Question 1

Gross profit is equal to

Accepted Answer

A)  sales plus cost of goods sold 
B)  sales plus selling expenses 
C)  sales less selling expenses 
D)  sales less cost of goods sold 
A)  sales plus cost of goods sold 
B)  sales plus selling expenses 
C)  sales less selling expenses 
D)  sales less cost of goods sold

Question 2

Match each of the following items (a-h) with the appropriate definition below.
-The cost associated with delivery of merchandise to the customer.

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 3

Match between columns
                        Premises:  Shipping terms where the ownership of merchandise passes to the buyer when the buyer receives the merchandise.
 Losses of inventory due to theft, damage, spoilage, etc. that cause the actual inventory on hand to be less than that on record.
 Statement where net income is determined by deducting all expenses from all revenues.
 Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.
 Inventory system that updates the inventory account for every purchase and sale transaction.
 Inventory system that updates the inventory account only at the end of the accounting period based on a physical count of inventory on hand.
 Statement that includes subtotals for sales, gross profit, and income from operations in determining net income.
 Shipping terms where the ownership of merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier.

Accepted Answer

The Answer of Credit terms and FOB destination and FOB is...

Question 4

Sellers and buyers are required to record trade discounts.

Accepted Answer

A) True 
 B)False

Question 5

Using the perpetual inventory system, journalize the entries for the following selected transactions:

Accepted Answer

The answer of Using the perpetual inventory system, journalize the...

Question 6

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Accepted Answer

A)  retail 
B)  periodic 
C)  physical 
D)  perpetual 
A)  retail 
B)  periodic 
C)  physical 
D)  perpetual

Question 7

Prepare a multiple-step income statement for Fernandez Co. for the year ended December 31.

Accepted Answer

The answer of Prepare a multiple-step income statement for Fernandez...

Question 8

Using the following information for a periodic inventory system, what is the amount of gross profit?

Accepted Answer

A)  $25,300 
B)  $31,670 
C)  $30,600 
D)  $62,840 
A)  $25,300 
B)  $31,670 
C)  $30,600 
D)  $62,840

Question 9

Match each of the following items (a-h) with the appropriate definition below.
-Account where returned merchandise or price adjustments are recorded by the buyer under the periodic inventory system.

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 10

Match each of the following terms (a-h) with the correct definition below.
-Inventory system that updates the inventory account only at the end of the accounting period based on a physical count of inventory on hand.

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 11

Sampson Co. sold merchandise to Batson Co. on account, $46,000, terms 2/15, net 45. The cost of the goods sold is $38,500. The Batson Co. paid the invoice within the discount period. Prepare the entries that both Sampson and Batson Companies would record for the above. Assume both Sampson and Batson use a perpetual inventory system.

Accepted Answer

Sampson Company Jour

Question 12

Bradford Company had sales of $700,000 for a year. The total assets at the beginning of the year were $240,000, and the total assets at the end of the year were $280,000. The asset turnover ratio is (round answer to 2 decimal places)

Accepted Answer

A)  2.69 
B)  0.40 
C)  2.92 
D)  0.34 
A)  2.69 
B)  0.40 
C)  2.92 
D)  0.34

Question 13

Which of the following accounts should be closed to Retained Earnings at the end of the fiscal year?

Accepted Answer

A)  Inventory 
B)  Accumulated Depreciation 
C)  Customer Refunds Payable 
D)  Cost of Goods Sold 
A)  Inventory 
B)  Accumulated Depreciation 
C)  Customer Refunds Payable 
D)  Cost of Goods Sold

Question 14

The following accounts and their current balances appear in the ledger of Cerelat Co. at the end of its fiscal year, June 30. Cerelat uses a periodic inventory system.
​
   ​
​
-Record the following transactions for Oyster Corp. using the general journal form provided below. Assume Oyster Corp. uses the gross method of recording sales discounts. Omit transaction descriptions from the entries.
​   ​   ​
​

Accepted Answer

The answer of The following accounts and their current balances...

Question 15

During the current year, merchandise is sold for $237,500 cash and $625,000 on account. The cost of the goods sold is $422,300. What is the amount of the gross profit?

Accepted Answer

A)  $440,200 
B)  $1,284,800 
C)  $442,000 
D)  $34,800 
A)  $440,200 
B)  $1,284,800 
C)  $442,000 
D)  $34,800

Question 16

If merchandise sold on account is returned to the seller, the seller acknowledges the return by issuing a

Accepted Answer

A)  sales invoice 
B)  purchase invoice 
C)  credit memo 
D)  debit memo 
A)  sales invoice 
B)  purchase invoice 
C)  credit memo 
D)  debit memo

Question 17

The following information is available for Coulibaly Company:   
Calculate the asset turnover ratio for Coulibaly Company for Year 1 and Year 2.

Accepted Answer

Asset turnover ratio

Question 18

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.

Accepted Answer

A) True 
 B)False

Question 19

Journalize the following transactions for the Evans Company. Assume the company uses a perpetual inventory system.   ​

Accepted Answer

The answer of Journalize the following transactions for the Evans...

Question 20

The primary difference between the periodic and perpetual inventory systems is that a

Accepted Answer

A)  periodic system determines the inventory on hand only at the end of the accounting period 
B)  periodic system keeps a record showing the inventory on hand at all times 
C)  periodic system provides an easy means to determine inventory shrinkage 
D)  periodic system records the cost of the sale on the date the sale is made 
A)  periodic system determines the inventory on hand only at the end of the accounting period 
B)  periodic system keeps a record showing the inventory on hand at all times 
C)  periodic system provides an easy means to determine inventory shrinkage 
D)  periodic system records the cost of the sale on the date the sale is made

Gross profit is equal to

Match each of the following items (a-h) with the appropriate definition below. -The cost associated with delivery of merchandise to the customer.

Sellers and buyers are required to record trade discounts.

Using the perpetual inventory system, journalize the entries for the following selected transactions:

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Prepare a multiple-step income statement for Fernandez Co. for the year ended December 31.

Using the following information for a periodic inventory system, what is the amount of gross profit?

Match each of the following items (a-h) with the appropriate definition below. -Account where returned merchandise or price adjustments are recorded by the buyer under the periodic inventory system.

Match each of the following terms (a-h) with the correct definition below. -Inventory system that updates the inventory account only at the end of the accounting period based on a physical count of inventory on hand.

Bradford Company had sales of $700,000 for a year. The total assets at the beginning of the year were $240,000, and the total assets at the end of the year were $280,000. The asset turnover ratio is (round answer to 2 decimal places)

Which of the following accounts should be closed to Retained Earnings at the end of the fiscal year?

During the current year, merchandise is sold for $237,500 cash and $625,000 on account. The cost of the goods sold is $422,300. What is the amount of the gross profit?

If merchandise sold on account is returned to the seller, the seller acknowledges the return by issuing a

The following information is available for Coulibaly Company: Calculate the asset turnover ratio for Coulibaly Company for Year 1 and Year 2.

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.

Journalize the following transactions for the Evans Company. Assume the company uses a perpetual inventory system.

The primary difference between the periodic and perpetual inventory systems is that a

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

Gross profit is equal to

Match each of the following items (a-h) with the appropriate definition below. -The cost associated with delivery of merchandise to the customer.

Sellers and buyers are required to record trade discounts.

Using the perpetual inventory system, journalize the entries for the following selected transactions:

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Prepare a multiple-step income statement for Fernandez Co. for the year ended December 31.

Using the following information for a periodic inventory system, what is the amount of gross profit?

Match each of the following items (a-h) with the appropriate definition below. -Account where returned merchandise or price adjustments are recorded by the buyer under the periodic inventory system.

Match each of the following terms (a-h) with the correct definition below. -Inventory system that updates the inventory account only at the end of the accounting period based on a physical count of inventory on hand.

Bradford Company had sales of $700,000 for a year. The total assets at the beginning of the year were $240,000, and the total assets at the end of the year were $280,000. The asset turnover ratio is (round answer to 2 decimal places)

Which of the following accounts should be closed to Retained Earnings at the end of the fiscal year?

During the current year, merchandise is sold for $237,500 cash and $625,000 on account. The cost of the goods sold is $422,300. What is the amount of the gross profit?

If merchandise sold on account is returned to the seller, the seller acknowledges the return by issuing a

The following information is available for Coulibaly Company: Calculate the asset turnover ratio for Coulibaly Company for Year 1 and Year 2.

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.

Journalize the following transactions for the Evans Company. Assume the company uses a perpetual inventory system. ​

The primary difference between the periodic and perpetual inventory systems is that a

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

Journalize the following transactions for the Evans Company. Assume the company uses a perpetual inventory system.