Question 1

The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.

Accepted Answer

A) True 
 B)False

Question 2

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.Johnson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Johnson 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)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 4,000 & \
\hline \text { Merchandise inventory } & & 80 \
\hline \text { Cash } & & 3,920 \
\hline
\end{array}$$ 
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)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 5,684 & \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
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)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 4,000 & \
\hline \text { Merchandise inventory } & & 80 \
\hline \text { Cash } & & 3,920 \
\hline
\end{array}$$ 
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)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 5,684 & \
\hline \text { Cash } & & 5,684 \
\hline
\end{array}$$ 
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 3

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

Accepted Answer

A)  $209,000 and $191,470 
B)  $278,000 and $179,500 
C)  $278,000 and $98,500 
D)  $179,500 and $98,500 
E)  $645,500 and $179,500 
A)  $209,000 and $191,470 
B)  $278,000 and $179,500 
C)  $278,000 and $98,500 
D)  $179,500 and $98,500 
E)  $645,500 and $179,500

Question 7

A company had net sales of $340,500,its cost of goods sold was $257,000,and its net income was $13,750.The company's gross margin ratio equals 24.5%.

Accepted Answer

A) True 
 B)False

Question 8

A service company earns net income by buying and selling merchandise.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Beginning inventory plus net purchases is:

Accepted Answer

A)  Cost of goods sold. 
B)  Merchandise (goods) available for sale. 
C)  Ending inventory. 
D)  Sales. 
E)  Shown on the balance sheet. 
A)  Cost of goods sold. 
B)  Merchandise (goods) available for sale. 
C)  Ending inventory. 
D)  Sales. 
E)  Shown on the balance sheet.

Question 11

Martin Corporation allows customers to return merchandise within 60 days of purchase.At year-end,Martin estimates that sales of $20,000,with a cost of $14,000 will be returned in the upcoming year.The unadjusted balance in Inventory Returns Estimated is a debit of $4,000,and the unadjusted balance in Sales Refund Payable is a credit of $2,500.Prepare the adjusting entries necessary to record the revenue side and cost side estimates for returns and allowances.

Accepted Answer

\[\begin{array} { l c c c } 
\text { Dec

Question 12

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

Accepted Answer

A) True 
 B)False

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.
-Vander uses the periodic inventory system and the gross method of accounting for sales.On September 14,Jepson returns some of the non-defective merchandise,which is restored to inventory.The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Vander must make on September 14 is:

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Bales returns and allowances } & 500 & \
\hline \text { Accounts receivable } & & 500 \
\hline \text { Merchandise inventory } & 350 & \
\hline \text { Cost of goods sold } & & 350 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Sales returns and allowances } & \text { 50d } & \
\hline \text { Accounts receivable } & & 50 \mathrm { q } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & \text { 50d } & \
\hline \text { Sales returns and allowances } & & 50 \mathrm { q } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 500 & \
\hline \text { Sales returns and allowanes } & & 500 \
\hline \text { Cost of goods sold } & 350 & \
\hline \text { Merchandise inventory } & & 350 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Sales returns and allowances } & 350 & \
\hline \text { Accounts receivable } & & 350 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Bales returns and allowances } & 500 & \
\hline \text { Accounts receivable } & & 500 \
\hline \text { Merchandise inventory } & 350 & \
\hline \text { Cost of goods sold } & & 350 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Sales returns and allowances } & \text { 50d } & \
\hline \text { Accounts receivable } & & 50 \mathrm { q } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & \text { 50d } & \
\hline \text { Sales returns and allowances } & & 50 \mathrm { q } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 500 & \
\hline \text { Sales returns and allowanes } & & 500 \
\hline \text { Cost of goods sold } & 350 & \
\hline \text { Merchandise inventory } & & 350 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Sales returns and allowances } & 350 & \
\hline \text { Accounts receivable } & & 350 \
\hline
\end{array}$$

Question 14

Match the following definitions with the appropriate terms.
-A given percent deducted from a list price often granted to customers purchasing large quantities of merchandise.

Accepted Answer

A) Single-step income statement 
B) Acid-test ratio 
C) Multiple-step income statement 
D) Inventory shrinkage 
E) FOB shipping point
F)Selling expenses
G)General and administrative expenses
H)Merchandise inventory
I)Trade discount
J)FOB destination 
A) Single-step income statement 
B) Acid-test ratio 
C) Multiple-step income statement 
D) Inventory shrinkage 
E) FOB shipping point
F)Selling expenses
G)General and administrative expenses
H)Merchandise inventory
I)Trade discount
J)FOB destination

Question 15

The gross method requires a period-end adjusting entry to estimate future sales discounts.

Accepted Answer

A) True 
 B)False

Question 16

Match the following definitions with the appropriate terms.
-An income statement format that shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

Accepted Answer

A) Single-step income statement 
B) Acid-test ratio 
C) Multiple-step income statement 
D) Inventory shrinkage 
E) FOB shipping point
F)Selling expenses
G)General and administrative expenses
H)Merchandise inventory
I)Trade discount
J)FOB destination 
A) Single-step income statement 
B) Acid-test ratio 
C) Multiple-step income statement 
D) Inventory shrinkage 
E) FOB shipping point
F)Selling expenses
G)General and administrative expenses
H)Merchandise inventory
I)Trade discount
J)FOB destination

Question 17

Which of the following accounts is used in the periodic inventory system but not used in the perpetual inventory system?

Accepted Answer

A)  Merchandise Inventory 
B)  Sales 
C)  Sales Returns and Allowances 
D)  Accounts Payable 
E)  Purchases 
A)  Merchandise Inventory 
B)  Sales 
C)  Sales Returns and Allowances 
D)  Accounts Payable 
E)  Purchases

Question 18

The liquidity of a company can be measured using the current ratio and the ________,which only includes the most liquid current assets in its calculation.

Accepted Answer

The answer of The liquidity of a company can be...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Under both the periodic and perpetual inventory systems,the temporary account Purchases Returns and Allowances is used to accumulate the cost of all returns and allowances for a period.

Accepted Answer

A) True 
 B)False

The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

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

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:

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

A company had net sales of $340,500,its cost of goods sold was $257,000,and its net income was $13,750.The company's gross margin ratio equals 24.5%.

A service company earns net income by buying and selling merchandise.

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

Beginning inventory plus net purchases is:

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

Match the following definitions with the appropriate terms. -A given percent deducted from a list price often granted to customers purchasing large quantities of merchandise.

The gross method requires a period-end adjusting entry to estimate future sales discounts.

Match the following definitions with the appropriate terms. -An income statement format that shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

Which of the following accounts is used in the periodic inventory system but not used in the perpetual inventory system?

The liquidity of a company can be measured using the current ratio and the ________,which only includes the most liquid current assets in its calculation.

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

Under both the periodic and perpetual inventory systems,the temporary account Purchases Returns and Allowances is used to accumulate the cost of all returns and allowances for a period.

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

The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

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

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:

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

A company had net sales of $340,500,its cost of goods sold was $257,000,and its net income was $13,750.The company's gross margin ratio equals 24.5%.

A service company earns net income by buying and selling merchandise.

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

Beginning inventory plus net purchases is:

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

Match the following definitions with the appropriate terms. -A given percent deducted from a list price often granted to customers purchasing large quantities of merchandise.

The gross method requires a period-end adjusting entry to estimate future sales discounts.

Match the following definitions with the appropriate terms. -An income statement format that shows detailed computations of net sales and other costs and expenses,and reports subtotals for various classes of items.

Which of the following accounts is used in the periodic inventory system but not used in the perpetual inventory system?

The liquidity of a company can be measured using the current ratio and the ________,which only includes the most liquid current assets in its calculation.

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

Under both the periodic and perpetual inventory systems,the temporary account Purchases Returns and Allowances is used to accumulate the cost of all returns and allowances for a period.

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