Question 1

The acid-test ratio:

Accepted Answer

A) Is also called the quick ratio. 
B) Measures profitability. 
C) Measures inventory turnover. 
D) Is generally greater than the current ratio. 
E) Measures return on assets. 
A) Is also called the quick ratio. 
B) Measures profitability. 
C) Measures inventory turnover. 
D) Is generally greater than the current ratio. 
E) Measures return on assets.

Question 2

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 26,it paid the full amount due.The amount of the cash paid on August 26 equals:

Accepted Answer

A) $8,167.50. 
B) $9,652.50. 
C) $9,750.00. 
D) $8,250.00. 
E) $8,152.50. 
A) $8,167.50. 
B) $9,652.50. 
C) $9,750.00. 
D) $8,250.00. 
E) $8,152.50.

Question 3

A wholesaler buys products from manufacturers or other wholesalers and sells them to consumers.

Accepted Answer

A) True 
 B)False

Question 4

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise
-On July 28,it paid the full amount due.The amount of the cash paid on July 28 equals:

Accepted Answer

A) $200. 
B) $1,564. 
C) $1,568. 
D) $1,600. 
E) $1,800. 
A) $200. 
B) $1,564. 
C) $1,568. 
D) $1,600. 
E) $1,800.

Question 5

When a company has no reportable non-operating activities,its income from operations is reported as ________.

Accepted Answer

The answer of When a company has no reportable non-operating...

Question 6

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 7

Describe the differences between FOB shipping point and FOB destination.

Accepted Answer

If goods are shipped FOB shipping point,

Question 8

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

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 9

Either the gross method or net method may be used to record sales with cash discounts,but the net method requires a period-end adjusting entry to estimate expected future sales discounts taken.

Accepted Answer

A) True 
 B)False

Question 10

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 purchase on August 7 is:

Accepted Answer

A) Debit Merchandise Inventory $9,750; credit Cash $9,750. 
B) Debit Accounts Payable $9,750; credit Merchandise Inventory $9,750. 
C) Debit Merchandise Inventory $9,750; credit Sales Returns $1,500; credit Cash $8,250. 
D) Debit Merchandise Inventory $9,750; credit Accounts Payable $9,750. 
E) Debit Accounts Payable $8,250; debit Purchase Returns $1,500; credit Merchandise Inventory $9,750. 
A) Debit Merchandise Inventory $9,750; credit Cash $9,750. 
B) Debit Accounts Payable $9,750; credit Merchandise Inventory $9,750. 
C) Debit Merchandise Inventory $9,750; credit Sales Returns $1,500; credit Cash $8,250. 
D) Debit Merchandise Inventory $9,750; credit Accounts Payable $9,750. 
E) Debit Accounts Payable $8,250; debit Purchase Returns $1,500; credit Merchandise Inventory $9,750.

Question 11

Under the net method of recording purchases,the Discounts Lost account is used when the purchaser fails to take a discount offered by the seller.

Accepted Answer

A) True 
 B)False

Question 12

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.
-Johnson uses the periodic inventory system and the net method of accounting for purchases.The journal entry that Johnson will make on September 12 is:

Accepted Answer

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

Question 13

FOB shipping point means that the buyer accepts ownership when the goods arrive at the buyer's place of business.

Accepted Answer

A) True 
 B)False

Question 14

A company had net sales of $752,000 and cost of goods sold of $543,000.Its net income was $17,530.The company's gross margin ratio equals:

Accepted Answer

A) 18.9% 
B) 24.5% 
C) 27.8% 
D) 34.7% 
E) 35.2% 
A) 18.9% 
B) 24.5% 
C) 27.8% 
D) 34.7% 
E) 35.2%

Question 15

A retailer buys products from manufacturers and sells them to wholesalers.

Accepted Answer

A) True 
 B)False

Question 16

Non-operating activities that include interest,dividends and rent revenues,and gains from asset disposals are called ________.

Accepted Answer

other reve

Question 17

In its first year of business,Borden Corporation had sales of $2,000,000 and cost of goods sold of $1,200,000.Borden expects returns in the following year to equal 8% of sales.The adjusting entry or entries to record the expected sales returns is (are):

Accepted Answer

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

Question 18

A company has net sales of $752,000 and cost of goods sold of $543,000.Its net income is $17,530.The company's gross margin and operating expenses,respectively,are:

Accepted Answer

A) $209,000 and $191,470. 
B) $191,470 and $209,000. 
C) $525,470 and $227,000. 
D) $227,000 and $525,470. 
E) $734,000 and $191,470. 
A) $209,000 and $191,470. 
B) $191,470 and $209,000. 
C) $525,470 and $227,000. 
D) $227,000 and $525,470. 
E) $734,000 and $191,470.

Question 19

A company reported the following information for the month of July:
   Required: Calculate this company's gross margin ratio.

Accepted Answer

The answer of A company reported the following information for...

Question 20

A buyer using a perpetual inventory system records the costs of shipping merchandise it purchases in a Delivery Expense account.

Accepted Answer

A) True 
 B)False

Exam 4: Accounting for Merchandising Operations

The acid-test ratio:

A wholesaler buys products from manufacturers or other wholesalers and sells them to consumers.

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise -On July 28,it paid the full amount due.The amount of the cash paid on July 28 equals:

When a company has no reportable non-operating activities,its income from operations is reported as ________.

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

Describe the differences between FOB shipping point and FOB destination.

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

Either the gross method or net method may be used to record sales with cash discounts,but the net method requires a period-end adjusting entry to estimate expected future sales discounts taken.

Under the net method of recording purchases,the Discounts Lost account is used when the purchaser fails to take a discount offered by the seller.

FOB shipping point means that the buyer accepts ownership when the goods arrive at the buyer's place of business.

A company had net sales of $752,000 and cost of goods sold of $543,000.Its net income was $17,530.The company's gross margin ratio equals:

A retailer buys products from manufacturers and sells them to wholesalers.

Non-operating activities that include interest,dividends and rent revenues,and gains from asset disposals are called ________.

In its first year of business,Borden Corporation had sales of $2,000,000 and cost of goods sold of $1,200,000.Borden expects returns in the following year to equal 8% of sales.The adjusting entry or entries to record the expected sales returns is (are):

A company has net sales of $752,000 and cost of goods sold of $543,000.Its net income is $17,530.The company's gross margin and operating expenses,respectively,are:

A company reported the following information for the month of July: Required: Calculate this company's gross margin ratio.

A buyer using a perpetual inventory system records the costs of shipping merchandise it purchases in a Delivery Expense account.

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

Filters