Question 1

Interest expense is an example of an expense classified under "other expense."

Accepted Answer

A) True 
 B)False  True

Question 2

Since merchandise inventory is normally sold within a year,how is it reported on the balance sheet?

Accepted Answer

A) As a revenue 
B) As the cost of merchandise sold 
C) It does not appear on the Balance Sheet 
D) As a current asset 
A) As a revenue 
B) As the cost of merchandise sold 
C) It does not appear on the Balance Sheet 
D) As a current asset D

Question 3

The credit terms of a sale are normally indicated on a(n):

Accepted Answer

A) purchase order. 
B) invoice. 
C) bill of lading. 
D) check. 
A) purchase order. 
B) invoice. 
C) bill of lading. 
D) check. B

Question 4

In credit terms of 1/10,n/30,the "1" represents the:

Accepted Answer

A) number of days in the discount period. 
B) full amount of the invoice. 
C) number of days when the entire amount is due. 
D) percent of the cash discount. 
A) number of days in the discount period. 
B) full amount of the invoice. 
C) number of days when the entire amount is due. 
D) percent of the cash discount.

Question 5

Which of the following should be shown on a statement of cash flows under the financing activity section?

Accepted Answer

A) The purchase of a long-term investment in the common stock of another company 
B) The payment of cash to retire a long-term note 
C) The proceeds from the sale of a building 
D) The issuance of a long-term note to acquire land 
A) The purchase of a long-term investment in the common stock of another company 
B) The payment of cash to retire a long-term note 
C) The proceeds from the sale of a building 
D) The issuance of a long-term note to acquire land

Question 6

If sales is $50,000 and cost of merchandise sold is $35,000,how much would be the markup percent?

Accepted Answer

A) 30.0% 
B) 70.0% 
C) 42.9% 
D) 14.3% 
A) 30.0% 
B) 70.0% 
C) 42.9% 
D) 14.3%

Question 7

Multiple-step income statements show:

Accepted Answer

A) gross profit but not net income. 
B) neither gross profit nor net income. 
C) gross profit but not cost of merchandise sold. 
D) gross profit,cost of merchandise sold,income from operations and net income. 
A) gross profit but not net income. 
B) neither gross profit nor net income. 
C) gross profit but not cost of merchandise sold. 
D) gross profit,cost of merchandise sold,income from operations and net income.

Question 8

Which of the following accounts will not be found in the Cost of Merchandise Sold section on the income statement?

Accepted Answer

A) Purchases 
B) Transportation In 
C) Sales Returns and Allowances 
D) Merchandise Inventory 
A) Purchases 
B) Transportation In 
C) Sales Returns and Allowances 
D) Merchandise Inventory

Question 9

Which financial statement reconciles net income with net cash flows from operating activities?

Accepted Answer

A) Balance sheet 
B) Statement of retained earnings 
C) Statement of cash flows 
D) Income statement 
A) Balance sheet 
B) Statement of retained earnings 
C) Statement of cash flows 
D) Income statement

Question 10

To determine cash payments for operating expenses for the cash flow statement using the direct method,a decrease in prepaid expenses is added to operating expenses other than depreciation.

Accepted Answer

A) True 
 B)False

Question 11

Refer to Surist,Inc.If Surist,Inc.had $30,000 in beginning inventory,and sold goods costing $180,000,what is the ending inventory balance?

Accepted Answer

A) $150,000 
B) $162,000 
C) $90,000 
D) $137,000 
A) $150,000 
B) $162,000 
C) $90,000 
D) $137,000

Question 12

Expenses that cannot be traced directly to operations are identified as:

Accepted Answer

A) other income. 
B) operating expenses. 
C) cost of goods sold. 
D) other expenses. 
A) other income. 
B) operating expenses. 
C) cost of goods sold. 
D) other expenses.

Question 13

Based on the information below,illustrate the effects on the accounts and financial statements of the Seller and the Buyer.Both use a perpetual inventory system.

Accepted Answer

(a)Seller Assets = Liabilities + Stockho

Question 14

In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.

Accepted Answer

A) True 
 B)False

Question 15

On the income statement,the merchandise inventory at the beginning of the period is added to sales to yield the cost of merchandise sold during the period.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following are subtracted from sales to arrive at net sales?

Accepted Answer

A) Sales returns 
B) Merchandise inventory 
C) Accounts receivable 
D) Cost of merchandise sold 
A) Sales returns 
B) Merchandise inventory 
C) Accounts receivable 
D) Cost of merchandise sold

Question 17

The merchandise inventory account is found on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

Office salaries,depreciation of office equipment,and office supplies are examples of what type of expense?

Accepted Answer

A) Selling expense 
B) Miscellaneous expense 
C) Administrative expense 
D) Other expense 
A) Selling expense 
B) Miscellaneous expense 
C) Administrative expense 
D) Other expense

Question 19

Which of the following is not an administrative expense?

Accepted Answer

A) Salespersons' salaries 
B) Office staff salaries 
C) Depreciation of office equipment 
D) Office supplies used 
A) Salespersons' salaries 
B) Office staff salaries 
C) Depreciation of office equipment 
D) Office supplies used

Question 20

Merchandise inventory shrinkage will increase Merchandise Inventory.

Accepted Answer

A) True 
 B)False

Interest expense is an example of an expense classified under "other expense."

Since merchandise inventory is normally sold within a year,how is it reported on the balance sheet?

The credit terms of a sale are normally indicated on a(n):

In credit terms of 1/10,n/30,the "1" represents the:

Which of the following should be shown on a statement of cash flows under the financing activity section?

If sales is $50,000 and cost of merchandise sold is $35,000,how much would be the markup percent?

Multiple-step income statements show:

Which of the following accounts will not be found in the Cost of Merchandise Sold section on the income statement?

Which financial statement reconciles net income with net cash flows from operating activities?

To determine cash payments for operating expenses for the cash flow statement using the direct method,a decrease in prepaid expenses is added to operating expenses other than depreciation.

Refer to Surist,Inc.If Surist,Inc.had $30,000 in beginning inventory,and sold goods costing $180,000,what is the ending inventory balance?

Expenses that cannot be traced directly to operations are identified as:

Based on the information below,illustrate the effects on the accounts and financial statements of the Seller and the Buyer.Both use a perpetual inventory system.

In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.

On the income statement,the merchandise inventory at the beginning of the period is added to sales to yield the cost of merchandise sold during the period.

Which of the following are subtracted from sales to arrive at net sales?

The merchandise inventory account is found on the balance sheet.

Office salaries,depreciation of office equipment,and office supplies are examples of what type of expense?

Which of the following is not an administrative expense?

Merchandise inventory shrinkage will increase Merchandise Inventory.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 4: Accounting for Merchandising Businesses

Interest expense is an example of an expense classified under "other expense."

Since merchandise inventory is normally sold within a year,how is it reported on the balance sheet?

The credit terms of a sale are normally indicated on a(n):

In credit terms of 1/10,n/30,the "1" represents the:

Which of the following should be shown on a statement of cash flows under the financing activity section?

If sales is $50,000 and cost of merchandise sold is $35,000,how much would be the markup percent?

Multiple-step income statements show:

Which of the following accounts will not be found in the Cost of Merchandise Sold section on the income statement?

Which financial statement reconciles net income with net cash flows from operating activities?

To determine cash payments for operating expenses for the cash flow statement using the direct method,a decrease in prepaid expenses is added to operating expenses other than depreciation.

Refer to Surist,Inc.If Surist,Inc.had $30,000 in beginning inventory,and sold goods costing $180,000,what is the ending inventory balance?

Expenses that cannot be traced directly to operations are identified as:

Based on the information below,illustrate the effects on the accounts and financial statements of the Seller and the Buyer.Both use a perpetual inventory system.

In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.

On the income statement,the merchandise inventory at the beginning of the period is added to sales to yield the cost of merchandise sold during the period.

Which of the following are subtracted from sales to arrive at net sales?

The merchandise inventory account is found on the balance sheet.

Office salaries,depreciation of office equipment,and office supplies are examples of what type of expense?

Which of the following is not an administrative expense?

Merchandise inventory shrinkage will increase Merchandise Inventory.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters