Question 1

Classic Car Parts uses a periodic inventory system.From the following details,calculate net purchases.

Accepted Answer

A) $23,100 
B) $18,900 
C) $20,900 
D) $20,200 
A) $23,100 
B) $18,900 
C) $20,900 
D) $20,200 B

Question 2

The entry to close Sales Discounts will include a debit to Income Summary.

Accepted Answer

A) True 
 B)False  True

Question 3

Swanson Company uses a periodic inventory system.From the following details,calculate the cost of goods sold.

Accepted Answer

A) $23,900 
B) $20,100 
C) $25,100 
D) $27,400 
A) $23,900 
B) $20,100 
C) $25,100 
D) $27,400 C

Question 4

The term "inventory," for a merchandiser,refers to ________.

Accepted Answer

A) raw materials that are used for production 
B) equipment that are used in production process 
C) the cost of goods sold 
D) goods held for sale to customers 
A) raw materials that are used for production 
B) equipment that are used in production process 
C) the cost of goods sold 
D) goods held for sale to customers

Question 5

What does the gross profit percentage measure? How is it computed?

Accepted Answer

The gross profit percentage me

Question 6

A company purchased inventory for $3,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in.The company then returned damaged goods worth $200.The invoice was then paid eight days after the purchase.Assuming that there was no beginning inventory balance,the cost of inventory would be ________.(Assume a perpetual inventory system. )

Accepted Answer

A) $2,744 
B) $2,844 
C) $2,900 
D) $2,940 
A) $2,744 
B) $2,844 
C) $2,900 
D) $2,940

Question 7

The operating cycle of a merchandiser begins when the company purchases inventory from a vendor and ends when the company then sells the inventory to a customer.

Accepted Answer

A) True 
 B)False

Question 8

An invoice of $800 for merchandise purchased is showing 2/15,n/30 as terms of credit.If the invoice is paid on or before the fifteenth day,the amount to be paid is ________.

Accepted Answer

A) $784 
B) $800 
C) $816 
D) $819 
A) $784 
B) $800 
C) $816 
D) $819

Question 9

When preparing the worksheet for a merchandising business using the perpetual inventory system,which of the following statements is incorrect?

Accepted Answer

A) The merchandiser's worksheet carries the account Cost of Goods Sold. 
B) The main new account is the Merchandise Inventory account. 
C) The worksheet procedures are not similar to the worksheet procedures for a service company. 
D) The Merchandise Inventory account must be adjusted based on a physical count due to inventory shrinkage. 
A) The merchandiser's worksheet carries the account Cost of Goods Sold. 
B) The main new account is the Merchandise Inventory account. 
C) The worksheet procedures are not similar to the worksheet procedures for a service company. 
D) The Merchandise Inventory account must be adjusted based on a physical count due to inventory shrinkage.

Question 10

When a company uses a perpetual inventory system,all merchandise transactions are updated as and when they occur.However,the inventory account may not show the current balance at all times.

Accepted Answer

A) True 
 B)False

Question 11

When preparing financial statements under the periodic inventory system,a calculation of cost of goods sold must be made.

Accepted Answer

A) True 
 B)False

Question 12

In a periodic inventory system,a sale of inventory involves two entries,one to record Sales Revenue and one to record Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 13

A company purchased inventory for $3,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid $100 cash for freight in.The entry to record payment of invoice within 2 days by the purchaser would include ________.(Assume a perpetual inventory system. )

Accepted Answer

A) a debit to Accounts Payable for $2,940 and a credit to Cash for $2,940 
B) a debit to Accounts Payable for $3,000,a debit to Merchandise Inventory for $100,and a credit to Cash for $2,900 
C) a debit to Accounts Payable for $3,000,a credit to Merchandise Inventory for $60,and a credit to Cash for $2,940 
D) a debit to Accounts Payable for $2,940,a debit to Merchandise Inventory for $60,and a credit to Cash for $3,000 
A) a debit to Accounts Payable for $2,940 and a credit to Cash for $2,940 
B) a debit to Accounts Payable for $3,000,a debit to Merchandise Inventory for $100,and a credit to Cash for $2,900 
C) a debit to Accounts Payable for $3,000,a credit to Merchandise Inventory for $60,and a credit to Cash for $2,940 
D) a debit to Accounts Payable for $2,940,a debit to Merchandise Inventory for $60,and a credit to Cash for $3,000

Question 14

A company purchased inventory for $74,000 from a vendor on account,FOB shipping point,with terms of 3/10,n/30.The company paid the shipper $1,500 cash for freight in.The company paid the vendor nine days after the sale.If there was no beginning inventory,the cost of inventory would be ________.(Assume a perpetual inventory system. )

Accepted Answer

A) $73,280 
B) $75,500 
C) $70,280 
D) $72,500 
A) $73,280 
B) $75,500 
C) $70,280 
D) $72,500

Question 15

VB Specialty Foods,a grocery merchandiser,purchased goods and paid transportation to bring them to the company warehouse.The transportation cost is known as ________.

Accepted Answer

A) freight out 
B) selling expense 
C) freight in 
D) cost of goods sold 
A) freight out 
B) selling expense 
C) freight in 
D) cost of goods sold

Question 16

What does "2/10" mean,with respect to "credit terms of 2/10,n/30"?

Accepted Answer

A) A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date. 
B) Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice. 
C) A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date. 
D) Interest of 10 percent will be charged if invoice is paid after two days. 
A) A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date. 
B) Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice. 
C) A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date. 
D) Interest of 10 percent will be charged if invoice is paid after two days.

Question 17

Which of the following is added to operating income to arrive at net income?

Accepted Answer

A) sales revenue 
B) cost of goods sold 
C) interest revenue 
D) operating expenses 
A) sales revenue 
B) cost of goods sold 
C) interest revenue 
D) operating expenses

Question 18

A merchandiser sold merchandise inventory on account.The journal entry to record sales allowances in the books of the merchandiser,using the perpetual inventory system would be:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 19

On a multi-step income statement,merchandisers report operating expenses in two categories-selling expenses and administrative expenses.

Accepted Answer

A) True 
 B)False

Question 20

Journalize the following purchase transactions for Schaeffer Office Supplies using the periodic inventory system.Explanations are not required.

Accepted Answer

The answer of Journalize the following purchase transactions for Schaeffer...

Exam 5: Merchandising Operations

Classic Car Parts uses a periodic inventory system.From the following details,calculate net purchases.

The entry to close Sales Discounts will include a debit to Income Summary.

Swanson Company uses a periodic inventory system.From the following details,calculate the cost of goods sold.

The term "inventory," for a merchandiser,refers to ________.

What does the gross profit percentage measure? How is it computed?

The operating cycle of a merchandiser begins when the company purchases inventory from a vendor and ends when the company then sells the inventory to a customer.

An invoice of $800 for merchandise purchased is showing 2/15,n/30 as terms of credit.If the invoice is paid on or before the fifteenth day,the amount to be paid is ________.

When preparing the worksheet for a merchandising business using the perpetual inventory system,which of the following statements is incorrect?

When a company uses a perpetual inventory system,all merchandise transactions are updated as and when they occur.However,the inventory account may not show the current balance at all times.

When preparing financial statements under the periodic inventory system,a calculation of cost of goods sold must be made.

In a periodic inventory system,a sale of inventory involves two entries,one to record Sales Revenue and one to record Cost of Goods Sold.

A company purchased inventory for $3,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid $100 cash for freight in.The entry to record payment of invoice within 2 days by the purchaser would include ________.(Assume a perpetual inventory system. )

VB Specialty Foods,a grocery merchandiser,purchased goods and paid transportation to bring them to the company warehouse.The transportation cost is known as ________.

What does "2/10" mean,with respect to "credit terms of 2/10,n/30"?

Which of the following is added to operating income to arrive at net income?

A merchandiser sold merchandise inventory on account.The journal entry to record sales allowances in the books of the merchandiser,using the perpetual inventory system would be:

On a multi-step income statement,merchandisers report operating expenses in two categories-selling expenses and administrative expenses.

Journalize the following purchase transactions for Schaeffer Office Supplies using the periodic inventory system.Explanations are not required.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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