Exam 5: Accounting for Merchandising Operations

If a U.S.company sells goods for a fixed number of British pounds,and the exchange rate has risen from $1.60 per pound to $1.65 per pound by the time collection is made,the U.S.company would record an exchange loss.

FOB shipping point means that the seller incurs the shipping costs.

Under the periodic inventory system

Brendan Company sold merchandise worth $1,600 on credit,terms n/15 and on the next day the customer returned merchandise worth $100,which cost $60 for Brendan Company.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

For a merchandising company,the difference between net sales and operating expenses is called gross margin.

The change in merchandise inventory level from the beginning to the end of the year affects cost of goods sold.

Use this information to answer the following question. In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000. Cost of goods sold for the period was

Which type of account is Cost of Goods Sold?

When the terms of sale include a sales discount,it usually is advisable for the buyer to pay within the discount period.

Use this information to answer the following question. In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000. Net cost of purchases for the period were

The last step in the operating cycle is the

The perpetual inventory system provides an up-to-date amount of inventory on hand.

An advantage of the single-step income statement over the multistep form is

If it takes 30 days to sell inventory,60 days to collect for the sale,and creditors' terms are 10 days,the financing period is 80 days.

The fee paid by a retailer to a credit card company is considered a contra-revenue account by the retailer.

The single-step and multistep income statements result in different net income amounts.

Income from operations is the difference between gross margin and operating expenses.

Which of the following items is not shown on a single-step income statement?

With the periodic inventory system,cost of goods available for sale must be calculated after cost of goods sold.

Ending merchandise inventory is not included in the calculation of cost of goods available for sale.