Question 1

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

Accepted Answer

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

Question 2

A company has a net income percentage of 27.3%.This means that the company makes a little over $0.27 on every dollar of sales.

Accepted Answer

A) True 
 B)False

Question 3

When a company repays the seller for shipping costs on an FOB shipping point transaction,which of the following is TRUE?

Accepted Answer

A) A purchase discount can still be taken net of the prepaid shipping charges. 
B) A purchase discount can still be taken on the gross amount of the invoice. 
C) A purchase discount cannot be taken when shipping charges are prepaid. 
D) The shipping costs do not affect the invoice value. 
A) A purchase discount can still be taken net of the prepaid shipping charges. 
B) A purchase discount can still be taken on the gross amount of the invoice. 
C) A purchase discount cannot be taken when shipping charges are prepaid. 
D) The shipping costs do not affect the invoice value.

Question 4

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%.

Accepted Answer

A) True 
 B)False

Question 5

Both purchase returns and allowances decrease the merchandiser's inventory cost.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would most likely cause the net income percentage to increase?

Accepted Answer

A) Cost of Goods Sold as a percentage of net sales increases. 
B) Operating expenses as a percentage of net sales increases. 
C) Gross profit as a percentage of net sales decreases. 
D) Operating expenses as a percentage of net sales decreases. 
A) Cost of Goods Sold as a percentage of net sales increases. 
B) Operating expenses as a percentage of net sales increases. 
C) Gross profit as a percentage of net sales decreases. 
D) Operating expenses as a percentage of net sales decreases.

Question 7

Woods Company had an inventory balance of $3,500 on January 1.During the accounting period they made purchases of $11,500.The ending inventory balance was $2,250.If Woods Co.uses the periodic inventory system,what is the cost of inventory sold during the period?

Accepted Answer

A) $11,500 
B) $12,750 
C) $15,000 
D) $17,250 
A) $11,500 
B) $12,750 
C) $15,000 
D) $17,250

Question 8

Which of the following is NOT a selling expense?

Accepted Answer

A) Advertising 
B) Salary of salesperson 
C) Utility bill 
D) Commissions 
A) Advertising 
B) Salary of salesperson 
C) Utility bill 
D) Commissions

Question 9

Most businesses today use the periodic inventory method.

Accepted Answer

A) True 
 B)False

Question 10

Most merchandising businesses prepare a single-step Income Statement.

Accepted Answer

A) True 
 B)False

Question 11

A useful tool that updates inventory is the:

Accepted Answer

A) cash register. 
B) bar code scanner. 
C) price tag on the merchandise. 
D) UPC number. 
A) cash register. 
B) bar code scanner. 
C) price tag on the merchandise. 
D) UPC number.

Question 12

Sales Returns and Allowances appear on the:

Accepted Answer

A) Balance Sheet. 
B) Statement of Retained Earnings. 
C) Income Statement. 
D) Income Statement and Balance Sheet. 
A) Balance Sheet. 
B) Statement of Retained Earnings. 
C) Income Statement. 
D) Income Statement and Balance Sheet.

Question 13

James,a customer,purchased $500 of merchandise from Haskins,Inc.Under the perpetual inventory system,Haskins,Inc.will record a:

Accepted Answer

A) debit to Accounts Receivable or to Cash for $500. 
B) credit to Accounts Receivable or to Cash for $500. 
C) credit to Cost of Goods Sold for $500. 
D) debit to Sales for $500. 
A) debit to Accounts Receivable or to Cash for $500. 
B) credit to Accounts Receivable or to Cash for $500. 
C) credit to Cost of Goods Sold for $500. 
D) debit to Sales for $500.

Question 14

TNT Inc.had an inventory balance of $21,000 on January 1,and $23,500 on December 31.The cost of goods sold during the period was $27,250.What is the purchase amount?

Accepted Answer

A) $2,500 
B) $3,750 
C) $29,750 
D) $31,000 
A) $2,500 
B) $3,750 
C) $29,750 
D) $31,000

Question 15

A company has net sales of $223,000,cost of goods sold $85,000,operating expenses of $54,000,and other expenses of $6,000.The company's net income is:

Accepted Answer

A) $31,000. 
B) $78,000. 
C) $84,000. 
D) $132,000. 
A) $31,000. 
B) $78,000. 
C) $84,000. 
D) $132,000.

Question 16

An invoice of $237.50 is dated April 2,terms 2/10,n/30.If the invoice is paid on April 9,the amount to be paid is:

Accepted Answer

A) $4.75. 
B) $23.75. 
C) $232.75. 
D) $237.50. 
A) $4.75. 
B) $23.75. 
C) $232.75. 
D) $237.50.

Question 17

A list of credit customers is called a(n):

Accepted Answer

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

Question 18

Debit card and credit card sales are counted as cash transactions.

Accepted Answer

A) True 
 B)False

Question 19

The name of the supplier (vendor)is listed in the:

Accepted Answer

A) Accounts Payable subsidiary ledger. 
B) Accounts Payable total. 
C) liabilities ledger. 
D) inventory ledger. 
A) Accounts Payable subsidiary ledger. 
B) Accounts Payable total. 
C) liabilities ledger. 
D) inventory ledger.

Question 20

When accounting for a merchandising business,which of the following is TRUE?

Accepted Answer

A) Wholesalers must use the periodic inventory system. 
B) Retailers must use the perpetual inventory system. 
C) Wholesalers must use the periodic inventory system;retailers may use either the perpetual or periodic inventory system. 
D) Retailers and wholesalers may use either the perpetual or periodic inventory system. 
A) Wholesalers must use the periodic inventory system. 
B) Retailers must use the perpetual inventory system. 
C) Wholesalers must use the periodic inventory system;retailers may use either the perpetual or periodic inventory system. 
D) Retailers and wholesalers may use either the perpetual or periodic inventory system.

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

A company has a net income percentage of 27.3%.This means that the company makes a little over $0.27 on every dollar of sales.

When a company repays the seller for shipping costs on an FOB shipping point transaction,which of the following is TRUE?

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%.

Both purchase returns and allowances decrease the merchandiser's inventory cost.

Which of the following would most likely cause the net income percentage to increase?

Woods Company had an inventory balance of $3,500 on January 1.During the accounting period they made purchases of $11,500.The ending inventory balance was $2,250.If Woods Co.uses the periodic inventory system,what is the cost of inventory sold during the period?

Which of the following is NOT a selling expense?

Most businesses today use the periodic inventory method.

Most merchandising businesses prepare a single-step Income Statement.

A useful tool that updates inventory is the:

Sales Returns and Allowances appear on the:

James,a customer,purchased $500 of merchandise from Haskins,Inc.Under the perpetual inventory system,Haskins,Inc.will record a:

TNT Inc.had an inventory balance of $21,000 on January 1,and $23,500 on December 31.The cost of goods sold during the period was $27,250.What is the purchase amount?

A company has net sales of $223,000,cost of goods sold $85,000,operating expenses of $54,000,and other expenses of $6,000.The company's net income is:

An invoice of $237.50 is dated April 2,terms 2/10,n/30.If the invoice is paid on April 9,the amount to be paid is:

A list of credit customers is called a(n):

Debit card and credit card sales are counted as cash transactions.

The name of the supplier (vendor)is listed in the:

When accounting for a merchandising business,which of the following is TRUE?

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 buyer pays all of the shipping and freight costs?

A company has a net income percentage of 27.3%.This means that the company makes a little over $0.27 on every dollar of sales.

When a company repays the seller for shipping costs on an FOB shipping point transaction,which of the following is TRUE?

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%.

Both purchase returns and allowances decrease the merchandiser's inventory cost.

Which of the following would most likely cause the net income percentage to increase?

Woods Company had an inventory balance of $3,500 on January 1.During the accounting period they made purchases of $11,500.The ending inventory balance was $2,250.If Woods Co.uses the periodic inventory system,what is the cost of inventory sold during the period?

Which of the following is NOT a selling expense?

Most businesses today use the periodic inventory method.

Most merchandising businesses prepare a single-step Income Statement.

A useful tool that updates inventory is the:

Sales Returns and Allowances appear on the:

James,a customer,purchased $500 of merchandise from Haskins,Inc.Under the perpetual inventory system,Haskins,Inc.will record a:

TNT Inc.had an inventory balance of $21,000 on January 1,and $23,500 on December 31.The cost of goods sold during the period was $27,250.What is the purchase amount?

A company has net sales of $223,000,cost of goods sold $85,000,operating expenses of $54,000,and other expenses of $6,000.The company's net income is:

An invoice of $237.50 is dated April 2,terms 2/10,n/30.If the invoice is paid on April 9,the amount to be paid is:

A list of credit customers is called a(n):

Debit card and credit card sales are counted as cash transactions.

The name of the supplier (vendor)is listed in the:

When accounting for a merchandising business,which of the following is TRUE?

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