Question 1

Buyers and sellers do not normally record the list prices of merchandise and the trade discounts in accounts.

Accepted Answer

A) True 
 B)False

Question 2

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

Accepted Answer

A) multiple-step statement 
B) revenue statement 
C) report-form statement 
D) single-step statement 
A) multiple-step statement 
B) revenue statement 
C) report-form statement 
D) single-step statement

Question 3

When the perpetual inventory system is used,the inventory sold is shown on the income statement as

Accepted Answer

A) cost of merchandise sold 
B) purchases 
C) purchases returns and allowances 
D) net purchases 
A) cost of merchandise sold 
B) purchases 
C) purchases returns and allowances 
D) net purchases

Question 4

When the terms of sale are FOB shipping point,the buyer pays the freight charges.

Accepted Answer

A) True 
 B)False

Question 5

In a periodic inventory system,the cost of merchandise purchased includes the cost of freight-in.

Accepted Answer

A) True 
 B)False

Question 6

Inventory shrinkage is recorded when

Accepted Answer

A) merchandise is returned by a buyer 
B) merchandise purchased from a seller is incomplete or short 
C) merchandise is returned to a seller 
D) there is a difference between a physical count of inventory and inventory records 
A) merchandise is returned by a buyer 
B) merchandise purchased from a seller is incomplete or short 
C) merchandise is returned to a seller 
D) there is a difference between a physical count of inventory and inventory records

Question 7

The entry to record the return of merchandise from a customer would include a

Accepted Answer

A) debit to Sales 
B) credit to Sales 
C) debit to Customer Refunds Payable 
D) debit to Estimated Returns Inventory 
A) debit to Sales 
B) credit to Sales 
C) debit to Customer Refunds Payable 
D) debit to Estimated Returns Inventory

Question 8

Merchandise inventory is classified on the balance sheet as a

Accepted Answer

A) current liability 
B) current asset 
C) long-term asset 
D) long-term liability 
A) current liability 
B) current asset 
C) long-term asset 
D) long-term liability

Question 9

Multiple-step income statements show

Accepted Answer

A) gross profit but not income from operations 
B) neither gross profit nor income from operations 
C) both gross profit and income from operations 
D) income from operations but not gross profit 
A) gross profit but not income from operations 
B) neither gross profit nor income from operations 
C) both gross profit and income from operations 
D) income from operations but not gross profit

Question 10

Using a perpetual inventory system,the entry to record the sale of merchandise on account includes a

Accepted Answer

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

Question 11

The primary difference between the periodic and perpetual inventory systems is that a

Accepted Answer

A) periodic system determines the inventory on hand only at the end of the accounting period 
B) periodic system keeps a record showing the inventory on hand at all times 
C) periodic system provides an easy means to determine inventory shrinkage 
D) periodic system records the cost of the sale on the date the sale is made 
A) periodic system determines the inventory on hand only at the end of the accounting period 
B) periodic system keeps a record showing the inventory on hand at all times 
C) periodic system provides an easy means to determine inventory shrinkage 
D) periodic system records the cost of the sale on the date the sale is made

Question 12

If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment,the terms are stated as FOB destination.

Accepted Answer

A) True 
 B)False

Question 13

In recording the cost of merchandise sold for cash,based on data available from perpetual inventory records,the journal entry is

Accepted Answer

A) debit Cost of Merchandise Sold; credit Sales 
B) debit Cost of Merchandise Sold; credit Merchandise Inventory 
C) debit Merchandise Inventory; credit Cost of Merchandise Sold 
D) debit Accounts Receivable; credit Merchandise Inventory 
A) debit Cost of Merchandise Sold; credit Sales 
B) debit Cost of Merchandise Sold; credit Merchandise Inventory 
C) debit Merchandise Inventory; credit Cost of Merchandise Sold 
D) debit Accounts Receivable; credit Merchandise Inventory

Question 14

The single-step income statement is easier to prepare,but a criticism of this format is that gross profit and income from operations are not readily available.

Accepted Answer

A) True 
 B)False

Question 15

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Accepted Answer

A) retail 
B) periodic 
C) physical 
D) perpetual 
A) retail 
B) periodic 
C) physical 
D) perpetual

Question 16

Determine the amount to be paid in full settlement of each invoice,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

Accepted Answer

a. $3,374

Question 17

Under the perpetual inventory system,when a sale is made,both the sale and cost of merchandise sold are recorded.

Accepted Answer

A) True 
 B)False

Question 18

If the physical count of the inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000,what would be the necessary adjusting entry to record inventory shrinkage?

Accepted Answer

A) debit Merchandise Inventory,$158,000; credit Cost of Merchandise Sold,$158,000 
B) debit Merchandise Inventory,$5,000; credit Cost of Merchandise Sold,$5,000 
C) debit Cost of Merchandise Sold,$163,000; credit Merchandise Inventory,$158,000 
D) debit Cost of Merchandise Sold,$5,000; credit Merchandise Inventory,$5,000 
A) debit Merchandise Inventory,$158,000; credit Cost of Merchandise Sold,$158,000 
B) debit Merchandise Inventory,$5,000; credit Cost of Merchandise Sold,$5,000 
C) debit Cost of Merchandise Sold,$163,000; credit Merchandise Inventory,$158,000 
D) debit Cost of Merchandise Sold,$5,000; credit Merchandise Inventory,$5,000

Question 19

Which account is not classified as a selling expense?

Accepted Answer

A) Sales Salaries 
B) Delivery Expense 
C) Cost of Goods Sold 
D) Advertising Expense 
A) Sales Salaries 
B) Delivery Expense 
C) Cost of Goods Sold 
D) Advertising Expense

Question 20

Calculate income from operations for Jonas Company based on the following data:

Accepted Answer

A) $485,500 
B) $711,500 
C) $173,500 
D) $226,000 
A) $485,500 
B) $711,500 
C) $173,500 
D) $226,000

Buyers and sellers do not normally record the list prices of merchandise and the trade discounts in accounts.

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

When the perpetual inventory system is used,the inventory sold is shown on the income statement as

When the terms of sale are FOB shipping point,the buyer pays the freight charges.

In a periodic inventory system,the cost of merchandise purchased includes the cost of freight-in.

Inventory shrinkage is recorded when

The entry to record the return of merchandise from a customer would include a

Merchandise inventory is classified on the balance sheet as a

Multiple-step income statements show

Using a perpetual inventory system,the entry to record the sale of merchandise on account includes a

The primary difference between the periodic and perpetual inventory systems is that a

If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment,the terms are stated as FOB destination.

In recording the cost of merchandise sold for cash,based on data available from perpetual inventory records,the journal entry is

The single-step income statement is easier to prepare,but a criticism of this format is that gross profit and income from operations are not readily available.

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Determine the amount to be paid in full settlement of each invoice,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

Under the perpetual inventory system,when a sale is made,both the sale and cost of merchandise sold are recorded.

If the physical count of the inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000,what would be the necessary adjusting entry to record inventory shrinkage?

Which account is not classified as a selling expense?

Calculate income from operations for Jonas Company based on the following data:

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

Filters

Exam 5: Accounting for Merchandising Businesses

Buyers and sellers do not normally record the list prices of merchandise and the trade discounts in accounts.

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

When the perpetual inventory system is used,the inventory sold is shown on the income statement as

When the terms of sale are FOB shipping point,the buyer pays the freight charges.

In a periodic inventory system,the cost of merchandise purchased includes the cost of freight-in.

Inventory shrinkage is recorded when

The entry to record the return of merchandise from a customer would include a

Merchandise inventory is classified on the balance sheet as a

Multiple-step income statements show

Using a perpetual inventory system,the entry to record the sale of merchandise on account includes a

The primary difference between the periodic and perpetual inventory systems is that a

If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment,the terms are stated as FOB destination.

In recording the cost of merchandise sold for cash,based on data available from perpetual inventory records,the journal entry is

The single-step income statement is easier to prepare,but a criticism of this format is that gross profit and income from operations are not readily available.

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Determine the amount to be paid in full settlement of each invoice,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

Under the perpetual inventory system,when a sale is made,both the sale and cost of merchandise sold are recorded.

If the physical count of the inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000,what would be the necessary adjusting entry to record inventory shrinkage?

Which account is not classified as a selling expense?

Calculate income from operations for Jonas Company based on the following data:

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

Filters