Question 1

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 2

Cost of goods sold is reported on both the income statement and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

A debit memorandum is:

Accepted Answer

A) Required whenever a journal entry is recorded. 
B) The source document for the purchase of merchandise inventory. 
C) Required when a purchase discount is granted. 
D) The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records. 
E) Not necessary in a perpetual inventory system. 
A) Required whenever a journal entry is recorded. 
B) The source document for the purchase of merchandise inventory. 
C) Required when a purchase discount is granted. 
D) The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records. 
E) Not necessary in a perpetual inventory system.

Question 4

The operating cycle for a merchandiser that sells only for cash moves from:

Accepted Answer

A) Purchases of merchandise to inventory to cash sales. 
B) Purchases of merchandise to inventory to accounts receivable to cash sales. 
C) Inventory to purchases of merchandise to cash sales. 
D) Accounts receivable to purchases of merchandise to inventory to cash sales. 
E) Accounts receivable to inventory to cash sales. 
A) Purchases of merchandise to inventory to cash sales. 
B) Purchases of merchandise to inventory to accounts receivable to cash sales. 
C) Inventory to purchases of merchandise to cash sales. 
D) Accounts receivable to purchases of merchandise to inventory to cash sales. 
E) Accounts receivable to inventory to cash sales.

Question 5

1.Calculate the current ratio and acid-test ratio for each firm.
2.Rank the firms in decreasing order of liquidity.
3.Comment on Trico's relative liquidity position.

Accepted Answer

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Question 6

The current period's ending inventory is:

Accepted Answer

A) The next period's beginning inventory. 
B) The current period's cost of goods sold. 
C) The prior period's beginning inventory. 
D) The current period's net purchases. 
E) The current period's beginning inventory. 
A) The next period's beginning inventory. 
B) The current period's cost of goods sold. 
C) The prior period's beginning inventory. 
D) The current period's net purchases. 
E) The current period's beginning inventory.

Question 7

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

Accepted Answer

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Question 8

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accepted Answer

The answer of A ______________________ income statement includes cost of...

Question 9

Herald Company had sales of $135,000,sales discounts of $2,000 and sales returns of $3,200.Herald Company's net sales equal:

Accepted Answer

A) $5,200. 
B) $129,800. 
C) $133,000. 
D) $135,000. 
E) $140,200. 
A) $5,200. 
B) $129,800. 
C) $133,000. 
D) $135,000. 
E) $140,200.

Question 10

Which of the following statements is true regarding the closing process of a merchandiser?

Accepted Answer

A) Sales Discounts,Sales Returns and Allowances,and Cost of Goods sold should all be credited during closing. 
B) Sales Discounts,Sales Returns and Allowances,and Cost of Goods sold should all be debited during closing. 
C) Sales Discounts and Sales Returns and Allowances should be debited; Cost of Goods Sold should be credited during closing. 
D) Sales Discounts and Sales Returns and Allowances should be credited; Cost of Goods Sold should be debited during closing. 
E) Sales Discounts and Sales Returns and Allowances are not closed.Cost of Goods Sold should be credited during closing. 
A) Sales Discounts,Sales Returns and Allowances,and Cost of Goods sold should all be credited during closing. 
B) Sales Discounts,Sales Returns and Allowances,and Cost of Goods sold should all be debited during closing. 
C) Sales Discounts and Sales Returns and Allowances should be debited; Cost of Goods Sold should be credited during closing. 
D) Sales Discounts and Sales Returns and Allowances should be credited; Cost of Goods Sold should be debited during closing. 
E) Sales Discounts and Sales Returns and Allowances are not closed.Cost of Goods Sold should be credited during closing.

Question 11

A common rule of thumb is that a company's acid-test ratio should be at least 2 or a company may face financial problems in the near future.

Accepted Answer

A) True 
 B)False

Question 12

Purchase allowances refer to merchandise a buyer acquires but then returns to the seller.

Accepted Answer

A) True 
 B)False

Question 13

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Accepted Answer

The answer of The __________________ inventory system continually updates accounting...

Question 14

Accounting and reporting for merchandise purchases and sales are treated identically under both GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 15

Quick assets include cash,inventory,and current receivables.

Accepted Answer

A) True 
 B)False

Question 16

Cost of goods sold is:

Accepted Answer

A) Another term for merchandise sales. 
B) The cost of merchandise sold to customers. 
C) Another term for revenue. 
D) Also called gross margin. 
E) A term only used by service firms. 
A) Another term for merchandise sales. 
B) The cost of merchandise sold to customers. 
C) Another term for revenue. 
D) Also called gross margin. 
E) A term only used by service firms.

Question 17

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Accepted Answer

A) True 
 B)False

Question 18

The agreement regarding the amounts and timing of payment from a buyer to a seller are the ____________________.

Accepted Answer

The answer of The agreement regarding the amounts and timing...

Question 19

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

Accepted Answer

A) Sales: $136,000; gross profit: $111,000 
B) Sales: $136,000; gross profit: $85,000 
C) Sales: $85,000; gross profit: $136,000 
D) Sales: $111,000; gross profit: $136,000 
E) Sales: $60,000; gross profit: $25,000 
A) Sales: $136,000; gross profit: $111,000 
B) Sales: $136,000; gross profit: $85,000 
C) Sales: $85,000; gross profit: $136,000 
D) Sales: $111,000; gross profit: $136,000 
E) Sales: $60,000; gross profit: $25,000

Question 20

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

Accepted Answer

A) Sales: $350,000; gross profit: $150,000 
B) Sales: $350,000; gross profit: $50,000 
C) Sales: $500,000; gross profit: $400,000 
D) Sales: $500,000; gross profit: $50,000 
E) Sales: $400,000; gross profit: $500,000 
A) Sales: $350,000; gross profit: $150,000 
B) Sales: $350,000; gross profit: $50,000 
C) Sales: $500,000; gross profit: $400,000 
D) Sales: $500,000; gross profit: $50,000 
E) Sales: $400,000; gross profit: $500,000

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Cost of goods sold is reported on both the income statement and the balance sheet.

A debit memorandum is:

The operating cycle for a merchandiser that sells only for cash moves from:

1.Calculate the current ratio and acid-test ratio for each firm. 2.Rank the firms in decreasing order of liquidity. 3.Comment on Trico's relative liquidity position.

The current period's ending inventory is:

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Herald Company had sales of $135,000,sales discounts of $2,000 and sales returns of $3,200.Herald Company's net sales equal:

Which of the following statements is true regarding the closing process of a merchandiser?

A common rule of thumb is that a company's acid-test ratio should be at least 2 or a company may face financial problems in the near future.

Purchase allowances refer to merchandise a buyer acquires but then returns to the seller.

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Accounting and reporting for merchandise purchases and sales are treated identically under both GAAP and IFRS.

Quick assets include cash,inventory,and current receivables.

Cost of goods sold is:

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

The agreement regarding the amounts and timing of payment from a buyer to a seller are the ____________________.

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 4: Reporting and Analyzing Merchandising Operations

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Cost of goods sold is reported on both the income statement and the balance sheet.

A debit memorandum is:

The operating cycle for a merchandiser that sells only for cash moves from:

1.Calculate the current ratio and acid-test ratio for each firm. 2.Rank the firms in decreasing order of liquidity. 3.Comment on Trico's relative liquidity position.

The current period's ending inventory is:

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Herald Company had sales of $135,000,sales discounts of $2,000 and sales returns of $3,200.Herald Company's net sales equal:

Which of the following statements is true regarding the closing process of a merchandiser?

A common rule of thumb is that a company's acid-test ratio should be at least 2 or a company may face financial problems in the near future.

Purchase allowances refer to merchandise a buyer acquires but then returns to the seller.

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Accounting and reporting for merchandise purchases and sales are treated identically under both GAAP and IFRS.

Quick assets include cash,inventory,and current receivables.

Cost of goods sold is:

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

The agreement regarding the amounts and timing of payment from a buyer to a seller are the ____________________.

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters