Question 1

A merchandiser's statement of owner's equity looks exactly like that of a service business.

Accepted Answer

A) True 
 B)False

Question 2

List the three steps,in order of occurrence,of the operating cycle of a merchandising business.

Accepted Answer

1.The operating cycle begins when the co

Question 3

When using the periodic inventory system,the process of recording the ending Merchandise Inventory is completed by making an adjusting entry.

Accepted Answer

A) True 
 B)False

Question 4

WAXS-D,merchandisers of musical instruments,has provided the following details:
 
Credit terms are: 4/20,n/45,FOB shipping point.Calculate the net cost of inventory purchased assuming that there are no other inventory-related transactions during the month.

Accepted Answer

A) $713,000 
B) $665,280 
C) $658,000 
D) $666,680 
A) $713,000 
B) $665,280 
C) $658,000 
D) $666,680

Question 5

The trial balance for a merchandiser is as follows.A physical count of inventory at the end of the accounting year reveals $28,000 of inventory on hand.(Assume a perpetual inventory system. )
   
Give journal entry to record the inventory shrinkage,and the entries to close the Sales Revenue account,the expense accounts and contra revenue accounts with a debit balance,and the the Income Summary account and the Owner,Withdrawals account.

Accepted Answer

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Explanati

Question 6

Brookside Equipment Company uses the periodic inventory system.Brookside reported the following selected amounts at June 30,2017:
   
Requirement A: Compute net sales revenue.

Accepted Answer

Requiremen

Question 7

When using the periodic inventory system,there is no need to record an adjusting entry for inventory shrinkage.

Accepted Answer

A) True 
 B)False

Question 8

Nurix Company sold goods on credit terms n/20 to Jelly Harper Company.This means no discounts are offered,and the amount of the invoice is due 20 days after the invoice date.

Accepted Answer

A) True 
 B)False

Question 9

An adjusted trial balance of Woods Company as of December 31,2017 is given below.Prepare a single-step income statement for the year for the company.

Accepted Answer

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Revenues

Question 10

Delivery expense is a(n)________.

Accepted Answer

A) administrative expense 
B) part of Cost of Goods Sold 
C) operating expense 
D) overhead expense 
A) administrative expense 
B) part of Cost of Goods Sold 
C) operating expense 
D) overhead expense

Question 11

Gross profit is calculated as ________.

Accepted Answer

A) sales revenue less sales discounts and allowances 
B) sales revenue less operating expenses 
C) net sales revenue less sales discounts 
D) net sales revenue less cost of goods sold 
A) sales revenue less sales discounts and allowances 
B) sales revenue less operating expenses 
C) net sales revenue less sales discounts 
D) net sales revenue less cost of goods sold

Question 12

The normal balances of Sales,Sales Discounts,and Sales Returns and Allowances are ________.

Accepted Answer

A) debit,credit,and credit,respectively 
B) debit,debit,and credit,respectively 
C) credit,debit,and debit,respectively 
D) credit,credit,and debit,respectively 
A) debit,credit,and credit,respectively 
B) debit,debit,and credit,respectively 
C) credit,debit,and debit,respectively 
D) credit,credit,and debit,respectively

Question 13

An amount that a merchandiser earns by selling its inventory is known as sales revenue or sales.

Accepted Answer

A) True 
 B)False

Question 14

The following details are provided by Blue Bell Merchandisers.The company uses the periodic inventory system.
 
Calculate the amount of net purchases.

Accepted Answer

A) $150,700 
B) $86,100 
C) $87,700 
D) $111,000 
A) $150,700 
B) $86,100 
C) $87,700 
D) $111,000

Question 15

Landon Jewelers uses the perpetual inventory system.On April 2,Landon sold merchandise with a cost of $3,500 for $8,000 to a customer on account with terms of 1/15,n/30.The journal entry to record the cost of goods sold would be:

Accepted Answer

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

Question 16

An adjusted trial balance for a merchandiser is given below.
   
Give journal entry to close the expense accounts and contra revenue accounts with a debit balance.

Accepted Answer

The answer of An adjusted trial balance for a merchandiser...

Question 17

Best Value Company started its operations on January 1,2017.It engages in buying and selling different types of electronic gadgets.The first step in its operating cycle would be to ________.

Accepted Answer

A) collect cash from customers 
B) sell goods to customers 
C) purchase inventory from vendors 
D) record the sales in accounts 
A) collect cash from customers 
B) sell goods to customers 
C) purchase inventory from vendors 
D) record the sales in accounts

Question 18

On a multi-step income statement,the operating expenses are subtracted from ________ to arrive at operating income.

Accepted Answer

A) net sales 
B) cost of goods sold 
C) net profit 
D) gross profit 
A) net sales 
B) cost of goods sold 
C) net profit 
D) gross profit

Question 19

Credit terms of a merchandising company are 1/15,net 40.This means that the buyer can receive a discount of 1% if the invoice is paid within 40 days of the invoice date.

Accepted Answer

A) True 
 B)False

Question 20

Fashion Jewelers uses the perpetual inventory system.On April 2,Fashion sold goods with a cost of $5,500 for $14,000 with terms of 4/15,n/30.On April 4,the customer reported damaged goods and Fashion granted a $2,000 sales allowance.On April 10,Fashion received the payment for the sale.Give the journal entry that will be recorded on April 10 by Fashion.

Accepted Answer

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

Exam 5: Merchandising Operations

A merchandiser's statement of owner's equity looks exactly like that of a service business.

List the three steps,in order of occurrence,of the operating cycle of a merchandising business.

When using the periodic inventory system,the process of recording the ending Merchandise Inventory is completed by making an adjusting entry.

WAXS-D,merchandisers of musical instruments,has provided the following details: Credit terms are: 4/20,n/45,FOB shipping point.Calculate the net cost of inventory purchased assuming that there are no other inventory-related transactions during the month.

Brookside Equipment Company uses the periodic inventory system.Brookside reported the following selected amounts at June 30,2017: Requirement A: Compute net sales revenue.

When using the periodic inventory system,there is no need to record an adjusting entry for inventory shrinkage.

Nurix Company sold goods on credit terms n/20 to Jelly Harper Company.This means no discounts are offered,and the amount of the invoice is due 20 days after the invoice date.

An adjusted trial balance of Woods Company as of December 31,2017 is given below.Prepare a single-step income statement for the year for the company.

Delivery expense is a(n)________.

Gross profit is calculated as ________.

The normal balances of Sales,Sales Discounts,and Sales Returns and Allowances are ________.

An amount that a merchandiser earns by selling its inventory is known as sales revenue or sales.

The following details are provided by Blue Bell Merchandisers.The company uses the periodic inventory system. Calculate the amount of net purchases.

Landon Jewelers uses the perpetual inventory system.On April 2,Landon sold merchandise with a cost of $3,500 for $8,000 to a customer on account with terms of 1/15,n/30.The journal entry to record the cost of goods sold would be:

An adjusted trial balance for a merchandiser is given below. Give journal entry to close the expense accounts and contra revenue accounts with a debit balance.

Best Value Company started its operations on January 1,2017.It engages in buying and selling different types of electronic gadgets.The first step in its operating cycle would be to ________.

On a multi-step income statement,the operating expenses are subtracted from ________ to arrive at operating income.

Credit terms of a merchandising company are 1/15,net 40.This means that the buyer can receive a discount of 1% if the invoice is paid within 40 days of the invoice date.

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

Filters