Question 1

When the terms of sale are FOB shipping point,the buyer pays the freight charges.

Accepted Answer

A) True 
 B)False

Question 2

Sellers and buyers are required to record trade discounts.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a difference between a retail business and a service business?

Accepted Answer

A)  in what is sold 
B)  the inclusion of gross profit on the income statement 
C)  accounting equation 
D)  inventory included on the balance sheet 
A)  in what is sold 
B)  the inclusion of gross profit on the income statement 
C)  accounting equation 
D)  inventory included on the balance sheet

Question 4

In a perpetual inventory system,the Inventory account is only used to reflect the beginning inventory.

Accepted Answer

A) True 
 B)False

Question 5

If the buyer bears the freight costs related to a purchase,the terms are said to be FOB destination.

Accepted Answer

A) True 
 B)False

Question 6

Travis Company purchased merchandise on account from a supplier for $5,700,terms 2 / 10,net 30.Travis Company paid for the merchandise within the discount period.
​Under a perpetual inventory system,record the journal entries required for the above transactions.

Accepted Answer

The answer of Travis Company purchased merchandise on account from...

Question 7

Conquest Company uses a perpetual inventory system.Conquest purchased $1,500 of merchandise on account and payment was made within the discount period.The credit terms were 2 / 10,n / 30.Journalize Conquest's purchase and payment.

Accepted Answer

The answer of Conquest Company uses a perpetual inventory system.Conquest...

Question 8

Using the following data taken from Payton Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended May 31.
​

Accepted Answer

The answer of Using the following data taken from Payton...

Question 9

Calculate the gross profit for Jefferson Company based on the following:

Accepted Answer

A)  $495,500 
B)  $183,500 
C)  $721,500 
D)  $226,000 
A)  $495,500 
B)  $183,500 
C)  $721,500 
D)  $226,000

Question 10

During the current year,merchandise is sold for $137,500 cash and $425,600 on account.The cost of the goods sold is $322,325.What is the amount of the gross profit?

Accepted Answer

$137,500 +

Question 11

If the perpetual inventory system is used,an account entitled Cost of Goods Sold is included in the general ledger.

Accepted Answer

A) True 
 B)False

Question 12

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

Accepted Answer

A)  Jan.1 Inventory 1,600
Accounts Payable 1,600 
B)  Jan.1 Office Supplies 1,600
Accounts Payable 1,600 
C)  Jan.1 Purchases 1,600
Accounts Payable 1,600 
D)  Jan.1 Purchases 1,600
Accounts Receivable 1,600 
A)  Jan.1 Inventory 1,600
Accounts Payable 1,600 
B)  Jan.1 Office Supplies 1,600
Accounts Payable 1,600 
C)  Jan.1 Purchases 1,600
Accounts Payable 1,600 
D)  Jan.1 Purchases 1,600
Accounts Receivable 1,600

Question 13

Multiple-step income statements show

Accepted Answer

A)  gross profit but not income from operations 
B)  neither gross profit nor income from operations 
C)  both gross profit and income from operations 
D)  income from operations but not gross profit 
A)  gross profit but not income from operations 
B)  neither gross profit nor income from operations 
C)  both gross profit and income from operations 
D)  income from operations but not gross profit

Question 14

When merchandise purchased on account is returned under the perpetual inventory system,the buyer would debit

Accepted Answer

A)  Inventory 
B)  Purchases Returns and Allowances 
C)  Accounts Payable 
D)  Accounts Receivable 
A)  Inventory 
B)  Purchases Returns and Allowances 
C)  Accounts Payable 
D)  Accounts Receivable

Question 15

Cost of goods sold is the amount that the merchandising company pays for the merchandise it intends to sell.

Accepted Answer

A) True 
 B)False

Question 16

Under the periodic inventory system,the journal entry to record the purchase of inventory will include a debit to

Accepted Answer

A)  Inventory 
B)  Purchases 
C)  Accounts Payable 
D)  Cost of Merchandise Purchased 
A)  Inventory 
B)  Purchases 
C)  Accounts Payable 
D)  Cost of Merchandise Purchased

Question 17

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended March 31.
​

Accepted Answer

The answer of Using the following data taken from Hsu's...

Question 18

Purchased goods in transit,shipped FOB destination,should be excluded from ending inventory of the buyer.

Accepted Answer

A) True 
 B)False

Question 19

Closing entries for a merchandising business are not similar to those for a service business.

Accepted Answer

A) True 
 B)False

Question 20

Under the perpetual inventory system,all purchases of merchandise are debited to the account

Accepted Answer

A)  Inventory 
B)  Cost of Goods Sold 
C)  Inventory Available for Sale 
D)  Purchases 
A)  Inventory 
B)  Cost of Goods Sold 
C)  Inventory Available for Sale 
D)  Purchases

Exam 5: Accounting for Merchandising Businesses

When the terms of sale are FOB shipping point,the buyer pays the freight charges.

Sellers and buyers are required to record trade discounts.

Which of the following is not a difference between a retail business and a service business?

In a perpetual inventory system,the Inventory account is only used to reflect the beginning inventory.

If the buyer bears the freight costs related to a purchase,the terms are said to be FOB destination.

Travis Company purchased merchandise on account from a supplier for $5,700,terms 2 / 10,net 30.Travis Company paid for the merchandise within the discount period. ​Under a perpetual inventory system,record the journal entries required for the above transactions.

Conquest Company uses a perpetual inventory system.Conquest purchased $1,500 of merchandise on account and payment was made within the discount period.The credit terms were 2 / 10,n / 30.Journalize Conquest's purchase and payment.

Using the following data taken from Payton Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended May 31. ​

Calculate the gross profit for Jefferson Company based on the following:

During the current year,merchandise is sold for $137,500 cash and $425,600 on account.The cost of the goods sold is $322,325.What is the amount of the gross profit?

If the perpetual inventory system is used,an account entitled Cost of Goods Sold is included in the general ledger.

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

Multiple-step income statements show

When merchandise purchased on account is returned under the perpetual inventory system,the buyer would debit

Cost of goods sold is the amount that the merchandising company pays for the merchandise it intends to sell.

Under the periodic inventory system,the journal entry to record the purchase of inventory will include a debit to

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended March 31. ​

Purchased goods in transit,shipped FOB destination,should be excluded from ending inventory of the buyer.

Closing entries for a merchandising business are not similar to those for a service business.

Under the perpetual inventory system,all purchases of merchandise are debited to the account

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing 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

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Travis Company purchased merchandise on account from a supplier for $5,700,terms 2 / 10,net 30.Travis Company paid for the merchandise within the discount period. Under a perpetual inventory system,record the journal entries required for the above transactions.

Using the following data taken from Payton Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended May 31.

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended March 31.