Question 1

A company's net sales revenue is $540,000.Its cost of goods sold is $360,000.Its gross profit percentage is:

Accepted Answer

A)  33.33%. 
B)  66.67%. 
C)  100%. 
D)  300%. 
A)  33.33%. 
B)  66.67%. 
C)  100%. 
D)  300%.

Question 2

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300.
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 3

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received within 10 days?

Accepted Answer

A)  The accounting entry would be an $800 debit to Cash and an $800 credit to Accounts receivable. 
B)  The accounting entry would be a $784 debit to Cash, a $16 debit to Sales discounts and an $800 credit to Accounts receivable. 
C)  The accounting entry would be a $16 debit to Sales discounts, an $800 debit to Cash and an $816 credit to Accounts receivable. 
D)  The accounting entry would be an $800 debit to Cash, a $16 credit to Sales discounts and a $784 credit to Accounts receivable. 
A)  The accounting entry would be an $800 debit to Cash and an $800 credit to Accounts receivable. 
B)  The accounting entry would be a $784 debit to Cash, a $16 debit to Sales discounts and an $800 credit to Accounts receivable. 
C)  The accounting entry would be a $16 debit to Sales discounts, an $800 debit to Cash and an $816 credit to Accounts receivable. 
D)  The accounting entry would be an $800 debit to Cash, a $16 credit to Sales discounts and a $784 credit to Accounts receivable.

Question 4

If a company,using a perpetual inventory system,purchases inventory on account,and later returns $200 of goods to the vendor,what entry would be made to record the return of goods to the vendor?

Accepted Answer

A)  $200 debit to Purchases and a $200 credit to Accounts payable 
B)  $200 debit to Accounts payable and a $200 credit to Inventory 
C)  $200 debit to Inventory and a $200 credit to Accounts payable 
D)  $200 debit to Accounts payable and a $200 credit to Purchases 
A)  $200 debit to Purchases and a $200 credit to Accounts payable 
B)  $200 debit to Accounts payable and a $200 credit to Inventory 
C)  $200 debit to Inventory and a $200 credit to Accounts payable 
D)  $200 debit to Accounts payable and a $200 credit to Purchases

Question 5

Net sales revenue is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

Accepted Answer

A) True 
 B)False

Question 6

In a perpetual inventory system,merchandise returned by the customer for a refund is called a:

Accepted Answer

A)  sales return. 
B)  sales allowance. 
C)  sales discount. 
D)  sales adjustment. 
A)  sales return. 
B)  sales allowance. 
C)  sales discount. 
D)  sales adjustment.

Question 7

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.Please provide the journal entry to record the receipt of payment from the customer.
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\hline \quad\quad\quad&\quad&\quad \
\hline \\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 8

Sales revenues were $20,000,Sales returns and allowances were $300,Sales discounts were $700,Cost of goods sold were $12,000,and all other expenses totaled $4,500.The third closing entry would include which of the following line items?

Accepted Answer

A)  Debit to Income summary of $2,500 
B)  Credit to Income summary of $2,500 
C)  Debit to Income summary of $19,000 
D)  Debit to Income summary of $16,500 
A)  Debit to Income summary of $2,500 
B)  Credit to Income summary of $2,500 
C)  Debit to Income summary of $19,000 
D)  Debit to Income summary of $16,500

Question 9

Referring to the following table,what is Operating income? $\begin{array}{|l|r|}
\hline\text { Sales revenue } & \$ 460,000 \
\hline \text { Cost of goods sold } & 300,000 \
\hline \text { Operating expenses } & 85,000 \
\hline \text { Sales discounts } & 20,000 \
\hline \text { Sales returns and allowances } & 15,000 \
\hline \text { Interest revenue } & 5,000\\hline
\end{array}$

Accepted Answer

A)  $40,000 
B)  $55,000 
C)  $160,000 
D)  $190,000 
A)  $40,000 
B)  $55,000 
C)  $160,000 
D)  $190,000

Question 10

FOB shipping point means that the:

Accepted Answer

A)  seller normally pays the transportation costs. 
B)  buyer normally pays the transportation costs. 
C)  buyer and the seller split the shipping costs. 
D)  shipping costs are billed to the seller. 
A)  seller normally pays the transportation costs. 
B)  buyer normally pays the transportation costs. 
C)  buyer and the seller split the shipping costs. 
D)  shipping costs are billed to the seller.

Question 11

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1.
-On February 2,Avery returned $400 of damaged goods to the supplier and was granted an allowance.How should Avery properly record the allowance?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 400 & \
\hline \text { Purchase returns and allowances } & & 400 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 9,600 & \
\hline \text { Purchase discounts } & 400 & \
\hline \text { Purchases } & & 10,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Cash } & & 9,600 \
\hline \text { Purchase returns and allowances } & & 400 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 400 & \
\hline \text { Cash } & & 400 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 400 & \
\hline \text { Purchase returns and allowances } & & 400 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 9,600 & \
\hline \text { Purchase discounts } & 400 & \
\hline \text { Purchases } & & 10,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Cash } & & 9,600 \
\hline \text { Purchase returns and allowances } & & 400 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 400 & \
\hline \text { Cash } & & 400 \
\hline
\end{array}$$

Question 12

A company uses the perpetual inventory method.To record a sale of merchandise on account will require an entry to record revenue and an entry to record cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 13

A company's net sales revenues are $1,000,000.Its cost of goods sold is $400,000.Which of the following is its gross profit percentage?

Accepted Answer

A)  40% 
B)  60% 
C)  167% 
D)  250% 
A)  40% 
B)  60% 
C)  167% 
D)  250%

Question 14

A company's net sales revenue is $20,000,000.Its cost of goods sold is $15,000,000.Its beginning inventory is $100,000,and its ending inventory is $200,000.Which of the following is its rate of inventory turnover?

Accepted Answer

A)  01 
B)  0.1 
C)  10 
D)  100 
A)  01 
B)  0.1 
C)  10 
D)  100

Question 15

The perpetual inventory system keeps a running record of inventory and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 16

The Income summary account has a $25,000 credit balance after the revenue and expense accounts have been closed.To which account is this balance closed?

Accepted Answer

A)  Drawing 
B)  Sales revenue 
C)  Cost of goods sold 
D)  Capital 
A)  Drawing 
B)  Sales revenue 
C)  Cost of goods sold 
D)  Capital

Question 17

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.
-
Please provide the journal entry on Aug.5.
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\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 18

When a company is purchasing inventory,and there are either returns or allowances for damaged goods,those amounts are recorded as a debit to the Sales returns and allowances account.

Accepted Answer

A) True 
 B)False

Question 19

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1.
-Avery paid the shipper $250 cash for freight in.How should Avery properly record the freight in?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Freight in } & 250 & \
\hline \text { Cash } & & 250 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 250 & \
\hline \text { Purchases } & & 250 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 250 & \
\hline \text { Cash } & & 250 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Freight in } & 250 & \
\hline \text { Accounts payable } & & 250 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Freight in } & 250 & \
\hline \text { Cash } & & 250 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 250 & \
\hline \text { Purchases } & & 250 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 250 & \
\hline \text { Cash } & & 250 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Freight in } & 250 & \
\hline \text { Accounts payable } & & 250 \
\hline
\end{array}$$

Question 20

A company's cost of goods sold is $1,000,000.Its average inventory is $100,000.Which of the following is its rate of inventory turnover?

Accepted Answer

A)  .01 
B)  .1 
C)  10 
D)  100 
A)  .01 
B)  .1 
C)  10 
D)  100

A company's net sales revenue is $540,000.Its cost of goods sold is $360,000.Its gross profit percentage is:

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300.

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received within 10 days?

If a company,using a perpetual inventory system,purchases inventory on account,and later returns $200 of goods to the vendor,what entry would be made to record the return of goods to the vendor?

Net sales revenue is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

In a perpetual inventory system,merchandise returned by the customer for a refund is called a:

Sales revenues were $20,000,Sales returns and allowances were $300,Sales discounts were $700,Cost of goods sold were $12,000,and all other expenses totaled $4,500.The third closing entry would include which of the following line items?

Referring to the following table,what is Operating 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

FOB shipping point means that the:

A company uses the perpetual inventory method.To record a sale of merchandise on account will require an entry to record revenue and an entry to record cost of goods sold.

A company's net sales revenues are $1,000,000.Its cost of goods sold is $400,000.Which of the following is its gross profit percentage?

A company's net sales revenue is $20,000,000.Its cost of goods sold is $15,000,000.Its beginning inventory is $100,000,and its ending inventory is $200,000.Which of the following is its rate of inventory turnover?

The perpetual inventory system keeps a running record of inventory and cost of goods sold.

The Income summary account has a $25,000 credit balance after the revenue and expense accounts have been closed.To which account is this balance closed?

When a company is purchasing inventory,and there are either returns or allowances for damaged goods,those amounts are recorded as a debit to the Sales returns and allowances account.

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1. -Avery paid the shipper $250 cash for freight in.How should Avery properly record the freight in?

A company's cost of goods sold is $1,000,000.Its average inventory is $100,000.Which of the following is its rate of inventory turnover?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 5: Merchandising Operations

A company's net sales revenue is $540,000.Its cost of goods sold is $360,000.Its gross profit percentage is:

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300.

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received within 10 days?

If a company,using a perpetual inventory system,purchases inventory on account,and later returns $200 of goods to the vendor,what entry would be made to record the return of goods to the vendor?

Net sales revenue is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

In a perpetual inventory system,merchandise returned by the customer for a refund is called a:

Sales revenues were $20,000,Sales returns and allowances were $300,Sales discounts were $700,Cost of goods sold were $12,000,and all other expenses totaled $4,500.The third closing entry would include which of the following line items?

Referring to the following table,what is Operating 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

FOB shipping point means that the:

A company uses the perpetual inventory method.To record a sale of merchandise on account will require an entry to record revenue and an entry to record cost of goods sold.

A company's net sales revenues are $1,000,000.Its cost of goods sold is $400,000.Which of the following is its gross profit percentage?

A company's net sales revenue is $20,000,000.Its cost of goods sold is $15,000,000.Its beginning inventory is $100,000,and its ending inventory is $200,000.Which of the following is its rate of inventory turnover?

The perpetual inventory system keeps a running record of inventory and cost of goods sold.

The Income summary account has a $25,000 credit balance after the revenue and expense accounts have been closed.To which account is this balance closed?

When a company is purchasing inventory,and there are either returns or allowances for damaged goods,those amounts are recorded as a debit to the Sales returns and allowances account.

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1. -Avery paid the shipper $250 cash for freight in.How should Avery properly record the freight in?

A company's cost of goods sold is $1,000,000.Its average inventory is $100,000.Which of the following is its rate of inventory turnover?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters