Exam 5: Merchandising Operations

Avery Supplies uses a periodic inventory system.Please refer to the following data: Beginning inventory \ 3,000 Ending inventory 2,100 Purchases 24,000 Purchase discounts 800 Purchase returns \& allowances 1,200 Freight in 4,200 - How much is Cost of goods sold?

Which of the following is subtracted from Net sales revenue to arrive at Gross profit?

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Which of the following entries would be made to record the payment if it is made 20 days later?

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.

Purchase returns and allowances decrease the net amount of cash that will be paid for the inventory,and so they should reduce the cost of the inventory as recorded in the Inventory account.

When a company ships goods to a customer and pays for freight out,how is that cost recorded?

In a multi-step income statement,Interest revenue and expense are NOT included in Operating income.

In the credit terms of 2/10,n/30,what does the 2/10 mean?

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Which of the following entries would be made to record the payment if it is made within 10 days?

With a periodic inventory method,purchases,purchase discounts,and purchase returns and allowances are recorded in separate accounts.

Oscar's Packaging shipped goods to a customer and paid the freight out of $400 in cash.Please provide the journal entry for the payment of freight out.

Which of the following correctly describes the gross profit percentage?

Beginning inventory is $42,000 and Ending inventory is $58,000.Cost of goods sold is $600,000.How much is the inventory turnover?

An invoice in the amount of $600.00 for merchandise purchased is shown with a 4/10,n/30 discount.To get the discount,the amount to pay on or before the tenth day is:

The terms on an invoice are 3/10,n/25.This means that a:

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 22,Michelin received payment from the customer.How much cash was received from the customer?

If a physical count of inventory indicates that the Inventory account is overstated,an additional adjusting entry is required.

Which of the following assets does a merchandising company-but NOT a service company-need?

A company purchased inventory for $2,200 on account,and recorded the following journal entry: Inventory 2,200 Accounts payable 2,200 The vendor's invoice showed terms of 3/10,n/30.Please provide the journal entry for the payment of the invoice on the 17th day (using the perpetual inventory method).

A purchase return of goods purchased on credit is recorded by the purchasing company as a debit to what account?