Question 1

New revenue recognition rules require that sellers report sales net of expected sales discounts.

Accepted Answer

A) True 
 B)False

Question 2

A company's current assets are $23,420,its quick assets are $13,890 and its current liabilities are $12,220.Its acid-test ratio equals:

Accepted Answer

A) 0.88. 
B) 1.91. 
C) 1.14. 
D) 0.52. 
E) 1.41. 
A) 0.88. 
B) 1.91. 
C) 1.14. 
D) 0.52. 
E) 1.41.

Question 3

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.
-On August 16,it paid the full amount due.The correct journal entry to record the payment on August 16 is:

Accepted Answer

A) Debit Merchandise Inventory $8,250; credit Cash $8,250. 
B) Debit Cash $8,250; credit Accounts Payable $8,250. 
C) Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50. 
D) Debit Accounts Payable $9,750; credit Merchandise Inventory $97.50; credit Cash $9,652.50. 
E) Debit Accounts Payable $8,167.50; credit Cash $8,167.50. 
A) Debit Merchandise Inventory $8,250; credit Cash $8,250. 
B) Debit Cash $8,250; credit Accounts Payable $8,250. 
C) Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50. 
D) Debit Accounts Payable $9,750; credit Merchandise Inventory $97.50; credit Cash $9,652.50. 
E) Debit Accounts Payable $8,167.50; credit Cash $8,167.50.

Question 4

________ can benefit a seller by decreasing the delay in receiving cash and reducing future collection efforts.

Accepted Answer

The answer of ________ can benefit a seller by decreasing...

Question 5

Explain the difference between the single-step and multiple-step income statements.

Accepted Answer

A single-step income statement format in

Question 6

________ are the amounts and timing of payment from a buyer to a seller.

Accepted Answer

The answer of ________ are the amounts and timing of...

Question 7

Cost of Goods Sold is debited to close the account during the closing process.

Accepted Answer

A) True 
 B)False

Question 8

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 9

The gross margin ratio equals net sales less ________ divided by net sales.

Accepted Answer

The answer of The gross margin ratio equals net sales...

Question 10

On September 12,Ryan Company sold merchandise in the amount of $5,800 to Johnson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.
-Ryan uses the periodic inventory system and the net method of accounting for sales.On September 14,Johnson returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.Johnson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Ryan makes on September 18 is:

Accepted Answer

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

Question 11

Identify and explain the key components of a merchandiser's net income.

Accepted Answer

The basic components of income begin wit

Question 12

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

Accepted Answer

A) True 
 B)False

Question 13

A company's net sales were $676,600,its cost of goods sold was $236,810 and its net income was $33,750.Its gross margin ratio equals:

Accepted Answer

A) 5%. 
B) 9.6%. 
C) 35%. 
D) 65%. 
E) 285.7%. 
A) 5%. 
B) 9.6%. 
C) 35%. 
D) 65%. 
E) 285.7%.

Question 14

Beginning inventory plus the net cost of purchases is the ________.

Accepted Answer

merchandis

Question 15

Describe the difference between wholesalers and retailers.

Accepted Answer

A wholesaler buys products fro

Question 16

Successful use of a just-in-time inventory system can narrow the gap between the acid-test and the current ratio.

Accepted Answer

A) True 
 B)False

Question 17

A company has sales of $695,000 and cost of goods sold of $278,000.Its gross profit equals:

Accepted Answer

A) $(417,000). 
B) $695,000. 
C) $278,000. 
D) $417,000. 
E) $973,000. 
A) $(417,000). 
B) $695,000. 
C) $278,000. 
D) $417,000. 
E) $973,000.

Question 18

A company's net sales are $775,420,its costs of goods sold are $413,890,and its net income is $117,220.Its gross margin ratio equals:

Accepted Answer

A) 46.6%. 
B) 53.4%. 
C) 28.3%. 
D) 31.5%. 
E) 40.5%. 
A) 46.6%. 
B) 53.4%. 
C) 28.3%. 
D) 31.5%. 
E) 40.5%.

Question 19

The acid-test ratio differs from the current ratio in that:

Accepted Answer

A) Liabilities are divided by current assets. 
B) Prepaid expenses and inventory are excluded from the calculation of the acid-test ratio. 
C) The acid-test ratio measures profitability and the current ratio does not. 
D) The acid-test ratio excludes short-term investments from the calculation. 
E) The acid-test ratio is a measure of liquidity but the current ratio is not. 
A) Liabilities are divided by current assets. 
B) Prepaid expenses and inventory are excluded from the calculation of the acid-test ratio. 
C) The acid-test ratio measures profitability and the current ratio does not. 
D) The acid-test ratio excludes short-term investments from the calculation. 
E) The acid-test ratio is a measure of liquidity but the current ratio is not.

Question 20

The year-end adjusted trial balance of Gordon Produce for the current year,is shown below:
 
Prepare closing entries at December 31 for the current year.

Accepted Answer

The answer of The year-end adjusted trial balance of Gordon...

Exam 4: Accounting for Merchandising Operations

New revenue recognition rules require that sellers report sales net of expected sales discounts.

A company's current assets are $23,420,its quick assets are $13,890 and its current liabilities are $12,220.Its acid-test ratio equals:

________ can benefit a seller by decreasing the delay in receiving cash and reducing future collection efforts.

Explain the difference between the single-step and multiple-step income statements.

________ are the amounts and timing of payment from a buyer to a seller.

Cost of Goods Sold is debited to close the account during the closing process.

Merchandise inventory is reported in the long-term assets section of the balance sheet.

The gross margin ratio equals net sales less ________ divided by net sales.

Identify and explain the key components of a merchandiser's net income.

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

A company's net sales were $676,600,its cost of goods sold was $236,810 and its net income was $33,750.Its gross margin ratio equals:

Beginning inventory plus the net cost of purchases is the ________.

Describe the difference between wholesalers and retailers.

Successful use of a just-in-time inventory system can narrow the gap between the acid-test and the current ratio.

A company has sales of $695,000 and cost of goods sold of $278,000.Its gross profit equals:

A company's net sales are $775,420,its costs of goods sold are $413,890,and its net income is $117,220.Its gross margin ratio equals:

The acid-test ratio differs from the current ratio in that:

The year-end adjusted trial balance of Gordon Produce for the current year,is shown below: Prepare closing entries at December 31 for the current year.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

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