Question 1

Under the periodic inventory system,the Purchases account is used to accumulate all purchases of merchandise for resale.

Accepted Answer

A) True 
 B)False

Question 2

Joan and Pat Clair are sisters who each own and operate shops selling the latest electronics in neighboring towns.They decide to have a contest to see whose shop can be more profitable for the year.At year-end,Joan's records show sales of $210,000,cost of goods sold of $110,000,and operating expenses of $42,000.The records of Pat's shop reveal sales of $216,000,cost of goods sold of $124,000,and operating expenses of $38,000.Pat's shop also had other revenue of $6,000 received for allowing the shop to be used in taping a television show.Each sister claims to have won the contest.Provide explanations as to why each would think so,and then name the winner

Accepted Answer

Joan believes she won the contest becaus

Question 3

An American company makes a credit sale of goods to a company in London for 20,000 British pounds.On the date of sale,the exchange rate was $1.60 per pound.However,on the date payment was received,the exchange rate had risen to $1.70 per pound.As a result,the American company would record

Accepted Answer

A) an exchange gain of $2,000. 
B) an exchange loss of $200. 
C) an exchange loss of $2,000. 
D) no exchange gain or loss. 
A) an exchange gain of $2,000. 
B) an exchange loss of $200. 
C) an exchange loss of $2,000. 
D) no exchange gain or loss.

Question 4

The operating cycle is the average days' inventory on hand minus the average number of days to collect credit sales.

Accepted Answer

A) True 
 B)False

Question 5

Compute the dollar amount of each item indicated by a letter in the following table.Treat each horizontal row of numbers as a separate problem.

Accepted Answer

The answer of Compute the dollar amount of each item...

Question 6

Sales Discounts and Sales Returns and Allowances have normal credit balances.

Accepted Answer

A) True 
 B)False

Question 7

The entry to record a purchase of $12,000 in merchandise assuming terms of 2/10,n/30 and a periodic inventory system would include a(n)

Accepted Answer

A) increase to Accounts Payable for $12,000. 
B) increase to Purchases Discounts for $240. 
C) decrease to Purchases for $12,000. 
D) decrease to Accounts Payable for $11,760. 
A) increase to Accounts Payable for $12,000. 
B) increase to Purchases Discounts for $240. 
C) decrease to Purchases for $12,000. 
D) decrease to Accounts Payable for $11,760.

Question 8

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30 and returned merchandise worth $200 on the next day.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Accepted Answer

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

Question 9

On June 3,Addison Company purchased merchandise worth $1,600 on credit,terms 2/10,n/30.The account was paid on June 10.What is the required journal entry to record the payment under the periodic inventory system?

Accepted Answer

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

Question 10

Match between columns
                        Premises: Freight-Out Expense
Accumulated Depreciation
Utilities Expense for Store
Company President's Salary
Interest Income
Inventories
Interest Expense
Office Salaries Expense for Headquarters
Interest Receivable
Sales Returns and Allowances

Accepted Answer

The Answer of Selling expenses and Revenues and Not on is...

Question 11

Use this information to answer the following question.   If the income statement were prepared in a multistep form,excess of other expenses over other revenues would be

Accepted Answer

A) $12,750. 
B) $6,500. 
C) $19,000. 
D) $6,250. 
A) $12,750. 
B) $6,500. 
C) $19,000. 
D) $6,250.

Question 12

Feathertouch Company sold merchandise worth $1,600 on credit,terms n/15.The merchandise sold had cost $1,100.What is the required journal entry to record the transaction and to transfer the cost of merchandise inventory to cost of goods sold under the periodic inventory system?

Accepted Answer

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

Question 13

Copper,Inc.purchased merchandise worth $1,800 on credit,terms n/30 and returned merchandise worth $200 on next day.What is the required journal entry to record the merchandise returns under the periodic inventory system?

Accepted Answer

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

Question 14

Under the perpetual inventory system

Accepted Answer

A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transferred to the Sales Revenue account. 
C) the balance of the Merchandise Inventory account is only accurate on the balance sheet date. 
D) All of these choices. 
A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transferred to the Sales Revenue account. 
C) the balance of the Merchandise Inventory account is only accurate on the balance sheet date. 
D) All of these choices.

Question 15

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30.What is the required journal entry to record the transaction under the perpetual inventory system?

Accepted Answer

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

Question 16

A retail operation would not have to take a physical inventory if it uses a perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 17

A merchandiser's operating cycle concludes with the sale of goods.

Accepted Answer

A) True 
 B)False

Question 18

Freight-in is considered a cost of merchandise purchased.

Accepted Answer

A) True 
 B)False

Question 19

Describe how to compute the cost of goods available for sale.

Accepted Answer

The cost of goods available for sale is

Question 20

Under the perpetual inventory system

Accepted Answer

A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transferred to the Cost of Goods Sold account. 
C) the balance of the Merchandise Inventory account equals the cost of goods on hand. 
D) All of these choices. 
A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transferred to the Cost of Goods Sold account. 
C) the balance of the Merchandise Inventory account equals the cost of goods on hand. 
D) All of these choices.

Exam 5: Accounting for Merchandising Operations

Under the periodic inventory system,the Purchases account is used to accumulate all purchases of merchandise for resale.

An American company makes a credit sale of goods to a company in London for 20,000 British pounds.On the date of sale,the exchange rate was $1.60 per pound.However,on the date payment was received,the exchange rate had risen to $1.70 per pound.As a result,the American company would record

The operating cycle is the average days' inventory on hand minus the average number of days to collect credit sales.

Compute the dollar amount of each item indicated by a letter in the following table.Treat each horizontal row of numbers as a separate problem.

Sales Discounts and Sales Returns and Allowances have normal credit balances.

The entry to record a purchase of $12,000 in merchandise assuming terms of 2/10,n/30 and a periodic inventory system would include a(n)

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30 and returned merchandise worth $200 on the next day.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

On June 3,Addison Company purchased merchandise worth $1,600 on credit,terms 2/10,n/30.The account was paid on June 10.What is the required journal entry to record the payment under the periodic inventory system?

Use this information to answer the following question. If the income statement were prepared in a multistep form,excess of other expenses over other revenues would be

Feathertouch Company sold merchandise worth $1,600 on credit,terms n/15.The merchandise sold had cost $1,100.What is the required journal entry to record the transaction and to transfer the cost of merchandise inventory to cost of goods sold under the periodic inventory system?

Copper,Inc.purchased merchandise worth $1,800 on credit,terms n/30 and returned merchandise worth $200 on next day.What is the required journal entry to record the merchandise returns under the periodic inventory system?

Under the perpetual inventory system

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30.What is the required journal entry to record the transaction under the perpetual inventory system?

A retail operation would not have to take a physical inventory if it uses a perpetual inventory system.

A merchandiser's operating cycle concludes with the sale of goods.

Freight-in is considered a cost of merchandise purchased.

Describe how to compute the cost of goods available for sale.

Under the perpetual inventory system

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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