Exam 5: Merchandising Operations

A company has purchased inventory and received an invoice that requires the buyer to pay the transportation costs for delivering the merchandise.The terms are ________.

An invoice is also known as a bill.

Weston Jewelers uses the perpetual inventory system.On April 2,Weston sold merchandise with a cost of $5,000 for $10,000 to a customer on account with terms of 2/15,n/30.On April 4,the customer reported damaged goods,and Michelin granted a $2,000 sales allowance.On April 10,Weston received payment from the customer.Calculate the amount of net sales revenue.

The following information relates to Nebula Company. Calculate the operating income.

If goods are sold on terms FOB shipping point,the ________.

The purchase discount amount is calculated on the amount of the invoice minus the returns and allowances.

Journalize the following transactions for a merchandiser that uses the perpetual inventory system. On January 8,inventory was sold for $6,000 on account.Credit terms were 3/15,n/30 (cost $4,500).On January 17,cash was received in full settlement of the January 8 sale.

Under the perpetual inventory system,the journal entry to record cost of goods sold:

Briefly discuss what gross profit represents and how it affects the net earnings of a merchandiser.

Worksheet procedures for a merchandising business using the perpetual inventory system are different from the worksheet procedures for a service business.

A company purchased inventory for $2,200 on account,and recorded the following journal entry: The vendor's invoice showed terms of 3/10,n/30.Give the journal entry for the payment of the invoice 17 days after the invoice date.

A merchandiser returned inventory worth $1,400 that was purchased on account.Under the periodic inventory system,the journal entry to record the return would include ________.

Under a perpetual inventory system,merchandise returned by a customer to the seller is recorded as a ________ in the books of seller.

The Merchandise Inventory account is an expense account that is used only for goods purchased that the business owns and intends to resell to customers.

The net income calculated using either the single-step or multi-step income statement formats is always the same.

Office Supplies Express uses a perpetual inventory system.Journalize the following sales transactions for this company.Explanations are not required.

FOB destination refers to a situation where title to goods while in transit belongs to the ________.

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

Under the perpetual inventory system,two journal entries are used to record the sales of merchandise.One entry records the Sales Revenue and another entry records the Cost of Goods Sold.

In a periodic inventory system,there is no need to record an entry to Merchandise Inventory and Cost of Goods Sold.