Question 1

?If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Accepted Answer

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

Question 2

Merchandise with a sales price of $5,000 is sold on account with terms 2/10,n/30.The journal entry to record the sale would include a

Accepted Answer

A) debit to Cash for $5,000 
B) debit to Sales Discounts for $100 
C) credit to Sales for $4,900 
D) debit to Accounts Receivable for $4,880 
A) debit to Cash for $5,000 
B) debit to Sales Discounts for $100 
C) credit to Sales for $4,900 
D) debit to Accounts Receivable for $4,880

Question 3

The cost of merchandise inventory is limited to the purchase price less any purchase discounts.

Accepted Answer

A) True 
 B)False

Question 4

Income that cannot be associated definitely with operations,such as a gain from the sale of a fixed asset,is listed as Other Income on the multiple-step income statement.

Accepted Answer

A) True 
 B)False

Question 5

If merchandise sells for $3,500,with terms of 3/15,n/45 and the cost of the inventory sold is $2,100,the amount charged to sales is

Accepted Answer

A) $3,395 
B) $3,500 
C) $2,037 
D) $2,100 
A) $3,395 
B) $3,500 
C) $2,037 
D) $2,100

Question 6

Complete the following data taken from the condensed income statements for merchandising Companies A,B,and C.
 $\begin{array}{|l|r|r|r|}
\hline & \text { Company A } & \text { Company B } & \text { Company C } \
\hline \text { Net income } & \$ 315 & \$ ? & \$ 215 \
\hline \text { Sales } & ? & 865 & 560 \
\hline \text { Gross profit } & 430 & ? & 325 \
\hline \text { Operating expenses } & ? & 125 & ? \
\hline \text { Cost of merchandise sold } & 545 & 320 & ? \
\hline
\end{array}$

Accepted Answer

None

Question 7

A retailer purchases merchandise with a catalog list price of $30,000.The retailer receives a 15% trade discount and credit terms of 2/10,n/30.How much cash will be needed to pay this invoice within the discount period?

Accepted Answer

A) $30,000 
B) $24,900 
C) $29,400 
D) $24,990 
A) $30,000 
B) $24,900 
C) $29,400 
D) $24,990

Question 8

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

Accepted Answer

A) debit to Bank Credit Card Sales,debit to Credit Card Expense,and a credit to Sales 
B) debit to Cash and a credit to Sales 
C) debit to Cash,credit to Credit Card Expense,and a credit to Sales 
D) debit to Sales,debit to Credit Card Expense,and a credit to Cash 
A) debit to Bank Credit Card Sales,debit to Credit Card Expense,and a credit to Sales 
B) debit to Cash and a credit to Sales 
C) debit to Cash,credit to Credit Card Expense,and a credit to Sales 
D) debit to Sales,debit to Credit Card Expense,and a credit to Cash

Question 9

A customer discount encourages customers to pay accounts more quickly than if a discount were not available.

Accepted Answer

A) True 
 B)False

Question 10

A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of the period.During the period,merchandise costing $635 is purchased.At year-end,merchandise inventory costing $160 is on hand.The cost of merchandise sold for the year is

Accepted Answer

A) $795 
B) $685 
C) $265 
D) $635 
A) $795 
B) $685 
C) $265 
D) $635

Question 11

The chart of accounts for a merchandising business would include an account called Delivery Expense.

Accepted Answer

A) True 
 B)False

Question 12

Pierce Company sold to Stanton Company merchandise on account FOB shipping point,2/10,net 30,for $20,000.Pierce prepaid the $500 shipping charge.Which of the following entries does Pierce make to record this sale?

Accepted Answer

A) Accounts Receivable-Stanton,debit $20,000; Sales,credit $20,000 
B) Accounts Receivable-Stanton,debit $19,600; Sales,credit $19,600,and Accounts Receivable-Stanton,debit $500; Cash,credit $500 
C) Accounts Receivable-Stanton,debit $20,100; Sales,credit $20,100 
D) Accounts Receivable-Stanton,debit $20,000; Sales,credit $20,000,and Delivery Expense,debit $500; Cash,credit $500 
A) Accounts Receivable-Stanton,debit $20,000; Sales,credit $20,000 
B) Accounts Receivable-Stanton,debit $19,600; Sales,credit $19,600,and Accounts Receivable-Stanton,debit $500; Cash,credit $500 
C) Accounts Receivable-Stanton,debit $20,100; Sales,credit $20,100 
D) Accounts Receivable-Stanton,debit $20,000; Sales,credit $20,000,and Delivery Expense,debit $500; Cash,credit $500

Question 13

Most retailers record all credit card sales as credit sales.

Accepted Answer

A) True 
 B)False

Question 14

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,determine the gross profit to be reported on the income statement for the year ended March 31.

Accepted Answer

Gross Profit @#LAT-DLM& Sales @#LAT-DLM& COMS* @#LAT-DLM&
* Cost of me

Question 15

The fees associated with credit card sales are periodically recorded as expenses.

Accepted Answer

A) True 
 B)False

Question 16

Who is responsible for the freight costs when the terms are FOB shipping point?

Accepted Answer

A) the ultimate customer 
B) the buyer 
C) the seller 
D) either the seller or the buyer 
A) the ultimate customer 
B) the buyer 
C) the seller 
D) either the seller or the buyer

Question 17

Under a periodic inventory system,the cost of merchandise on hand at the end of the year is determined by a physical count of the inventory.

Accepted Answer

A) True 
 B)False

Question 18

During the current year,merchandise is sold for $117,500 cash and $241,750 on account.The cost of the merchandise sold is $157,400.What is the amount of the gross profit?

Accepted Answer

$117,500 +

Question 19

Using the following information,what is the cost of merchandise sold?

Accepted Answer

A) $32,400 
B) $32,670 
C) $31,330 
D) $38,370 
A) $32,400 
B) $32,670 
C) $31,330 
D) $38,370

Question 20

Under the perpetual inventory system,all purchases of merchandise are debited to the account

Accepted Answer

A) Merchandise Inventory 
B) Cost of Merchandise Sold 
C) Cost of Merchandise Available for Sale 
D) Purchases 
A) Merchandise Inventory 
B) Cost of Merchandise Sold 
C) Cost of Merchandise Available for Sale 
D) Purchases

?If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Merchandise with a sales price of $5,000 is sold on account with terms 2/10,n/30.The journal entry to record the sale would include a

The cost of merchandise inventory is limited to the purchase price less any purchase discounts.

Income that cannot be associated definitely with operations,such as a gain from the sale of a fixed asset,is listed as Other Income on the multiple-step income statement.

If merchandise sells for $3,500,with terms of 3/15,n/45 and the cost of the inventory sold is $2,100,the amount charged to sales is

Complete the following data taken from the condensed income statements for merchandising Companies A,B,and C. Company A Company B Company C Net income \ 315 \ ? \ 215 Sales ? 865 560 Gross profit 430 ? 325 Operating expenses ? 125 ? Cost of merchandise sold 545 320 ?

A retailer purchases merchandise with a catalog list price of $30,000.The retailer receives a 15% trade discount and credit terms of 2/10,n/30.How much cash will be needed to pay this invoice within the discount period?

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

A customer discount encourages customers to pay accounts more quickly than if a discount were not available.

A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of the period.During the period,merchandise costing $635 is purchased.At year-end,merchandise inventory costing $160 is on hand.The cost of merchandise sold for the year is

The chart of accounts for a merchandising business would include an account called Delivery Expense.

Pierce Company sold to Stanton Company merchandise on account FOB shipping point,2/10,net 30,for $20,000.Pierce prepaid the $500 shipping charge.Which of the following entries does Pierce make to record this sale?

Most retailers record all credit card sales as credit sales.

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,determine the gross profit to be reported on the income statement for the year ended March 31.

The fees associated with credit card sales are periodically recorded as expenses.

Who is responsible for the freight costs when the terms are FOB shipping point?

Under a periodic inventory system,the cost of merchandise on hand at the end of the year is determined by a physical count of the inventory.

During the current year,merchandise is sold for $117,500 cash and $241,750 on account.The cost of the merchandise sold is $157,400.What is the amount of the gross profit?

Using the following information,what is the cost of merchandise sold?

Under the perpetual inventory system,all purchases of merchandise are debited to the account

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

?If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Merchandise with a sales price of $5,000 is sold on account with terms 2/10,n/30.The journal entry to record the sale would include a

The cost of merchandise inventory is limited to the purchase price less any purchase discounts.

Income that cannot be associated definitely with operations,such as a gain from the sale of a fixed asset,is listed as Other Income on the multiple-step income statement.

If merchandise sells for $3,500,with terms of 3/15,n/45 and the cost of the inventory sold is $2,100,the amount charged to sales is

Complete the following data taken from the condensed income statements for merchandising Companies A,B,and C. Company A Company B Company C Net income \ 315 \ ? \ 215 Sales ? 865 560 Gross profit 430 ? 325 Operating expenses ? 125 ? Cost of merchandise sold 545 320 ?

A retailer purchases merchandise with a catalog list price of $30,000.The retailer receives a 15% trade discount and credit terms of 2/10,n/30.How much cash will be needed to pay this invoice within the discount period?

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

A customer discount encourages customers to pay accounts more quickly than if a discount were not available.

A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of the period.During the period,merchandise costing $635 is purchased.At year-end,merchandise inventory costing $160 is on hand.The cost of merchandise sold for the year is

The chart of accounts for a merchandising business would include an account called Delivery Expense.

Pierce Company sold to Stanton Company merchandise on account FOB shipping point,2/10,net 30,for $20,000.Pierce prepaid the $500 shipping charge.Which of the following entries does Pierce make to record this sale?

Most retailers record all credit card sales as credit sales.

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,determine the gross profit to be reported on the income statement for the year ended March 31.

The fees associated with credit card sales are periodically recorded as expenses.

Who is responsible for the freight costs when the terms are FOB shipping point?

Under a periodic inventory system,the cost of merchandise on hand at the end of the year is determined by a physical count of the inventory.

During the current year,merchandise is sold for $117,500 cash and $241,750 on account.The cost of the merchandise sold is $157,400.What is the amount of the gross profit?

Using the following information,what is the cost of merchandise sold?

Under the perpetual inventory system,all purchases of merchandise are debited to the account

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