Exam 4: Accounting for Merchandising Businesses

Under the indirect method for preparing the statement of cash flows,decreases in current assets are net income in the cash flows from operating activities section.

(Multiple Choice)

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Question 81

For a merchandising firm,the inventory sold is shown on the income statement as:

(Multiple Choice)

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Question 82

Freight in is the amount paid by the seller to deliver merchandise sold to a customer.

(True/False)

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Question 83

Merchandise is ordered on November 12; the merchandise is shipped by the seller and the invoice is prepared,dated,and mailed by the seller on November 15; the merchandise is received by the buyer on November 17; the transaction is recorded in the seller's accounts on November 15.If the credit terms are 1/10,n/30,the discount period begins with what date?

(Multiple Choice)

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Question 84

Which of the following businesses is a merchandising business?

(Multiple Choice)

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Question 85

A payment of dividends decreases which section on the statement of cash flows?

(Multiple Choice)

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Question 86

Cash paid to purchase long-term investments would be reported in the statement of cash flows in:

(Multiple Choice)

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Question 87

In a multiple-step income statement,sales will be reduced by sales discounts and sales returns and allowances to arrive at net sales.

(True/False)

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Question 88

Inventory shortage is recorded when:

(Multiple Choice)

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Question 89

The effect of a sales return and allowance is a reduction in sales revenue and a decrease in cash or accounts receivable.

(True/False)

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Question 90

Merchandise is sold for $2,500,terms FOB destination,2/10,n/30,with transportation costs of $150.If $500 of the merchandise is returned prior to payment and the invoice is paid within the discount period,the amount of the sales discount is $40.

(True/False)

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Question 91

When the terms of sale are FOB shipping point,the buyer should pay the transportation charges.

(True/False)

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Question 92

Merchandise inventory shrinkage will decrease Retained Earnings.

(True/False)

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Question 93

Gross profit percent is calculated by dividing gross profit by net sales.

(True/False)

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Question 94

Net income or loss may appear on the income statement of both a service business and a merchandising business.

(True/False)

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Question 95

Using a perpetual inventory system,the purchase of $30,000 of merchandise on account would include a(n):

(Multiple Choice)

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Question 96

Which expenses are subtracted from gross profit to arrive at income from operations?

(Multiple Choice)

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Question 97

Selected data from the ledger of Jones Co.after adjustment at June 30,the end of the fiscal year,are listed as follows:

(Essay)

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Question 98

On the income statement in the single-step form,the total of all expenses is deducted from the total of all revenues.

(True/False)

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Question 99

What is one criticism of the single-step income statement?

(Multiple Choice)

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Question 100

Showing 81 - 100 of 145

Under the indirect method for preparing the statement of cash flows,decreases in current assets are net income in the cash flows from operating activities section.

For a merchandising firm,the inventory sold is shown on the income statement as:

Freight in is the amount paid by the seller to deliver merchandise sold to a customer.

Which of the following businesses is a merchandising business?

A payment of dividends decreases which section on the statement of cash flows?

Cash paid to purchase long-term investments would be reported in the statement of cash flows in:

In a multiple-step income statement,sales will be reduced by sales discounts and sales returns and allowances to arrive at net sales.

Inventory shortage is recorded when:

The effect of a sales return and allowance is a reduction in sales revenue and a decrease in cash or accounts receivable.

Merchandise is sold for $2,500,terms FOB destination,2/10,n/30,with transportation costs of $150.If $500 of the merchandise is returned prior to payment and the invoice is paid within the discount period,the amount of the sales discount is $40.

When the terms of sale are FOB shipping point,the buyer should pay the transportation charges.

Merchandise inventory shrinkage will decrease Retained Earnings.

Gross profit percent is calculated by dividing gross profit by net sales.

Net income or loss may appear on the income statement of both a service business and a merchandising business.

Using a perpetual inventory system,the purchase of $30,000 of merchandise on account would include a(n):

Which expenses are subtracted from gross profit to arrive at income from operations?

Selected data from the ledger of Jones Co.after adjustment at June 30,the end of the fiscal year,are listed as follows:

On the income statement in the single-step form,the total of all expenses is deducted from the total of all revenues.

What is one criticism of the single-step income statement?

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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