Question 1

The merchandise inventory account is found on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 2

State the section(s)of the statement of cash flows prepared by the indirect method (operating activities,investing activities,financing activities,or not reported)and the amount that would be reported for each of the following transactions:

Accepted Answer

The answer of State the section(s)of the statement of cash...

Question 3

When merchandise that was sold is returned,the seller decreases accounts payable.

Accepted Answer

A) True 
 B)False

Question 4

The document issued by the seller that informs the buyer of the details of sales returns is called a debit memorandum.

Accepted Answer

A) True 
 B)False

Question 5

What is subtracted from sales to arrive at net sales?

Accepted Answer

A) Sales returns and allowances 
B) Sales discounts 
C) Both sales discounts and sales returns and allowances 
D) Neither sales discounts nor sales returns and allowances 
A) Sales returns and allowances 
B) Sales discounts 
C) Both sales discounts and sales returns and allowances 
D) Neither sales discounts nor sales returns and allowances

Question 6

Investing activities include

Accepted Answer

A) collecting cash on loans made. 
B) obtaining cash from creditors. 
C) obtaining capital from owners. 
D) repaying money previously borrowed. 
A) collecting cash on loans made. 
B) obtaining cash from creditors. 
C) obtaining capital from owners. 
D) repaying money previously borrowed.

Question 7

Generally,the revenue account for a merchandising business is entitled

Accepted Answer

A) Sales. 
B) Net Sales. 
C) Gross Sales. 
D) Gross Profit. 
A) Sales. 
B) Net Sales. 
C) Gross Sales. 
D) Gross Profit.

Question 8

The difference between sales and cost of merchandise sold for a merchandising business is

Accepted Answer

A) sales. 
B) net sales. 
C) gross sales. 
D) gross profit. 
A) sales. 
B) net sales. 
C) gross sales. 
D) gross profit.

Question 9

Inventory NOT sold at the end of the period is reported as

Accepted Answer

A) cost of goods sold. 
B) old stock. 
C) merchandise inventory. 
D) net purchases. 
A) cost of goods sold. 
B) old stock. 
C) merchandise inventory. 
D) net purchases.

Question 10

On the income statement in the single-step form,the total of all expenses is deducted from the total of all revenues.

Accepted Answer

A) True 
 B)False

Question 11

Gold Co.sold merchandise to Bronze Co.on account,$25,000,terms 2/15,net 45.The cost of the merchandise sold is $18,500.Gold Co.issued a credit memorandum for $2,500 for merchandise returned that originally cost $1,900.Bronze Co.paid the invoice within the discount period.What is amount of net sales from the transactions?

Accepted Answer

A) $22,500 
B) $22,000 
C) $5,450 
D) $22,050 
A) $22,500 
B) $22,000 
C) $5,450 
D) $22,050

Question 12

Which of the following is NOT considered when figuring net purchases?

Accepted Answer

A) Cost of goods sold 
B) Purchase returns 
C) Purchases discounts 
D) Purchases 
A) Cost of goods sold 
B) Purchase returns 
C) Purchases discounts 
D) Purchases

Question 13

A sales invoice included the following information: merchandise price,$6,000;terms 2/10,n/eom.Assuming that a credit for merchandise returned of $600 is granted prior to payment,and that the invoice is paid within the discount period,what is the amount of cash received by the seller?

Accepted Answer

A) $5,880 
B) $5,292 
C) $5,586 
D) $5,592 
A) $5,880 
B) $5,292 
C) $5,586 
D) $5,592

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would NOT affect the operating activities section of the statement of cash flows,using the indirect method?

Accepted Answer

A) Decrease in merchandise inventory 
B) Payment on a note payable 
C) Decrease in unearned rent 
D) Depreciation expense 
A) Decrease in merchandise inventory 
B) Payment on a note payable 
C) Decrease in unearned rent 
D) Depreciation expense

Question 16

Which of the following is NOT an administrative expense?

Accepted Answer

A) Salespersons' salaries 
B) Office salaries 
C) Depreciation of office equipment 
D) Office supplies used 
A) Salespersons' salaries 
B) Office salaries 
C) Depreciation of office equipment 
D) Office supplies used

Question 17

In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.

Accepted Answer

A) True 
 B)False

Question 18

Refer to Deana,Inc.What is the total cost of merchandise purchased?

Accepted Answer

A) $520,000 
B) $485,000 
C) $445,000 
D) $480,000 
A) $520,000 
B) $485,000 
C) $445,000 
D) $480,000

Question 19

Merchandise inventory shrinkage will increase Merchandise Inventory.

Accepted Answer

A) True 
 B)False

Question 20

It is usual for the credit period to begin with the date the merchandise is received by the buyer.

Accepted Answer

A) True 
 B)False

The merchandise inventory account is found on the balance sheet.

State the section(s)of the statement of cash flows prepared by the indirect method (operating activities,investing activities,financing activities,or not reported)and the amount that would be reported for each of the following transactions:

When merchandise that was sold is returned,the seller decreases accounts payable.

The document issued by the seller that informs the buyer of the details of sales returns is called a debit memorandum.

What is subtracted from sales to arrive at net sales?

Investing activities include

Generally,the revenue account for a merchandising business is entitled

The difference between sales and cost of merchandise sold for a merchandising business is

Inventory NOT sold at the end of the period is reported as

On the income statement in the single-step form,the total of all expenses is deducted from the total of all revenues.

Which of the following is NOT considered when figuring net purchases?

A sales invoice included the following information: merchandise price,$6,000;terms 2/10,n/eom.Assuming that a credit for merchandise returned of $600 is granted prior to payment,and that the invoice is paid within the discount period,what is the amount of cash received by the seller?

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

Which of the following would NOT affect the operating activities section of the statement of cash flows,using the indirect method?

Which of the following is NOT an administrative expense?

In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.

Refer to Deana,Inc.What is the total cost of merchandise purchased?

Merchandise inventory shrinkage will increase Merchandise Inventory.

It is usual for the credit period to begin with the date the merchandise is received by the buyer.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 4: Accounting for Merchandising Businesses

The merchandise inventory account is found on the balance sheet.

State the section(s)of the statement of cash flows prepared by the indirect method (operating activities,investing activities,financing activities,or not reported)and the amount that would be reported for each of the following transactions:

When merchandise that was sold is returned,the seller decreases accounts payable.

The document issued by the seller that informs the buyer of the details of sales returns is called a debit memorandum.

What is subtracted from sales to arrive at net sales?

Investing activities include

Generally,the revenue account for a merchandising business is entitled

The difference between sales and cost of merchandise sold for a merchandising business is

Inventory NOT sold at the end of the period is reported as

On the income statement in the single-step form,the total of all expenses is deducted from the total of all revenues.

Which of the following is NOT considered when figuring net purchases?

A sales invoice included the following information: merchandise price,$6,000;terms 2/10,n/eom.Assuming that a credit for merchandise returned of $600 is granted prior to payment,and that the invoice is paid within the discount period,what is the amount of cash received by the seller?

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

Which of the following would NOT affect the operating activities section of the statement of cash flows,using the indirect method?

Which of the following is NOT an administrative expense?

In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.

Refer to Deana,Inc.What is the total cost of merchandise purchased?

Merchandise inventory shrinkage will increase Merchandise Inventory.

It is usual for the credit period to begin with the date the merchandise is received by the buyer.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters