Exam 5: Merchandising Operations

On November 1, 2012, Everett Janitorial Supply sold merchandise with a cost of $3,200 for $5,000, with terms FOB destination, and payment terms of 2/10, n/30. The company uses a perpetual inventory system. Give journal entries to record the sales revenue.

A company using the perpetual inventory system purchased inventory worth $25,000 on account with terms of 2/10, n/30. Defective inventory of $2,000 was returned 2 days later and the accounts were appropriately adjusted. If the invoice is paid within 10 days, the amount of the purchase discount that would be available to the company is:

Sales revenue of a merchandiser amounted to $20,000, sales returns and allowances amounted to $2,500, and sales discounts of $700. The merchandiser uses a perpetual inventory system. The first entry in the closing process would include:

A merchandiser uses a perpetual inventory system. The beginning Capital balance of a merchandiser was $100,000. During the year, sales revenue amounted to $75,000, sales returns and allowances were $1,000, sales discounts were $3,000, cost of goods sold was $40,000, and all other expenses totaled $10,000. The total withdrawals amounted to $25,000. The closing balance of Capital would be:

Even in a perpetual inventory system that updates the inventory account as and when transactions occur, the business must count inventory at least once in a year.

From the following details, calculate net sales revenue.

A merchandiser sold merchandise inventory on account. The journal entry to record sales allowances in the books of a merchandiser using the perpetual inventory system would be:

FOB destination refers to a situation where title to goods while in transit vests with the:

Delivery expense is a(n):

If purchase allowances are granted, the buyer need not return the goods to the seller.

Under the perpetual inventory system, what is the difference between a sales return and a sales allowance?

On a merchandising balance sheet, Merchandise Inventory is listed as a(n):

An invoice for an amount of $600 for merchandise purchased is showing 2/15, n/30 as terms of credit. If the invoice is paid on or before the fifteenth day, the amount to be paid is:

The loss of inventory that occurs because of theft, damage, and errors is referred to as inventory shrinkage.

The inventory account balance is $50,000. An actual count of inventory reveals that actual inventory is $43,000. Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system)

An adjusted trial balance of a merchandiser is given below. Provide journal entries to close the Income Summary account and the Smith, Withdrawals account.

Which of the following is true of the gross profit percentage?

The Sales Discounts account is a contra account to the:

The normal balances of Sales, Sales Discounts, and Sales Returns and Allowances are:

In a multi-step income statement, which of the following items is excluded from the calculation of operating income?