Question 1

Harley's Antique Shop had net sales of $772,000.The gross profit was $415,000.Calculate Harley's cost of goods sold.

Accepted Answer

Cost of Goods Sold =

Question 2

The net method records the invoice at its net amount (net of any cash discount).

Accepted Answer

A) True 
 B)False

Question 3

A company purchases merchandise with a catalog price of $20,000.The company receives a 35% trade discount from the seller.The seller also offers credit terms of 2/10,n/30.Assuming no returns were made and that payment was made within the discount period,what is the net cost of the merchandise?

Accepted Answer

A) $13,720. 
B) $19,600. 
C) $6,860. 
D) $13,000. 
E) $12,740. 
A) $13,720. 
B) $19,600. 
C) $6,860. 
D) $13,000. 
E) $12,740.

Question 4

Following is the year-end adjusted trial balance for Fred's Corner Grocery for the current year:
 Prepare the closing entries at December 31 for the current year.

Accepted Answer

The answer of Following is the year-end adjusted trial balance...

Question 5

A company's quick assets are $147,000 and its current liabilities are $143,000.This company's acid-test ratio is 1.03.

Accepted Answer

A) True 
 B)False

Question 6

Reductions in the selling price of merchandise sold to customers,often involving damaged or defective merchandise that a customer is willing to purchase with a decrease in the selling price is referred to as________.

Accepted Answer

The answer of Reductions in the selling price of merchandise...

Question 7

The following information is for Barrel and its competitor Crate.
   Required:
1.Calculate the dollar amount of gross margin and the gross margin ratio to the nearest percent,for each company for both years.
2.Which company had the more favorable ratio for each year?
3.Which company had the more favorable change in the gross margin ratio over this 2-year period?

Accepted Answer

@#IMG-DLM& 2.Barrel had the more favorab

Question 8

A periodic inventory system requires updating of the inventory account only at the beginning of an accounting period.

Accepted Answer

A) True 
 B)False

Question 9

What is the acid-test ratio? How does it measure a company's liquidity?

Accepted Answer

The acid-test ratio is a measure of a me

Question 10

Explain the way in which costs flow through the merchandise inventory account to a merchandiser's income statement.

Accepted Answer

Beginning inventory plus the net cost of

Question 11

Describe the difference(s)between the periodic and the perpetual inventory accounting systems.

Accepted Answer

Under a perpetual system each purchase,p

Question 12

Zenith Company's Merchandise Inventory account at year-end has a balance of $91,820,but a physical count reveals that only $90,450 of inventory exists.The adjusting entry to record this $1,370 of inventory shrinkage is:

Accepted Answer

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

Question 13

Fill in the blanks (a)through (g)for the Corman Company for each of the income statements for years 1 and 2

Accepted Answer

@#IMG-DLM& (a)Merchandise inventory,beginning + pu

Question 14

Purchase allowances refer to a price reduction (allowance)granted to a buyer of defective or unacceptable merchandise.

Accepted Answer

A) True 
 B)False

Question 15

Serene Spa Sales uses the perpetual inventory system and the gross method of accounting for purchases and sales,and had the following transactions during August.
   Required:
Prepare the general journal entries to record these transactions.

Accepted Answer

The answer of Serene Spa Sales uses the perpetual inventory...

Question 16

Match between columns
                        Premises: The amount of time allowed before full payment is due.
The loss of inventory from theft and deterioration.
The time period in which reduced payment can be made by the buyer because of a cash discount offered by a seller of goods on credit.
Price reduction granted by the seller to a buyer of defective or unacceptable merchandise.
The description of the amounts and timing of payments from a buyer to a seller for a purchase.
The calculation of net sales minus cost of goods sold.
A cash discount granted from the view of the seller, indicated in the credit terms on the invoice.
An inventory accounting method that updates accounting records for each purchase and each sale of inventory.
An inventory accounting method that updates the accounting records for purchases and sales of inventory only at the end of a period.
A cash discount granted, from the view of the purchaser intended to encourage buyers to pay amounts owed earlier.

Accepted Answer

The Answer of Purchases discounts and Discount period and Credit is...

Question 17

A company's current assets are $17,980,its quick assets are $11,420 and its current liabilities are $12,190.Its quick ratio equals:

Accepted Answer

A) 0.94. 
B) 1.07. 
C) 1.48. 
D) 1.57. 
E) 2.40. 
A) 0.94. 
B) 1.07. 
C) 1.48. 
D) 1.57. 
E) 2.40.

Question 18

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

Accepted Answer

A) True 
 B)False

Question 19

When a company has no reportable non-operating activities,its income from operations is simply labeled net income.

Accepted Answer

A) True 
 B)False

Question 20

The perpetual system requires that each sale of merchandise has two entries: the revenue side and the cost side.

Accepted Answer

A) True 
 B)False

Exam 4: Accounting for Merchandising Operations

Harley's Antique Shop had net sales of $772,000.The gross profit was $415,000.Calculate Harley's cost of goods sold.

The net method records the invoice at its net amount (net of any cash discount).

A company purchases merchandise with a catalog price of $20,000.The company receives a 35% trade discount from the seller.The seller also offers credit terms of 2/10,n/30.Assuming no returns were made and that payment was made within the discount period,what is the net cost of the merchandise?

Following is the year-end adjusted trial balance for Fred's Corner Grocery for the current year: Prepare the closing entries at December 31 for the current year.

A company's quick assets are $147,000 and its current liabilities are $143,000.This company's acid-test ratio is 1.03.

Reductions in the selling price of merchandise sold to customers,often involving damaged or defective merchandise that a customer is willing to purchase with a decrease in the selling price is referred to as________.

A periodic inventory system requires updating of the inventory account only at the beginning of an accounting period.

What is the acid-test ratio? How does it measure a company's liquidity?

Explain the way in which costs flow through the merchandise inventory account to a merchandiser's income statement.

Describe the difference(s)between the periodic and the perpetual inventory accounting systems.

Zenith Company's Merchandise Inventory account at year-end has a balance of $91,820,but a physical count reveals that only $90,450 of inventory exists.The adjusting entry to record this $1,370 of inventory shrinkage is:

Fill in the blanks (a)through (g)for the Corman Company for each of the income statements for years 1 and 2

Purchase allowances refer to a price reduction (allowance)granted to a buyer of defective or unacceptable merchandise.

Serene Spa Sales uses the perpetual inventory system and the gross method of accounting for purchases and sales,and had the following transactions during August. Required: Prepare the general journal entries to record these transactions.

A company's current assets are $17,980,its quick assets are $11,420 and its current liabilities are $12,190.Its quick ratio equals:

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

When a company has no reportable non-operating activities,its income from operations is simply labeled net income.

The perpetual system requires that each sale of merchandise has two entries: the revenue side and the cost side.

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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