Question 1

When merchandise is purchased on account under the perpetual inventory system,the journal entry is:

Accepted Answer

A) debit Purchases and credit Accounts Payable. 
B) debit Accounts Payable and credit Inventory. 
C) debit Inventory and credit Accounts Payable. 
D) debit Accounts Payable and credit Purchases. 
A) debit Purchases and credit Accounts Payable. 
B) debit Accounts Payable and credit Inventory. 
C) debit Inventory and credit Accounts Payable. 
D) debit Accounts Payable and credit Purchases.

Question 2

A customer purchased items on account from Santorini,Inc.After a few days,the customer returned the goods.Santorini,Inc.will issue a:

Accepted Answer

A) debit memorandum. 
B) return receipt. 
C) credit memorandum. 
D) refund check. 
A) debit memorandum. 
B) return receipt. 
C) credit memorandum. 
D) refund check.

Question 3

TLR Productions has received an invoice for $4500 with terms of 3/15,n/50.If TLR pays the invoice on the seventeenth day,the Cash account will be:

Accepted Answer

A) credited for $4,500. 
B) credited for $4,365. 
C) debited for $4,365. 
D) credited for $135. 
A) credited for $4,500. 
B) credited for $4,365. 
C) debited for $4,365. 
D) credited for $135.

Question 4

Net income is generally referred to as the company's "bottom line."

Accepted Answer

A) True 
 B)False

Question 5

Under a perpetual inventory system,when goods are returned to the retailer from a customer:

Accepted Answer

A) Cost of Goods Sold is debited;Sales Returns and Allowances is credited. 
B) Sales Returns and Allowances is debited;Cost of Goods Sold is credited. 
C) Sales is debited;Cost Goods Sold is credited. 
D) Inventory is debited;Sales is credited. 
A) Cost of Goods Sold is debited;Sales Returns and Allowances is credited. 
B) Sales Returns and Allowances is debited;Cost of Goods Sold is credited. 
C) Sales is debited;Cost Goods Sold is credited. 
D) Inventory is debited;Sales is credited.

Question 6

Caesar Company returned $750 of goods it had purchased from another company.The original invoice was for $4,200,3/10,n/30.What is the discount if Caesar pays the balance within the discount period?

Accepted Answer

A) $126.00 
B) $103.50 
C) $22.50 
D) $0.00 
A) $126.00 
B) $103.50 
C) $22.50 
D) $0.00

Question 7

Costs of Goods Sold includes which of the following?

Accepted Answer

A) The actual cost of the item 
B) Administrative fees 
C) Management salaries 
D) Depreciation Expense 
A) The actual cost of the item 
B) Administrative fees 
C) Management salaries 
D) Depreciation Expense

Question 8

Merchandise returned by the customer for a cash refund is called a:

Accepted Answer

A) sales return. 
B) sales allowance. 
C) debit memorandum. 
D) credit memorandum. 
A) sales return. 
B) sales allowance. 
C) debit memorandum. 
D) credit memorandum.

Question 9

Merchandise is sold FOB shipping point.If the seller prepays the delivery costs and adds them to the customer's invoice,the entry the seller must prepare,will:

Accepted Answer

A) debit Cash and credit Inventory. 
B) debit Inventory and credit Cash. 
C) debit Delivery Expense and credit Cash. 
D) debit Accounts Receivable and credit Cash. 
A) debit Cash and credit Inventory. 
B) debit Inventory and credit Cash. 
C) debit Delivery Expense and credit Cash. 
D) debit Accounts Receivable and credit Cash.

Question 10

What is liquidity?

Accepted Answer

A) Liquidity is gross profit minus operating expenses. 
B) Liquidity is a shipping term that applies to freight sent by boat. 
C) Liquidity is the ability to convert an asset to cash quickly. 
D) Liquidity is a measure of the fragility of certain types of inventory. 
A) Liquidity is gross profit minus operating expenses. 
B) Liquidity is a shipping term that applies to freight sent by boat. 
C) Liquidity is the ability to convert an asset to cash quickly. 
D) Liquidity is a measure of the fragility of certain types of inventory.

Question 11

A buyer debits the shipping charges that they pay for merchandise purchased to inventory.

Accepted Answer

A) True 
 B)False

Question 12

The discount period is determined by the:

Accepted Answer

A) seller of the merchandise. 
B) purchaser of the merchandise. 
C) customer. 
D) amount of the invoice. 
A) seller of the merchandise. 
B) purchaser of the merchandise. 
C) customer. 
D) amount of the invoice.

Question 13

Wages Payable,Income Taxes Payable and Accounts Payable are:

Accepted Answer

A) long-term liabilities. 
B) long-term assets. 
C) short-term liabilities. 
D) short-term assets. 
A) long-term liabilities. 
B) long-term assets. 
C) short-term liabilities. 
D) short-term assets.

Question 14

A journal entry that has more than one debit or more than one credit is known as a complex journal entry.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would NOT be classified as a service business?

Accepted Answer

A) Graham's Lawn Mowing 
B) Tonya's Tax Service 
C) Rick's Pet Walking 
D) Charla's Fashion Boutique 
A) Graham's Lawn Mowing 
B) Tonya's Tax Service 
C) Rick's Pet Walking 
D) Charla's Fashion Boutique

Question 16

A company has net sales of $56,700 and a cost of goods sold of $26,700.The company's gross profit percentage is approximately:

Accepted Answer

A) 52.9%. 
B) 47.1%. 
C) 89.0%. 
D) 189%. 
A) 52.9%. 
B) 47.1%. 
C) 89.0%. 
D) 189%.

Question 17

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 gross profit 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 18

A company's gross profit percentage increased from 37% to 41%.What does this mean?

Accepted Answer

A) This means that cost of goods sold as a percentage of net sales increased. 
B) This means that cost of goods sold as a percentage of net sales decreased. 
C) This means that operating expenses as a percentage of net sales decreased. 
D) There is not enough information to explain the increase. 
A) This means that cost of goods sold as a percentage of net sales increased. 
B) This means that cost of goods sold as a percentage of net sales decreased. 
C) This means that operating expenses as a percentage of net sales decreased. 
D) There is not enough information to explain the increase.

Question 19

Depreciation on the company warehouse is an example of a(n):

Accepted Answer

A) inventory expense. 
B) asset expense. 
C) selling expense. 
D) delivery expense. 
A) inventory expense. 
B) asset expense. 
C) selling expense. 
D) delivery expense.

Question 20

Under the perpetual inventory system,which of the following T-accounts correctly shows the cost flows through the Inventory account?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

When merchandise is purchased on account under the perpetual inventory system,the journal entry is:

A customer purchased items on account from Santorini,Inc.After a few days,the customer returned the goods.Santorini,Inc.will issue a:

TLR Productions has received an invoice for $4500 with terms of 3/15,n/50.If TLR pays the invoice on the seventeenth day,the Cash account will be:

Net income is generally referred to as the company's "bottom line."

Under a perpetual inventory system,when goods are returned to the retailer from a customer:

Caesar Company returned $750 of goods it had purchased from another company.The original invoice was for $4,200,3/10,n/30.What is the discount if Caesar pays the balance within the discount period?

Costs of Goods Sold includes which of the following?

Merchandise returned by the customer for a cash refund is called a:

Merchandise is sold FOB shipping point.If the seller prepays the delivery costs and adds them to the customer's invoice,the entry the seller must prepare,will:

What is liquidity?

A buyer debits the shipping charges that they pay for merchandise purchased to inventory.

The discount period is determined by the:

Wages Payable,Income Taxes Payable and Accounts Payable are:

A journal entry that has more than one debit or more than one credit is known as a complex journal entry.

Which of the following would NOT be classified as a service business?

A company has net sales of $56,700 and a cost of goods sold of $26,700.The company's gross profit percentage is approximately:

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 gross profit is:

A company's gross profit percentage increased from 37% to 41%.What does this mean?

Depreciation on the company warehouse is an example of a(n):

Under the perpetual inventory system,which of the following T-accounts correctly shows the cost flows through the Inventory account?

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

Exam 4: Accounting for a Merchandising Business

When merchandise is purchased on account under the perpetual inventory system,the journal entry is:

A customer purchased items on account from Santorini,Inc.After a few days,the customer returned the goods.Santorini,Inc.will issue a:

TLR Productions has received an invoice for $4500 with terms of 3/15,n/50.If TLR pays the invoice on the seventeenth day,the Cash account will be:

Net income is generally referred to as the company's "bottom line."

Under a perpetual inventory system,when goods are returned to the retailer from a customer:

Caesar Company returned $750 of goods it had purchased from another company.The original invoice was for $4,200,3/10,n/30.What is the discount if Caesar pays the balance within the discount period?

Costs of Goods Sold includes which of the following?

Merchandise returned by the customer for a cash refund is called a:

Merchandise is sold FOB shipping point.If the seller prepays the delivery costs and adds them to the customer's invoice,the entry the seller must prepare,will:

What is liquidity?

A buyer debits the shipping charges that they pay for merchandise purchased to inventory.

The discount period is determined by the:

Wages Payable,Income Taxes Payable and Accounts Payable are:

A journal entry that has more than one debit or more than one credit is known as a complex journal entry.

Which of the following would NOT be classified as a service business?

A company has net sales of $56,700 and a cost of goods sold of $26,700.The company's gross profit percentage is approximately:

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 gross profit is:

A company's gross profit percentage increased from 37% to 41%.What does this mean?

Depreciation on the company warehouse is an example of a(n):

Under the perpetual inventory system,which of the following T-accounts correctly shows the cost flows through the Inventory account?

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