Question 1

The entry to record a $1,500 sale with terms of 2/10,n/30 would include a(n)

Accepted Answer

A) decrease to Accounts Receivable for $1,500. 
B) increase to Sales for $1,500. 
C) increase to Sales Discounts for $30. 
D) decrease to Sales for $1,470. 
A) decrease to Accounts Receivable for $1,500. 
B) increase to Sales for $1,500. 
C) increase to Sales Discounts for $30. 
D) decrease to Sales for $1,470.

Question 2

Under the perpetual inventory system,the return of goods from a customer would increase Cost of Goods Sold and decrease Merchandise Inventory.

Accepted Answer

A) True 
 B)False

Question 3

On June 3,Lakeland Company sold merchandise worth $1,600 on credit,terms 2/10,n/30.The merchandise sold had cost $1,100.The customer paid the amount on June 10. What is the required journal entry to record the payment received under the periodic inventory system?

Accepted Answer

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

Question 4

Use this information to answer the following question.   In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
Net income for the period was

Accepted Answer

A) $173,000. 
B) $93,000. 
C) $63,000. 
D) $203,000. 
A) $173,000. 
B) $93,000. 
C) $63,000. 
D) $203,000.

Question 5

Sales Discounts and Sales Returns and Allowances are contra-revenue accounts.

Accepted Answer

A) True 
 B)False

Question 6

Cost of goods sold is a type of expense.

Accepted Answer

A) True 
 B)False

Question 7

When a U.S.company does business with a British company and payment is in British pounds,an exchange gain or loss occurs if the exchange rate between dollars and pounds changes between the date of sale and the date of payment.

Accepted Answer

A) True 
 B)False

Question 8

If it takes Diamondback Enterprises 90 days to sell inventory,46 days to collect from the sale,and creditors' payment terms are 60 days,the financing period is

Accepted Answer

A) 196 days. 
B) 46 days. 
C) 90 days. 
D) 76 days. 
A) 196 days. 
B) 46 days. 
C) 90 days. 
D) 76 days.

Question 9

Terms of "n/10 eom" mean that payment is due 10 days after the end of the month.

Accepted Answer

A) True 
 B)False

Question 10

The net cost of purchases is found by adding freight-in to net purchases.

Accepted Answer

A) True 
 B)False

Question 11

Other revenues and expenses appears as a separate section on a single-step income statement.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an actual account on the books?

Accepted Answer

A) Cost of goods sold. 
B) Gross margin. 
C) Net income. 
D) Income from operations. 
A) Cost of goods sold. 
B) Gross margin. 
C) Net income. 
D) Income from operations.

Question 13

Compare and contrast the following terms:
a.Trade discount and sales discount.
b.FOB shipping point and FOB destination

Accepted Answer

a.Sellers quote prices in different ways

Question 14

Which of the following is not classified as a selling expense on the income statement?

Accepted Answer

A) Sales salaries expense. 
B) Interest expense. 
C) Freight-out expense. 
D) Advertising expense. 
A) Sales salaries expense. 
B) Interest expense. 
C) Freight-out expense. 
D) Advertising expense.

Question 15

Under the perpetual inventory system,the return of goods from a customer is recorded with a debit to Sales Returns and Allowances.

Accepted Answer

A) True 
 B)False

Question 16

Exchange gains and losses are reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 17

Freight-in is treated as an addition in the cost of goods sold section of the income statement.

Accepted Answer

A) True 
 B)False

Question 18

The faster goods are sold and collection is made,the shorter the financing period.

Accepted Answer

A) True 
 B)False

Question 19

If it takes 45 days to sell inventory,30 days to collect for the sale,and creditors' payment terms are 60 days,the financing period is 135 days.

Accepted Answer

A) True 
 B)False

Question 20

Wolf Equipment uses a perpetual inventory method.Discuss how Wolf Equipment accounts for purchase returns and allowances.

Accepted Answer

Under the perpetual inventory system,whe

Exam 5: Accounting for Merchandising Operations

The entry to record a $1,500 sale with terms of 2/10,n/30 would include a(n)

Under the perpetual inventory system,the return of goods from a customer would increase Cost of Goods Sold and decrease Merchandise Inventory.

On June 3,Lakeland Company sold merchandise worth $1,600 on credit,terms 2/10,n/30.The merchandise sold had cost $1,100.The customer paid the amount on June 10. What is the required journal entry to record the payment received under the periodic inventory system?

Use this information to answer the following question. In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000. Net income for the period was

Sales Discounts and Sales Returns and Allowances are contra-revenue accounts.

Cost of goods sold is a type of expense.

When a U.S.company does business with a British company and payment is in British pounds,an exchange gain or loss occurs if the exchange rate between dollars and pounds changes between the date of sale and the date of payment.

If it takes Diamondback Enterprises 90 days to sell inventory,46 days to collect from the sale,and creditors' payment terms are 60 days,the financing period is

Terms of "n/10 eom" mean that payment is due 10 days after the end of the month.

The net cost of purchases is found by adding freight-in to net purchases.

Other revenues and expenses appears as a separate section on a single-step income statement.

Which of the following is an actual account on the books?

Compare and contrast the following terms: a.Trade discount and sales discount. b.FOB shipping point and FOB destination

Which of the following is not classified as a selling expense on the income statement?

Under the perpetual inventory system,the return of goods from a customer is recorded with a debit to Sales Returns and Allowances.

Exchange gains and losses are reported on the income statement.

Freight-in is treated as an addition in the cost of goods sold section of the income statement.

The faster goods are sold and collection is made,the shorter the financing period.

If it takes 45 days to sell inventory,30 days to collect for the sale,and creditors' payment terms are 60 days,the financing period is 135 days.

Wolf Equipment uses a perpetual inventory method.Discuss how Wolf Equipment accounts for purchase returns and allowances.

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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