Question 1

Products that a company owns and intends to sell are called ________.

Accepted Answer

Merchandis

Question 2

The amount recorded for merchandise inventory includes all of the following except:

Accepted Answer

A)  Purchase discounts. 
B)  Returns and allowances. 
C)  Freight costs paid by the buyer. 
D)  Freight costs paid by the seller. 
E)  Trade discounts. 
A)  Purchase discounts. 
B)  Returns and allowances. 
C)  Freight costs paid by the buyer. 
D)  Freight costs paid by the seller. 
E)  Trade discounts.

Question 3

If a company sells merchandise with credit terms 2/10 n/60,the credit period is 10 days and the discount period is 60 days.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

In a perpetual inventory system,the Merchandise Inventory account must be closed at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 6

The net method of recording purchases refers to recording:

Accepted Answer

A)  Purchases at the invoice price less any cash discounts. 
B)  Specified amounts and timing of payments that a buyer agrees to in return for being granted credit. 
C)  Purchases at the full invoice price, without deducting any cash discounts. 
D)  Inventory at its selling price. 
E)  Inventory at the lower of cost or market. 
A)  Purchases at the invoice price less any cash discounts. 
B)  Specified amounts and timing of payments that a buyer agrees to in return for being granted credit. 
C)  Purchases at the full invoice price, without deducting any cash discounts. 
D)  Inventory at its selling price. 
E)  Inventory at the lower of cost or market.

Question 7

A company uses the perpetual inventory system and recorded the following entry:
$$\begin{array} { | l | r | r | } 
\hline \text { Accounts Payable } & 2,500 & \
\hline \text { Merchandise Inventory } & & 50 \
\hline \text { Cash } & & 2,450 \
\hline
\end{array}$$
This entry reflects a:

Accepted Answer

A)  Purchase of merchandise on credit. 
B)  Return of merchandise. 
C)  Sale of merchandise on credit. 
D)  Payment of the account payable less a 2% cash discount taken. 
E)  Payment of the account payable less a 1% cash discount taken. 
A)  Purchase of merchandise on credit. 
B)  Return of merchandise. 
C)  Sale of merchandise on credit. 
D)  Payment of the account payable less a 2% cash discount taken. 
E)  Payment of the account payable less a 1% cash discount taken.

Question 8

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...

Question 9

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.Assuming the company uses a perpetual inventory system,and records purchases using the gross method,the correct journal entry to record the merchandise return on July 7 is:

Accepted Answer

A)  Debit Merchandise Inventory $1,600; credit Cash $1,600. 
B)  Debit Merchandise Inventory $200; credit Accounts Payable $200. 
C)  Debit Merchandise Inventory $200; credit Sales Returns $200. 
D)  Debit Accounts Payable $200; credit Merchandise Inventory $200. 
E)  Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. 
A)  Debit Merchandise Inventory $1,600; credit Cash $1,600. 
B)  Debit Merchandise Inventory $200; credit Accounts Payable $200. 
C)  Debit Merchandise Inventory $200; credit Sales Returns $200. 
D)  Debit Accounts Payable $200; credit Merchandise Inventory $200. 
E)  Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600.

Question 10

A ________ is an intermediary that buys products from manufacturers and sells to retailers.

Accepted Answer

The answer of A ________ is an intermediary that buys...

Question 11

Credit terms of 2/10,n/30 imply that the seller offers the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date.Otherwise,the full amount is due in 30 days.

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.
-Ryan uses the periodic inventory system and the net method of accounting for sales.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)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 4,000 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | l | } 
\hline \text { Cash } & 3,920 & \
\hline \text { Sales discounts } & 80 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Sales discounts } & 116 & \
\hline \text { Accounts receivable } & & 5,806 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 4,000 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | l | } 
\hline \text { Cash } & 3,920 & \
\hline \text { Sales discounts } & 80 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Sales discounts } & 116 & \
\hline \text { Accounts receivable } & & 5,806 \
\hline
\end{array}$$

Question 13

On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.
-Jepson uses the periodic inventory system and the gross method of accounting for purchases.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Jepson makes on September 18 is:

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Purchases } & 5,684 & \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 5,800 & \
\hline \text { Merchandise inventory } & & 116 \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 5,800 & \
\hline \text { Purchases discounts } & & 116 \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Purchases discounts } & 116 & \
\hline \text { Accounts payable } & & 5,806 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Purchases } & 5,684 & \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 5,800 & \
\hline \text { Merchandise inventory } & & 116 \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 5,800 & \
\hline \text { Purchases discounts } & & 116 \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Purchases discounts } & 116 & \
\hline \text { Accounts payable } & & 5,806 \
\hline
\end{array}$$

Question 14

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

Question 15

Cash sales shorten the operating cycle for a merchandiser; credit sales lengthen operating cycles.

Accepted Answer

A) True 
 B)False

Question 16

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 17

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.The journal entry or entries that Ryan will make on September 12 is (are):

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,684 & \
\hline \text { Sales } & & 5,684 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise Inventory } & & 4,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline \text { Cost of goods Sold } & 4,000 & \
\hline \text { Merchandise inventory } & & 4,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,684 & \
\hline \text { Sales } & & 5,684 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,684 & \
\hline \text { Sales } & & 5,684 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise Inventory } & & 4,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline \text { Cost of goods Sold } & 4,000 & \
\hline \text { Merchandise inventory } & & 4,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,684 & \
\hline \text { Sales } & & 5,684 \
\hline
\end{array}$$

Question 18

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 19

A ________ inventory system updates the accounting record for inventory only at the end of an accounting period.

Accepted Answer

The answer of A ________ inventory system updates the accounting...

Question 20

Morgan,Inc.uses a perpetual inventory system and the net method of recording purchases.On May 12,a merchandise purchase of $15,000 was made on credit,2/10,n/30.The journal entry to record this purchase is:

Accepted Answer

A)  $$\begin{array} { | l | r | l | } 
\hline \text { Merchandise Inventory } & 15,000 & \
\hline \text { Accounts Payable } & & 15,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | l | } 
\hline \text { Accounts Payable } & 15,000 & \
\hline \text { Merchandise Inventory } & & 15,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | l | } 
\hline \text { Purchases } & 15,000 & \
\hline \text { Accounts Payable } & & 15,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | l | } 
\hline \text { Purchases } & 14,700 & \
\hline \text { Accounts Payable } & & 14,700 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | l | } 
\hline \text { Merchandise Inventory } & 14,700 & \
\hline \text { Accounts Payable } & & 14,700 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | l | } 
\hline \text { Merchandise Inventory } & 15,000 & \
\hline \text { Accounts Payable } & & 15,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | l | } 
\hline \text { Accounts Payable } & 15,000 & \
\hline \text { Merchandise Inventory } & & 15,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | l | } 
\hline \text { Purchases } & 15,000 & \
\hline \text { Accounts Payable } & & 15,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | l | } 
\hline \text { Purchases } & 14,700 & \
\hline \text { Accounts Payable } & & 14,700 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | l | } 
\hline \text { Merchandise Inventory } & 14,700 & \
\hline \text { Accounts Payable } & & 14,700 \
\hline
\end{array}$$

Products that a company owns and intends to sell are called ________.

The amount recorded for merchandise inventory includes all of the following except:

If a company sells merchandise with credit terms 2/10 n/60,the credit period is 10 days and the discount period is 60 days.

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

In a perpetual inventory system,the Merchandise Inventory account must be closed at the end of the accounting period.

The net method of recording purchases refers to recording:

A company uses the perpetual inventory system and recorded the following entry: Accounts Payable 2,500 Merchandise Inventory 50 Cash 2,450 This entry reflects a:

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.

A ________ is an intermediary that buys products from manufacturers and sells to retailers.

Credit terms of 2/10,n/30 imply that the seller offers the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date.Otherwise,the full amount is due in 30 days.

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

Cash sales shorten the operating cycle for a merchandiser; credit sales lengthen operating cycles.

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

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

A ________ inventory system updates the accounting record for inventory only at the end of an accounting period.

Morgan,Inc.uses a perpetual inventory system and the net method of recording purchases.On May 12,a merchandise purchase of $15,000 was made on credit,2/10,n/30.The journal entry to record this purchase is:

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 4: Accounting for Merchandising Operations

Products that a company owns and intends to sell are called ________.

The amount recorded for merchandise inventory includes all of the following except:

If a company sells merchandise with credit terms 2/10 n/60,the credit period is 10 days and the discount period is 60 days.

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

In a perpetual inventory system,the Merchandise Inventory account must be closed at the end of the accounting period.

The net method of recording purchases refers to recording:

A company uses the perpetual inventory system and recorded the following entry: Accounts Payable 2,500 Merchandise Inventory 50 Cash 2,450 This entry reflects a:

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.

A ________ is an intermediary that buys products from manufacturers and sells to retailers.

Credit terms of 2/10,n/30 imply that the seller offers the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date.Otherwise,the full amount is due in 30 days.

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

Cash sales shorten the operating cycle for a merchandiser; credit sales lengthen operating cycles.

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

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

A ________ inventory system updates the accounting record for inventory only at the end of an accounting period.

Morgan,Inc.uses a perpetual inventory system and the net method of recording purchases.On May 12,a merchandise purchase of $15,000 was made on credit,2/10,n/30.The journal entry to record this purchase is:

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters