Question 1

Which of the following accounts has a normal credit balance?

Accepted Answer

A) Accounts Receivable 
B) Sales 
C) Merchandise Inventory 
D) Delivery Expense 
A) Accounts Receivable 
B) Sales 
C) Merchandise Inventory 
D) Delivery Expense B

Question 2

Which of the following items would not affect the cost of merchandise inventory acquired during the period?

Accepted Answer

A) quantity discounts 
B) sales discounts 
C) freight-in 
D) sales commissions 
A) quantity discounts 
B) sales discounts 
C) freight-in 
D) sales commissions D

Question 3

There is no difference between the recording of cash sales and the recording of MasterCard or VISA sales.

Accepted Answer

A) True 
 B)False  True

Question 4

The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 5

In the merchandising income statement,sales will be reduced by administrative expenses to arrive at operating income.

Accepted Answer

A) True 
 B)False

Question 6

Prepare a multiple-step income statement for Armstrong Co.from the following data for the year ended December 31.
Sales,$755,000; cost of merchandise sold,$330,000; administrative expenses,$35,000; interest expense,$30,000; rent revenue,$25,000; selling expenses,$50,000.

Accepted Answer

None

Question 7

When merchandise is sold for $600 plus 6% sales tax,the Sales account should be credited for $636.

Accepted Answer

A) True 
 B)False

Question 8

Freight-in is considered a cost of purchasing inventory.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The form of the balance sheet in which assets,liabilities,and stockholders' equity are presented in a downward sequence is called the report form.

Accepted Answer

A) True 
 B)False

Question 11

Gadget Palace is a retailer selling unique hardware.Gadget Palace uses a perpetual inventory system.Journalize the following transactions:
On July 5,Gadget Palace purchases inventory for sale from Turbo Tools for $11,400.00 with terms 2/10,n/30.
On July 6,Gadget Palace pays Fast Truck Transport $75.00 for freight-in on the July 5 order.
On July 8,Gadget Palace receives a credit memo from Turbo Tools for $215.00 for damaged merchandise.
On July 15,Gadget Palace pays Turbo Tools the balance due.

Accepted Answer

None

Question 12

Using a perpetual inventory system,the entry to record the purchase of $30,000 of merchandise on account would include a

Accepted Answer

A) debit to Accounts Payable 
B) debit to Merchandise Inventory 
C) credit to Merchandise Inventory 
D) credit to Sales 
A) debit to Accounts Payable 
B) debit to Merchandise Inventory 
C) credit to Merchandise Inventory 
D) credit to Sales

Question 13

A seller may grant a buyer a reduction in selling price and this is called a customer discount.

Accepted Answer

A) True 
 B)False

Question 14

Sales to customers who use bank credit cards,such as MasterCard and Visa,are generally treated as

Accepted Answer

A) sales on account 
B) sales returns 
C) cash sales 
D) sales when the credit card company remits the cash 
A) sales on account 
B) sales returns 
C) cash sales 
D) sales when the credit card company remits the cash

Question 15

In a multiple-step income statement,the dollar amount for income from operations is always the same as net income.

Accepted Answer

A) True 
 B)False

Question 16

Merchandise is sold for cash.The selling price of the merchandise is $6,000 and the sale is subject to a 7% state sales tax.The journal entry to record the sale would include a credit to

Accepted Answer

A) cash for $6,000 
B) sales for $6,240 
C) sales tax payable for $420 
D) sales for $5,580 
A) cash for $6,000 
B) sales for $6,240 
C) sales tax payable for $420 
D) sales for $5,580

Question 17

Based upon the following data for a business with a periodic inventory system,determine the cost of merchandise sold for August.

Accepted Answer

Cost of me

Question 18

Merchandise subject to terms 2/10,n/30,FOB shipping point,is sold on account to a customer for $25,000.What is the amount of the sales discount allowable?

Accepted Answer

A) $260 
B) $500 
C) $460 
D) $150 
A) $260 
B) $500 
C) $460 
D) $150

Question 19

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 20

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

Accepted Answer

A) consigned 
B) n/30 
C) FOB shipping point 
D) FOB destination 
A) consigned 
B) n/30 
C) FOB shipping point 
D) FOB destination

Which of the following accounts has a normal credit balance?

Which of the following items would not affect the cost of merchandise inventory acquired during the period?

There is no difference between the recording of cash sales and the recording of MasterCard or VISA sales.

The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be

In the merchandising income statement,sales will be reduced by administrative expenses to arrive at operating income.

Prepare a multiple-step income statement for Armstrong Co.from the following data for the year ended December 31. Sales,$755,000; cost of merchandise sold,$330,000; administrative expenses,$35,000; interest expense,$30,000; rent revenue,$25,000; selling expenses,$50,000.

When merchandise is sold for $600 plus 6% sales tax,the Sales account should be credited for $636.

Freight-in is considered a cost of purchasing inventory.

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

The form of the balance sheet in which assets,liabilities,and stockholders' equity are presented in a downward sequence is called the report form.

Using a perpetual inventory system,the entry to record the purchase of $30,000 of merchandise on account would include a

A seller may grant a buyer a reduction in selling price and this is called a customer discount.

Sales to customers who use bank credit cards,such as MasterCard and Visa,are generally treated as

In a multiple-step income statement,the dollar amount for income from operations is always the same as net income.

Merchandise is sold for cash.The selling price of the merchandise is $6,000 and the sale is subject to a 7% state sales tax.The journal entry to record the sale would include a credit to

Based upon the following data for a business with a periodic inventory system,determine the cost of merchandise sold for August.

Merchandise subject to terms 2/10,n/30,FOB shipping point,is sold on account to a customer for $25,000.What is the amount of the sales discount allowable?

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 5: Accounting for Merchandising Businesses

Which of the following accounts has a normal credit balance?

Which of the following items would not affect the cost of merchandise inventory acquired during the period?

There is no difference between the recording of cash sales and the recording of MasterCard or VISA sales.

The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be

In the merchandising income statement,sales will be reduced by administrative expenses to arrive at operating income.

Prepare a multiple-step income statement for Armstrong Co.from the following data for the year ended December 31. Sales,$755,000; cost of merchandise sold,$330,000; administrative expenses,$35,000; interest expense,$30,000; rent revenue,$25,000; selling expenses,$50,000.

When merchandise is sold for $600 plus 6% sales tax,the Sales account should be credited for $636.

Freight-in is considered a cost of purchasing inventory.

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

The form of the balance sheet in which assets,liabilities,and stockholders' equity are presented in a downward sequence is called the report form.

Using a perpetual inventory system,the entry to record the purchase of $30,000 of merchandise on account would include a

A seller may grant a buyer a reduction in selling price and this is called a customer discount.

Sales to customers who use bank credit cards,such as MasterCard and Visa,are generally treated as

In a multiple-step income statement,the dollar amount for income from operations is always the same as net income.

Merchandise is sold for cash.The selling price of the merchandise is $6,000 and the sale is subject to a 7% state sales tax.The journal entry to record the sale would include a credit to

Based upon the following data for a business with a periodic inventory system,determine the cost of merchandise sold for August.

Merchandise subject to terms 2/10,n/30,FOB shipping point,is sold on account to a customer for $25,000.What is the amount of the sales discount allowable?

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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