Question 1

If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment,the terms are stated as FOB destination.

Accepted Answer

A) True 
 B)False

Question 2

If a $20,000 sale is made on January 1,with terms of 2/10,n/30,how much would the discount be if payment is made on January 9?

Accepted Answer

A) $0 
B) $200 
C) $1,000 
D) $400 
A) $0 
B) $200 
C) $1,000 
D) $400

Question 3

The indirect method of preparing the statement of cash flows reconciles net income with net cash flows from operating activities.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following accounts will NOT be found in the Cost of Merchandise Sold section on the income statement?

Accepted Answer

A) Purchases 
B) Transportation In 
C) Sales Returns and Allowances 
D) Merchandise Inventory 
A) Purchases 
B) Transportation In 
C) Sales Returns and Allowances 
D) Merchandise Inventory

Question 5

Revenue from sources other than the primary operating activity of a business is called other income.

Accepted Answer

A) True 
 B)False

Question 6

A.Bonds Company
The following is a single-step income statement for the A.Bonds Company:
  
-Refer to A.Bonds Company.If the income statement were prepared in a multiple-step format,income from operations would be

Accepted Answer

A) $101,000. 
B) $113,500. 
C) $118,500. 
D) $152,500. 
A) $101,000. 
B) $113,500. 
C) $118,500. 
D) $152,500.

Question 7

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

Accepted Answer

A) selling expenses. 
B) general expenses. 
C) other expenses. 
D) administrative expenses. 
A) selling expenses. 
B) general expenses. 
C) other expenses. 
D) administrative expenses.

Question 8

The sales discount account is a contra account to Sales.

Accepted Answer

A) True 
 B)False

Question 9

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

Accepted Answer

A) consigned. 
B) n/30. 
C) FOB shipping point. 
D) FOB destination. 
A) consigned. 
B) n/30. 
C) FOB shipping point. 
D) FOB destination.

Question 10

A sale of $600 on account subject to a sales tax of 5% would increase account receivable by $570.

Accepted Answer

A) True 
 B)False

Question 11

Refer to Deana,Inc.If Deana,Inc.had $20,000 in beginning inventory,and sold goods costing $300,000,what is the ending inventory balance?

Accepted Answer

A) $165,000 
B) $240,000 
C) $200,000 
D) $185,000 
A) $165,000 
B) $240,000 
C) $200,000 
D) $185,000

Question 12

Sales to customers who use bank credit cards,such as MasterCard and VISA,are generally treated as credit sales.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would be subtracted from gross profit to reach operating income?

Accepted Answer

A) Operating expenses 
B) Other expenses 
C) Income taxes 
D) All of these 
A) Operating expenses 
B) Other expenses 
C) Income taxes 
D) All of these

Question 14

Sales discounts are granted by the seller to customers for payment at the end of the month.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Sales Discounts is used in accounting for transactions with customers.

Accepted Answer

A) True 
 B)False

Question 17

Which expenses are subtracted from gross profit to arrive at income from operations?

Accepted Answer

A) All expenses 
B) Cost of merchandise sold 
C) Operating expenses 
D) Sales expenses 
A) All expenses 
B) Cost of merchandise sold 
C) Operating expenses 
D) Sales expenses

Question 18

The credit terms of a sale are normally indicated on a(n)

Accepted Answer

A) purchase order. 
B) invoice. 
C) bill of lading. 
D) account receivable. 
A) purchase order. 
B) invoice. 
C) bill of lading. 
D) account receivable.

Question 19

Under the perpetual inventory system,the cost of merchandise sold is recorded when sales are made.

Accepted Answer

A) True 
 B)False

Question 20

Orange Co.sells merchandise on credit to Zea Co.in the amount of $9,000.The invoice is dated on September 15 with terms of 1/15,net 45.What is the amount of the discount,and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Accepted Answer

A) $180,September 30 
B) $180,September 25 
C) $90,September 30 
D) $90,September 25 
A) $180,September 30 
B) $180,September 25 
C) $90,September 30 
D) $90,September 25

If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment,the terms are stated as FOB destination.

If a $20,000 sale is made on January 1,with terms of 2/10,n/30,how much would the discount be if payment is made on January 9?

The indirect method of preparing the statement of cash flows reconciles net income with net cash flows from operating activities.

Which of the following accounts will NOT be found in the Cost of Merchandise Sold section on the income statement?

Revenue from sources other than the primary operating activity of a business is called other income.

A.Bonds Company The following is a single-step income statement for the A.Bonds Company: -Refer to A.Bonds Company.If the income statement were prepared in a multiple-step format,income from operations would be

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

The sales discount account is a contra account to Sales.

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

A sale of $600 on account subject to a sales tax of 5% would increase account receivable by $570.

Refer to Deana,Inc.If Deana,Inc.had $20,000 in beginning inventory,and sold goods costing $300,000,what is the ending inventory balance?

Sales to customers who use bank credit cards,such as MasterCard and VISA,are generally treated as credit sales.

Which of the following would be subtracted from gross profit to reach operating income?

Sales discounts are granted by the seller to customers for payment at the end of the month.

Multiple-step income statements show:

Sales Discounts is used in accounting for transactions with customers.

Which expenses are subtracted from gross profit to arrive at income from operations?

The credit terms of a sale are normally indicated on a(n)

Under the perpetual inventory system,the cost of merchandise sold is recorded when sales are made.

Orange Co.sells merchandise on credit to Zea Co.in the amount of $9,000.The invoice is dated on September 15 with terms of 1/15,net 45.What is the amount of the discount,and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

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

If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment,the terms are stated as FOB destination.

If a $20,000 sale is made on January 1,with terms of 2/10,n/30,how much would the discount be if payment is made on January 9?

The indirect method of preparing the statement of cash flows reconciles net income with net cash flows from operating activities.

Which of the following accounts will NOT be found in the Cost of Merchandise Sold section on the income statement?

Revenue from sources other than the primary operating activity of a business is called other income.

A.Bonds Company The following is a single-step income statement for the A.Bonds Company: -Refer to A.Bonds Company.If the income statement were prepared in a multiple-step format,income from operations would be

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

The sales discount account is a contra account to Sales.

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

A sale of $600 on account subject to a sales tax of 5% would increase account receivable by $570.

Refer to Deana,Inc.If Deana,Inc.had $20,000 in beginning inventory,and sold goods costing $300,000,what is the ending inventory balance?

Sales to customers who use bank credit cards,such as MasterCard and VISA,are generally treated as credit sales.

Which of the following would be subtracted from gross profit to reach operating income?

Sales discounts are granted by the seller to customers for payment at the end of the month.

Multiple-step income statements show:

Sales Discounts is used in accounting for transactions with customers.

Which expenses are subtracted from gross profit to arrive at income from operations?

The credit terms of a sale are normally indicated on a(n)

Under the perpetual inventory system,the cost of merchandise sold is recorded when sales are made.

Orange Co.sells merchandise on credit to Zea Co.in the amount of $9,000.The invoice is dated on September 15 with terms of 1/15,net 45.What is the amount of the discount,and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

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