Question 1

Gross margin is the difference between net sales and

Accepted Answer

A) net income. 
B) cost of goods sold plus operating expenses. 
C) operating expenses. 
D) cost of goods sold. 
A) net income. 
B) cost of goods sold plus operating expenses. 
C) operating expenses. 
D) cost of goods sold.

Question 2

Under the periodic inventory system,the return of goods to the supplier is recorded with a debit to Purchases Returns and Allowances.

Accepted Answer

A) True 
 B)False

Question 3

Use this information to answer the following question.   In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000.
If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

Accepted Answer

A) understated by $11,000. 
B) overstated by $4,000. 
C) understated by $7,000. 
D) understated by $4,000. 
A) understated by $11,000. 
B) overstated by $4,000. 
C) understated by $7,000. 
D) understated by $4,000.

Question 4

When the terms are FOB shipping point,the title passes at the point of origin and the buyer pays the transportation costs.

Accepted Answer

A) True 
 B)False

Question 5

From the following data,calculate the amount of gross margin and gross purchases.

Accepted Answer

Gross marg

Question 6

Use this information to answer the following question.  If the income statement were prepared in a multistep form,operating expenses would be

Accepted Answer

A) $46,000. 
B) $16,000. 
C) $22,250. 
D) $40,000. 
A) $46,000. 
B) $16,000. 
C) $22,250. 
D) $40,000.

Question 7

The entry to record payment of a $3,000 purchase within the 2 percent discount period would include a(n)

Accepted Answer

A) decrease to Accounts Payable for $2,940. 
B) increase to Purchases Discounts for $60. 
C) increase to Accounts Payable for $3,000. 
D) increase to Cash for $3,000. 
A) decrease to Accounts Payable for $2,940. 
B) increase to Purchases Discounts for $60. 
C) increase to Accounts Payable for $3,000. 
D) increase to Cash for $3,000.

Question 8

Under the perpetual inventory system,in addition to making the entry to record a sales return by a customer,a company would

Accepted Answer

A) increase Merchandise Inventory and decrease Cost of Goods Sold. 
B) increase Cost of Goods Sold and decrease Purchases. 
C) increase Cost of Goods Sold and decrease Merchandise Inventory. 
D) make no additional entry until the end of the period. 
A) increase Merchandise Inventory and decrease Cost of Goods Sold. 
B) increase Cost of Goods Sold and decrease Purchases. 
C) increase Cost of Goods Sold and decrease Merchandise Inventory. 
D) make no additional entry until the end of the period.

Question 9

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

Accepted Answer

A) True 
 B)False

Question 10

If a U.S.company purchases goods for a fixed number of British pounds,and the exchange rate has fallen from $1.55 per pound to $1.50 per pound by the time payment is made,the U.S.company would record an exchange gain.

Accepted Answer

A) True 
 B)False

Question 11

Under the perpetual inventory system,the return of goods to the supplier is recorded with a credit to Merchandise Inventory.

Accepted Answer

A) True 
 B)False

Question 12

The use of major credit cards does not require sellers to establish the customer's credit.

Accepted Answer

A) True 
 B)False

Question 13

Purchase discounts are discounts that a buyer takes for the early payment of merchandise.

Accepted Answer

A) True 
 B)False

Question 14

Under the perpetual inventory system,when merchandise is sold,its cost is transferred from the Merchandise Inventory account to the Sales account.

Accepted Answer

A) True 
 B)False

Question 15

If a U.S.company purchases goods from a British supplier for a fixed number of U.S.dollars,an exchange gain or loss would not arise for the U.S.company,even if the exchange rate has changed between the time of purchase and the time of payment.

Accepted Answer

A) True 
 B)False

Question 16

Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the cost of goods available for sale for the year ended December 31,20x5.

Accepted Answer

@#IMG-DLM& Cost of Goods Available for Sale must b

Question 17

The perpetual inventory system

Accepted Answer

A) reduces the amount of clerical work. 
B) eliminates the need for a physical count of the inventory. 
C) keeps a continuous record of the quantity of inventory items. 
D) All of these choices. 
A) reduces the amount of clerical work. 
B) eliminates the need for a physical count of the inventory. 
C) keeps a continuous record of the quantity of inventory items. 
D) All of these choices.

Question 18

A company would be more likely to know the amount of inventory on hand if it used the periodic inventory system rather than the perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 19

On June 3,Addison Company purchased merchandise worth $1,600 on credit,terms 2/10,n/30.The amount paid on June 15.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 20

The entry to record a sales return from a customer would require a(n)

Accepted Answer

A) decrease to Sales. 
B) increase to Sales. 
C) decrease to Sales Returns and Allowances. 
D) increase to Sales Returns and Allowances. 
A) decrease to Sales. 
B) increase to Sales. 
C) decrease to Sales Returns and Allowances. 
D) increase to Sales Returns and Allowances.

Exam 5: Accounting for Merchandising Operations

Gross margin is the difference between net sales and

Under the periodic inventory system,the return of goods to the supplier is recorded with a debit to Purchases Returns and Allowances.

Use this information to answer the following question. In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000. If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

When the terms are FOB shipping point,the title passes at the point of origin and the buyer pays the transportation costs.

From the following data,calculate the amount of gross margin and gross purchases.

Use this information to answer the following question. If the income statement were prepared in a multistep form,operating expenses would be

The entry to record payment of a $3,000 purchase within the 2 percent discount period would include a(n)

Under the perpetual inventory system,in addition to making the entry to record a sales return by a customer,a company would

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

If a U.S.company purchases goods for a fixed number of British pounds,and the exchange rate has fallen from $1.55 per pound to $1.50 per pound by the time payment is made,the U.S.company would record an exchange gain.

Under the perpetual inventory system,the return of goods to the supplier is recorded with a credit to Merchandise Inventory.

The use of major credit cards does not require sellers to establish the customer's credit.

Purchase discounts are discounts that a buyer takes for the early payment of merchandise.

Under the perpetual inventory system,when merchandise is sold,its cost is transferred from the Merchandise Inventory account to the Sales account.

If a U.S.company purchases goods from a British supplier for a fixed number of U.S.dollars,an exchange gain or loss would not arise for the U.S.company,even if the exchange rate has changed between the time of purchase and the time of payment.

Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the cost of goods available for sale for the year ended December 31,20x5.

The perpetual inventory system

A company would be more likely to know the amount of inventory on hand if it used the periodic inventory system rather than the perpetual inventory system.

On June 3,Addison Company purchased merchandise worth $1,600 on credit,terms 2/10,n/30.The amount paid on June 15.What is the required journal entry to record the payment under the periodic inventory system?

The entry to record a sales return from a customer would require a(n)

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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