Exam 5: Accounting for Merchandising Operations

Distinguish between cost of goods sold and operating expenses,describing the nature of these two items and their placement on a multistep income statement.

When customers pay with bank credit cards,cash sales are considered to have taken place.

If insured goods are shipped FOB destination,the seller should file a claim for goods damaged in transit.

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

When the periodic inventory system is used,a physical inventory should be taken at the end of the fiscal year.

When freight-in is a relatively small amount,most companies include the cost in

Operating expenses include cost of goods sold.

What is the financing period for a company that takes an average of 50 days to sell inventory,takes an average of 110 days to collect for its sales,and has payment terms of 45 days on its purchases? Show calculations.

Assuming that net cost of purchases was $39,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500,how much was cost of goods sold?

Use this information to answer the following question. The selected accounts and balances for Keystone Market appear as follows: Cost of goods available for sale would appear on the income statement as

Under the perpetual inventory system,the Cost of Goods Sold and Merchandise Inventory accounts are updated with each sale.

Under the periodic inventory system,Cost of Goods Sold must be computed because it is not updated for sales and other transactions during the accounting period.

Using the following information,calculate for 20x5 (a)net sales, (b)beginning merchandise inventory, (c)gross margin,and (d)net income.

The perpetual inventory system relies on a physical count of merchandise for its balance sheet amount.

Sale and purchase of goods should be recorded at their list price,less any trade discount involved.

Each of the following companies is a merchandising business except a

The other revenues and expenses section of a multistep income statement could include all the following except

Use this information to answer the following question. If the income statement were prepared in a multistep form,gross margin from sales would be

A tabulation of invoices at the end of the day showed $1,600 in MasterCard invoices,which were deposited into a bank account at full value,less a 5 percent discount.The entry to record the above events would include an increase in

Under the perpetual inventory system,which of the following accounts would not be used?