Exam 5: Merchandising Operations

The periodic inventory system is normally used for relatively inexpensive goods.

A company uses the perpetual inventory method.Which of the following entries would be made to record a purchase of inventory on account?

Baltic Supplies provides the worksheet shown below at the end of the year. A count of the physical inventory at year end shows that there is actually $11,000 of inventory left.Assuming this is the only adjusting entry needed at year-end,please post the inventory adjustment to the worksheet and update the adjusted trial balance.Then complete the worksheet.

What is the difference between a sales return and a sales allowance?

Which of the following is GENERALLY a merchandiser's major cost?

Which of the following accounts is used ONLY at the close of the merchandising cycle?

Please refer to the following trial balance. Debit Credit Cash \ 5,000 Accounts receivable 14,000 Inventory 20,000 Supplies 5,000 Land 100,000 Accounts payable \ 3,000 Notes payable 25,000 Capital 90,000 Drawing 1,000 Sales revenues 160,000 Sales returns and allowances 2,000 Sales discounts 3,000 Cost of goods sold 80,000 Salary expense 5,000 Utility expense 23,000 Rent expense 18,000 Interest expense 2,000 Totals \ 278,000 \ 278,000 -How much is the Gross profit percentage?

Referring to the following table,what is the Net income? Sales revenue \ 460,000 Cost of goods sold 300,000 Operating expenses 85,000 Sales discounts 20,000 Sales returns and allowances 15,000 Interest revenue 5,000

Which of the following means that the shipment is free on board at the point of shipment and the buyer pays all shipping costs?

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200. -Please provide the journal entry to record Sales revenue.

With a periodic inventory method,it is necessary to conduct a physical count of inventory to determine cost of goods sold.

If a company uses the periodic inventory method,which of the following is subtracted from Purchases to arrive at Net purchases?

What is freight out?

Which of the following is NOT shown on a single-step income statement?

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.Everett paid transportation costs of $100.On November 6,2012,merchandise of $1,000 from the November 1 sale was returned.The returned merchandise had cost $600.Everett received payment for the balance of the sale on November 10,2012. -If this were the only sales transaction of the period,what amount of Gross profit would be shown on the income statement?

A high rate of inventory turnover indicates which of the following?

A company that uses the perpetual inventory method purchases inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in. -The company then returned $200 of damaged goods and got an allowance from the vendor.The company paid the vendor 8 days after the sale.Assuming this was the only transaction affecting inventory,and that there was no beginning balance,what would the cost basis of the inventory be?

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance. -On April 10,Michelin received payment from the customer.If this were the only transaction for the period,what amount would be shown on the income statement for Gross profit?

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance. -On April 10,Michelin received payment from the customer.If this were the only transaction for the period,what amount would be shown on the income statement for Net sales revenue?