Question 1

What are the correct amounts missing from the condensed income statement of Batavia, Inc.  ?   ?

Accepted Answer

A)  Net income: $545,000; Gross profit: $740,000 
B)  Net income: $545,000; Gross profit: $545,000 
C)  Net income: $420,000; Gross profit: $740,000 
D)  Net income: $420,000; Gross profit: $545,000 
A)  Net income: $545,000; Gross profit: $740,000 
B)  Net income: $545,000; Gross profit: $545,000 
C)  Net income: $420,000; Gross profit: $740,000 
D)  Net income: $420,000; Gross profit: $545,000

Question 2

The following entry was recorded in the books of Brighty Company.   What is the impact of this entry on the accounting equation? ​

Accepted Answer

A)  an increase in Assets and an increase in Equity 
B)  an increase in Assets and an increase in Liabilities 
C)  a decrease in Assets and a decrease in Liabilities 
A)  an increase in Assets and an increase in Equity 
B)  an increase in Assets and an increase in Liabilities 
C)  a decrease in Assets and a decrease in Liabilities

Question 3

Match each of the following items (a-h) with the appropriate definition below.
-Expense account for recording shipping costs paid by the seller.

Accepted Answer

A) Freight 
B) Delivery Expense 
C) Inventory 
D) Sales discount 
E) Purchases Returns and Allowances
F)Debit memo
G)Purchases discount
H)Trade discount 
A) Freight 
B) Delivery Expense 
C) Inventory 
D) Sales discount 
E) Purchases Returns and Allowances
F)Debit memo
G)Purchases discount
H)Trade discount

Question 4

Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as

Accepted Answer

A)  sales on account 
B)  sales returns 
C)  cash sales 
D)  sales when the credit card company remits the cash 
A)  sales on account 
B)  sales returns 
C)  cash sales 
D)  sales when the credit card company remits the cash

Question 5

Match each of the following terms (a-h) with the correct definition below.
-Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.

Accepted Answer

A) Credit terms 
B) FOB destination 
C) FOB shipping point 
D) Periodic inventory system 
E) Perpetual inventory system
F)Inventory shrinkage
G)Single-step income statement
H)Multiple-step income statement 
A) Credit terms 
B) FOB destination 
C) FOB shipping point 
D) Periodic inventory system 
E) Perpetual inventory system
F)Inventory shrinkage
G)Single-step income statement
H)Multiple-step income statement

Question 6

Buyers and sellers do not normally record the list prices of merchandise and the trade discounts in accounts.

Accepted Answer

A) True 
 B)False

Question 7

Which account is not classified as a selling expense?

Accepted Answer

A)  Sales Salaries 
B)  Delivery Expense 
C)  Cost of Goods Sold 
D)  Advertising Expense 
A)  Sales Salaries 
B)  Delivery Expense 
C)  Cost of Goods Sold 
D)  Advertising Expense

Question 8

Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record the payment for the merchandise if Isabella Co. pays within the discount period?

Accepted Answer

A)  Accounts Payable-Emma Co., debit $15,000; Cash, credit $15,000 
B)  Accounts Payable-Emma Co., debit $15,450; Cash, credit $15,450 
C)  Accounts Payable-Emma Co., debit $15,000; Freight In, debit $750; Cash, credit $15,750 
D)  Accounts Payable-Emma Co., debit $15,750; Inventory, debit $300; Cash, credit $16,050 
A)  Accounts Payable-Emma Co., debit $15,000; Cash, credit $15,000 
B)  Accounts Payable-Emma Co., debit $15,450; Cash, credit $15,450 
C)  Accounts Payable-Emma Co., debit $15,000; Freight In, debit $750; Cash, credit $15,750 
D)  Accounts Payable-Emma Co., debit $15,750; Inventory, debit $300; Cash, credit $16,050

Question 9

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses a perpetual inventory system. Journalize the following transactions:
​   ​
Journal

Accepted Answer

​ Journal

Question 10

Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows:
​   ​
Journalize the adjusting entry for estimated sales discounts.

Accepted Answer

The answer of Surplus Galore uses the gross method of...

Question 11

A sales discount encourages customers to pay accounts more quickly than if a discount were not available.

Accepted Answer

A) True 
 B)False

Question 12

When companies use a perpetual inventory system, the recording of the purchase of inventory will include a debit to Purchases.

Accepted Answer

A) True 
 B)False

Question 13

Generally, the revenue account for a merchandising business is entitled

Accepted Answer

A)  Sales 
B)  Fees Earned 
C)  Gross Sales 
D)  Gross Profit 
A)  Sales 
B)  Fees Earned 
C)  Gross Sales 
D)  Gross Profit

Question 14

Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Accepted Answer

A)  $194, May 15 
B)  $194, May 16 
C)  $97, May 15 
D)  $97, May 16 
A)  $194, May 15 
B)  $194, May 16 
C)  $97, May 15 
D)  $97, May 16

Question 15

Describe the major differences in preparing the financial statements for a service business and a merchandising business.

Accepted Answer

The answer of Describe the major differences in preparing the...

Question 16

Details of invoices for purchases of merchandise are as follows:   
 What will be the total amount collected on all four invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

Accepted Answer

A)  $10,653 
B)  $10,753 
C)  $10,803 
D)  $$10,863 
A)  $10,653 
B)  $10,753 
C)  $10,803 
D)  $$10,863

Question 17

A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called cash discounts.

Accepted Answer

A) True 
 B)False

Question 18

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Accepted Answer

A)  credit to Customer Refunds Payable 
B)  debit to Inventory 
C)  credit to Inventory 
D)  debit to Cash 
A)  credit to Customer Refunds Payable 
B)  debit to Inventory 
C)  credit to Inventory 
D)  debit to Cash

Question 19

Under a periodic inventory system, closing entries will include

Accepted Answer

A)  debits to Sales, Purchases Returns and Allowances, and Purchases Discounts 
B)  credits to the Allowance for Doubtful Accounts 
C)  adjustments to the inventory account to match physical inventory 
D)  all of these 
A)  debits to Sales, Purchases Returns and Allowances, and Purchases Discounts 
B)  credits to the Allowance for Doubtful Accounts 
C)  adjustments to the inventory account to match physical inventory 
D)  all of these

Question 20

If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freight costs of $125, is paid within 10 days, the amount of the purchases discount is $70.

Accepted Answer

A) True 
 B)False

What are the correct amounts missing from the condensed income statement of Batavia, Inc. ? ?

The following entry was recorded in the books of Brighty Company. What is the impact of this entry on the accounting equation?

Match each of the following items (a-h) with the appropriate definition below. -Expense account for recording shipping costs paid by the seller.

Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as

Match each of the following terms (a-h) with the correct definition below. -Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.

Buyers and sellers do not normally record the list prices of merchandise and the trade discounts in accounts.

Which account is not classified as a selling expense?

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses a perpetual inventory system. Journalize the following transactions: Journal

Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows: Journalize the adjusting entry for estimated sales discounts.

A sales discount encourages customers to pay accounts more quickly than if a discount were not available.

When companies use a perpetual inventory system, the recording of the purchase of inventory will include a debit to Purchases.

Generally, the revenue account for a merchandising business is entitled

Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Describe the major differences in preparing the financial statements for a service business and a merchandising business.

Details of invoices for purchases of merchandise are as follows: What will be the total amount collected on all four invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called cash discounts.

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Under a periodic inventory system, closing entries will include

If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freight costs of $125, is paid within 10 days, the amount of the purchases discount is $70.

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Exam 5: Accounting for Retail Businesses

What are the correct amounts missing from the condensed income statement of Batavia, Inc. ? ?

The following entry was recorded in the books of Brighty Company. What is the impact of this entry on the accounting equation? ​

Match each of the following items (a-h) with the appropriate definition below. -Expense account for recording shipping costs paid by the seller.

Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as

Match each of the following terms (a-h) with the correct definition below. -Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.

Buyers and sellers do not normally record the list prices of merchandise and the trade discounts in accounts.

Which account is not classified as a selling expense?

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses a perpetual inventory system. Journalize the following transactions: ​ ​ Journal

Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows: ​ ​ Journalize the adjusting entry for estimated sales discounts.

A sales discount encourages customers to pay accounts more quickly than if a discount were not available.

When companies use a perpetual inventory system, the recording of the purchase of inventory will include a debit to Purchases.

Generally, the revenue account for a merchandising business is entitled

Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Describe the major differences in preparing the financial statements for a service business and a merchandising business.

Details of invoices for purchases of merchandise are as follows: What will be the total amount collected on all four invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called cash discounts.

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Under a periodic inventory system, closing entries will include

If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freight costs of $125, is paid within 10 days, the amount of the purchases discount is $70.

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

The following entry was recorded in the books of Brighty Company. What is the impact of this entry on the accounting equation?

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses a perpetual inventory system. Journalize the following transactions: Journal

Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows: Journalize the adjusting entry for estimated sales discounts.