Preston Office Furniture uses the periodic inventory system and the gross method of accounting for sales. It had the following transactions during the month of May: e \[\begin{array} { | l | l | } \text { May 3 } & \begin{array} { l } \text { Sold merchandise to a customer on credit for } \$ 600 , \text { terms } 2 / 10 , \mathrm { n } / 30 . \text { The } \\ \text { cost of the merchandise sold was } \$ 350 . \end{array} \\ \hline \text { May 4 } & \begin{array} { l } \text { Sold merchandise to a customer for cash of } \$ 425 . \text { The cost of the } \\ \text { merchandise was } \$ 250 . \end{array} \\ \hline \text { May 6 } & \begin{array} { l } \text { Sold merchandise to a customer on credit for } \$ 1,300 , \text { terms } 2 / 10 , \mathrm { n } / 30 . \text { Th } \\ \text { cost of the merchandise sold was } \$ 750 . \end{array} \\ \hline \text { May 8 } & \begin{array} { l } \text { The customer from May 3 returned merchandise with a selling price of } \\ \$ 100 . \text { The cost of the merchandise returned was } \$ 55 . \end{array} \\ \hline \text { May 15 } & \begin{array} { l } \text { The customer from May } 6 \text { paid the full amount due, less any appropriate } \\ \text { discounts earned. } \end{array} \\ \hline \text { May 31 } & \begin{array} { l } \text { The customer from May 3 paid the full amount due, less any appropriate } \\ \text { discounts earned. } \end{array} \end{array}\] \[\begin{array} { | l | l | } \text { May 3 } & \begin{array} { l } \text { Sold merchandise to a customer on credit for } \$ 600 , \text { terms } 2 / 10 , \mathrm { n } / 30 . \text { The } \\ \text { cost of the merchandise sold was } \$ 350 . \end{array} \\ \hline \text { May 4 } & \begin{array} { l } \text { Sold merchandise to a customer for cash of } \$ 425 . \text { The cost of the } \\ \text { merchandise was } \$ 250 . \end{array} \\ \hline \text { May 6 } & \begin{array} { l } \text { Sold merchandise to a customer on credit for } \$ 1,300 , \text { terms } 2 / 10 , \mathrm { n } / 30 . \text { Th } \\ \text { cost of the merchandise sold was } \$ 750 . \end{array} \\ \hline \text { May 8 } & \begin{array} { l } \text { The customer from May 3 returned merchandise with a selling price of } \\ \$ 100 . \text { The cost of the merchandise returned was } \$ 55 . \end{array} \\ \hline \text { May 15 } & \begin{array} { l } \text { The customer from May } 6 \text { paid the full amount due, less any appropriate } \\ \text { discounts earned. } \end{array} \\ \hline \text { May 31 } & \begin{array} { l } \text { The customer from May 3 paid the full amount due, less any appropriate } \\ \text { discounts earned. } \end{array} \end{array}\] Prepare the required journal entries that Preston Office Furniture must make to record these transactions.

The answer of Preston Office Furniture uses the periodic inventory...

Exam 5: Accounting for Merchandising Operations

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. The journal entry or entries that Vander will make on September 12 is:

(Multiple Choice)

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Question 201

Preston Office Furniture uses the periodic inventory system and the gross method of accounting for sales. It had the following transactions during the month of May: e May 3 Sold merchandise to a customer on credit for \ 600, terms 2/10,/30. The cost of the merchandise sold was \ 350. May 4 Sold merchandise to a customer for cash of \ 425. The cost of the merchandise was \ 250. May 6 Sold merchandise to a customer on credit for \ 1,300, terms 2/10,/30. Th cost of the merchandise sold was \ 750. May 8 The customer from May 3 returned merchandise with a selling price of \ 100. The cost of the merchandise returned was \ 55. May 15 The customer from May 6 paid the full amount due, less any appropriate discounts earned. May 31 The customer from May 3 paid the full amount due, less any appropriate discounts earned. May 3 Sold merchandise to a customer on credit for \ 600, terms 2/10,/30. The cost of the merchandise sold was \ 350. May 4 Sold merchandise to a customer for cash of \ 425. The cost of the merchandise was \ 250. May 6 Sold merchandise to a customer on credit for \ 1,300, terms 2/10,/30. Th cost of the merchandise sold was \ 750. May 8 The customer from May 3 returned merchandise with a selling price of \ 100. The cost of the merchandise returned was \ 55. May 15 The customer from May 6 paid the full amount due, less any appropriate discounts earned. May 31 The customer from May 3 paid the full amount due, less any appropriate discounts earned. Prepare the required journal entries that Preston Office Furniture must make to record these transactions.

(Essay)

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Question 202

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:

(Multiple Choice)

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Question 203

KLM Corporation's quick assets are $5,888,000, its current assets are $11,700,000 and its current liabilities are $8,000,000. Its acid-test ratio equals:

(Multiple Choice)

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Question 204

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

(True/False)

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Question 205

Farmen Company had net sales of $600,000 and cost of goods sold of $450,000. Calculate Farmen's gross profit.

(Essay)

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Question 206

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

(True/False)

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Question 207

Describe the recording process (including costs) for the types of transactions associated with sales of merchandise inventory using a perpetual inventory system.

(Essay)

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Question 208

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

(True/False)

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Question 209

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 mount due. The amount of the cash paid on August 26 equals:

(Multiple Choice)

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Question 210

Under a perpetual inventory system, when a credit customer returns non-defective merchandise to the seller, the seller debits Sales Returns and Allowances and credits Accounts Receivable and also debits Merchandise Inventory and credits Cost of Goods Sold.

(True/False)

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Question 211

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

(True/False)

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Question 212

Inventory Returns Estimated, which reflects an adjustment to inventory for expected future returns, is a liability account reported in the balance sheet, usually under Current Liabilities.

(True/False)

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Question 213

Prentice Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Prentice's net sales for this period equal:

(Multiple Choice)

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Question 214

On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. -The journal entry or entries that Klein will make on March 12 is:

(Multiple Choice)

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Question 215

The current period's ending inventory is:

(Multiple Choice)

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Question 216

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

(Multiple Choice)

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Question 217

Sales discounts has a normal debit balance because it decreases Sales, which has a normal credit balance.

(True/False)

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Question 218

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

(Short Answer)

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Question 219

The profit margin ratio is the same as the gross profit ratio.

(True/False)

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Question 220

Showing 201 - 220 of 258

Exam 5: Accounting for Merchandising Operations

KLM Corporation's quick assets are $5,888,000, its current assets are $11,700,000 and its current liabilities are $8,000,000. Its acid-test ratio equals:

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

Farmen Company had net sales of $600,000 and cost of goods sold of $450,000. Calculate Farmen's gross profit.

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

Describe the recording process (including costs) for the types of transactions associated with sales of merchandise inventory using a perpetual inventory system.

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

Under a perpetual inventory system, when a credit customer returns non-defective merchandise to the seller, the seller debits Sales Returns and Allowances and credits Accounts Receivable and also debits Merchandise Inventory and credits Cost of Goods Sold.

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

Inventory Returns Estimated, which reflects an adjustment to inventory for expected future returns, is a liability account reported in the balance sheet, usually under Current Liabilities.

Prentice Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Prentice's net sales for this period equal:

The current period's ending inventory is:

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

Sales discounts has a normal debit balance because it decreases Sales, which has a normal credit balance.

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

The profit margin ratio is the same as the gross profit ratio.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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