Question 1

Which of the following indicates that the shipment is free on board and the seller pays all of the shipping and freight costs?

Accepted Answer

A) Cash on delivery 
B) FOB shipping 
C) FOB destination 
D) 2/10,n/30 
A) Cash on delivery 
B) FOB shipping 
C) FOB destination 
D) 2/10,n/30

Question 2

Kramer and Associates has the following account balances listed in alphabetical order: Accumulated Depreciation,$23,000;Accounts Payable,$8,500,Accounts Receivable,$12,000;Cash,$3,500;Equipment,$44,000,Land,$21,000,Mortgage Payable,$45,000;Prepaid Insurance,$7,500;Supplies,$2,000;Unearned Revenue,$6,000;Wages payable,$4,500.Kramer and Associates' current liabilities are:

Accepted Answer

A) $19,000. 
B) $58,000. 
C) $13,000. 
D) $64,000. 
A) $19,000. 
B) $58,000. 
C) $13,000. 
D) $64,000.

Question 3

Amazon.com,JCPenney.com,and Wal-Mart.com are examples of Internet:

Accepted Answer

A) service businesses. 
B) manufacturing businesses. 
C) retail businesses. 
D) wholesalers. 
A) service businesses. 
B) manufacturing businesses. 
C) retail businesses. 
D) wholesalers.

Question 4

An invoice with the credit terms 3/10,n/30 means that the customer has 3 days to take a 10% discount off of the invoice total.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Retailers may buy goods from the manufacturer and then sell the goods to consumers.

Accepted Answer

A) True 
 B)False

Question 7

FOB destination means that title passes at the time of shipment of the product to the buyer from the seller.

Accepted Answer

A) True 
 B)False

Question 8

If an invoice reads n/15,it means that:

Accepted Answer

A) the company has 15 days to pay the bill in full. 
B) the company has 15 days to take the discount. 
C) the company takes 15% off of the total of the invoice. 
D) the company pays 85% of the invoice. 
A) the company has 15 days to pay the bill in full. 
B) the company has 15 days to take the discount. 
C) the company takes 15% off of the total of the invoice. 
D) the company pays 85% of the invoice.

Question 9

Under the periodic inventory system,the amount of inventory is:

Accepted Answer

A) constantly updated. 
B) only known when a physical count is taken. 
C) adjusted after each sale. 
D) adjusted after each purchase. 
A) constantly updated. 
B) only known when a physical count is taken. 
C) adjusted after each sale. 
D) adjusted after each purchase.

Question 10

A low gross profit percentage means that:

Accepted Answer

A) the cost of goods sold was relatively low. 
B) the cost of goods sold was relatively high. 
C) selling expenses are very low. 
D) general and administrative expenses are very high. 
A) the cost of goods sold was relatively low. 
B) the cost of goods sold was relatively high. 
C) selling expenses are very low. 
D) general and administrative expenses are very high.

Question 11

When a customer returns goods,the merchandiser will NOT:

Accepted Answer

A) Decrease net sales revenue 
B) Decrease Cost of Goods Sold 
C) Increase Accounts Receivable 
D) Increase Inventory 
A) Decrease net sales revenue 
B) Decrease Cost of Goods Sold 
C) Increase Accounts Receivable 
D) Increase Inventory

Question 12

Randy,a customer of Classics Company,returned $45 of goods that were purchased on account.Under the perpetual inventory system,Classics will record a:

Accepted Answer

A) debit to Sales Returns and Allowances and a credit to Accounts Receivable-Randy for $45. 
B) debit to Sales and a credit to Accounts Receivable-Randy for $45. 
C) debit to Cost of Goods Sold and a credit to Inventory for $45. 
D) debit to Sales and a credit to Cost of Goods Sold for $45. 
A) debit to Sales Returns and Allowances and a credit to Accounts Receivable-Randy for $45. 
B) debit to Sales and a credit to Accounts Receivable-Randy for $45. 
C) debit to Cost of Goods Sold and a credit to Inventory for $45. 
D) debit to Sales and a credit to Cost of Goods Sold for $45.

Question 13

The General Store has cash sales for the week of $5,000 and credit sales of $3,500.The account(s)to be debited for these transactions is/are:

Accepted Answer

A) MasterCard sales;Visa sales;and cash. 
B) Cash;Accounts Receivable. 
C) Cash only. 
D) MasterCard sales;Visa sales. 
A) MasterCard sales;Visa sales;and cash. 
B) Cash;Accounts Receivable. 
C) Cash only. 
D) MasterCard sales;Visa sales.

Question 14

The entry to record the company's cost of selling merchandise under a perpetual inventory system would be a:

Accepted Answer

A) debit to Accounts Receivable and a credit to Sales. 
B) debit to Inventory and a credit to Cost of Goods Sold. 
C) debit to Cost of Goods Sold and a credit to Inventory. 
D) debit to Cost of Goods Sold and a credit to Sales. 
A) debit to Accounts Receivable and a credit to Sales. 
B) debit to Inventory and a credit to Cost of Goods Sold. 
C) debit to Cost of Goods Sold and a credit to Inventory. 
D) debit to Cost of Goods Sold and a credit to Sales.

Question 15

When a customer returns goods,the journal entry for a merchandiser using the perpetual inventory system will include a debit to Sales Returns and Allowances and a debit to Inventory.

Accepted Answer

A) True 
 B)False

Question 16

If a company has $115,000 net sales,$65,000 in gross profit,and $12,000 in net income,the net income percentage would be approximately 57%.

Accepted Answer

A) True 
 B)False

Question 17

Transferring title refers to a:

Accepted Answer

A) change of ownership. 
B) change of buyer. 
C) change of seller. 
D) legal document. 
A) change of ownership. 
B) change of buyer. 
C) change of seller. 
D) legal document.

Question 18

A company has net sales of $126,000,cost of goods sold of $72,000,operating expenses of $38,000,and other expenses of $3,000.The company's net income is:

Accepted Answer

A) $13,000. 
B) $54,000. 
C) $51,000. 
D) $16,000. 
A) $13,000. 
B) $54,000. 
C) $51,000. 
D) $16,000.

Question 19

A company uses the perpetual inventory system.At year end the general ledger indicated that this company had a balance of $50,000 in the Inventory account.Actual inventory on hand per a physical count was $51,500.What action does the company now need to take?

Accepted Answer

A) No action is needed;the difference between the ledger and actual is less than 5%. 
B) The company needs to debit Cost of Goods Sold and credit Inventory,$1,500. 
C) The company needs to debit Inventory and credit Cost of Goods Sold for $1,500. 
D) The company should debit the Purchases account and credit Cost of Goods Sold. 
A) No action is needed;the difference between the ledger and actual is less than 5%. 
B) The company needs to debit Cost of Goods Sold and credit Inventory,$1,500. 
C) The company needs to debit Inventory and credit Cost of Goods Sold for $1,500. 
D) The company should debit the Purchases account and credit Cost of Goods Sold.

Question 20

On the Balance Sheet,assets are listed in alphabetical order.

Accepted Answer

A) True 
 B)False

Which of the following indicates that the shipment is free on board and the seller pays all of the shipping and freight costs?

Amazon.com,JCPenney.com,and Wal-Mart.com are examples of Internet:

An invoice with the credit terms 3/10,n/30 means that the customer has 3 days to take a 10% discount off of the invoice total.

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

Retailers may buy goods from the manufacturer and then sell the goods to consumers.

FOB destination means that title passes at the time of shipment of the product to the buyer from the seller.

If an invoice reads n/15,it means that:

Under the periodic inventory system,the amount of inventory is:

A low gross profit percentage means that:

When a customer returns goods,the merchandiser will NOT:

Randy,a customer of Classics Company,returned $45 of goods that were purchased on account.Under the perpetual inventory system,Classics will record a:

The General Store has cash sales for the week of $5,000 and credit sales of $3,500.The account(s)to be debited for these transactions is/are:

The entry to record the company's cost of selling merchandise under a perpetual inventory system would be a:

When a customer returns goods,the journal entry for a merchandiser using the perpetual inventory system will include a debit to Sales Returns and Allowances and a debit to Inventory.

If a company has $115,000 net sales,$65,000 in gross profit,and $12,000 in net income,the net income percentage would be approximately 57%.

Transferring title refers to a:

A company has net sales of $126,000,cost of goods sold of $72,000,operating expenses of $38,000,and other expenses of $3,000.The company's net income is:

A company uses the perpetual inventory system.At year end the general ledger indicated that this company had a balance of $50,000 in the Inventory account.Actual inventory on hand per a physical count was $51,500.What action does the company now need to take?

On the Balance Sheet,assets are listed in alphabetical order.

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

Which of the following indicates that the shipment is free on board and the seller pays all of the shipping and freight costs?

Amazon.com,JCPenney.com,and Wal-Mart.com are examples of Internet:

An invoice with the credit terms 3/10,n/30 means that the customer has 3 days to take a 10% discount off of the invoice total.

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

Retailers may buy goods from the manufacturer and then sell the goods to consumers.

FOB destination means that title passes at the time of shipment of the product to the buyer from the seller.

If an invoice reads n/15,it means that:

Under the periodic inventory system,the amount of inventory is:

A low gross profit percentage means that:

When a customer returns goods,the merchandiser will NOT:

Randy,a customer of Classics Company,returned $45 of goods that were purchased on account.Under the perpetual inventory system,Classics will record a:

The General Store has cash sales for the week of $5,000 and credit sales of $3,500.The account(s)to be debited for these transactions is/are:

The entry to record the company's cost of selling merchandise under a perpetual inventory system would be a:

When a customer returns goods,the journal entry for a merchandiser using the perpetual inventory system will include a debit to Sales Returns and Allowances and a debit to Inventory.

If a company has $115,000 net sales,$65,000 in gross profit,and $12,000 in net income,the net income percentage would be approximately 57%.

Transferring title refers to a:

A company has net sales of $126,000,cost of goods sold of $72,000,operating expenses of $38,000,and other expenses of $3,000.The company's net income is:

A company uses the perpetual inventory system.At year end the general ledger indicated that this company had a balance of $50,000 in the Inventory account.Actual inventory on hand per a physical count was $51,500.What action does the company now need to take?

On the Balance Sheet,assets are listed in alphabetical order.

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