Accepted Answer

A) periodic system. 
B) perpetual system. 
C) merchandising system. 
D) Both inventory systems use the merchandise inventory account as an asset. 
A) periodic system. 
B) perpetual system. 
C) merchandising system. 
D) Both inventory systems use the merchandise inventory account as an asset.

Question 20

Current assets are listed on the Balance Sheet in:

Accepted Answer

A) alphabetical order. 
B) order of liquidity. 
C) ascending order of value. 
D) descending order of value. 
A) alphabetical order. 
B) order of liquidity. 
C) ascending order of value. 
D) descending order of value.

Under the perpetual inventory system,Sales Returns cause:

The Cost of Goods Sold account appears on the:

Smith Company had an inventory balance of $12,000 on January 1 and $18,000 on December 31.The cost of goods sold during the period was $63,000.What is the purchase amount?

Which of the following is TRUE of gross profit?

The Statement of Retained Earnings for a merchandiser is prepared differently than that of a service business.

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

A record to keep the amount owed to each supplier is called a(n):

Inventory for a merchandising business is classified as a(n):

Land is an example of a:

FOB means:

If damaged goods are received by the merchandiser and are kept with a reduction in price,the account to be credited by the merchandiser for the reduction in price under a perpetual inventory system is:

TNT Corporation pays an invoice for $350 in time to take a 3% discount.The journal entry to record the payment of this invoice is:

If an invoice shows a total of $5,000 with terms 5/15,n/60,which of the following is NOT a true statement?

The general public usually purchase merchandise from wholesalers.

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

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

The account in which the revenue earned from the sale of merchandise is entered is:

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

The inventory system that uses the merchandise inventory account as an asset account is called the:

Current assets are listed on the Balance Sheet in:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 4: Accounting for a Merchandising Business

Under the perpetual inventory system,Sales Returns cause:

The Cost of Goods Sold account appears on the:

Smith Company had an inventory balance of $12,000 on January 1 and $18,000 on December 31.The cost of goods sold during the period was $63,000.What is the purchase amount?

Which of the following is TRUE of gross profit?

The Statement of Retained Earnings for a merchandiser is prepared differently than that of a service business.

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

A record to keep the amount owed to each supplier is called a(n):

Inventory for a merchandising business is classified as a(n):

Land is an example of a:

FOB means:

If damaged goods are received by the merchandiser and are kept with a reduction in price,the account to be credited by the merchandiser for the reduction in price under a perpetual inventory system is:

TNT Corporation pays an invoice for $350 in time to take a 3% discount.The journal entry to record the payment of this invoice is:

If an invoice shows a total of $5,000 with terms 5/15,n/60,which of the following is NOT a true statement?

The general public usually purchase merchandise from wholesalers.

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

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

The account in which the revenue earned from the sale of merchandise is entered is:

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

The inventory system that uses the merchandise inventory account as an asset account is called the:

Current assets are listed on the Balance Sheet in:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters