Question 1

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 2

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 3

Given the following information,prepare in good form the cost of goods sold section of an income statement for 20x5.

Accepted Answer

The answer of Given the following information,prepare in good form...

Question 4

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 5

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

Accepted Answer

A) True 
 B)False

Question 6

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.

Accepted Answer

A) True 
 B)False

Question 7

Freight-in is considered a cost of merchandise purchased.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

The Answer of Selling expenses and Cost of goods sold is...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

If creditors' payment terms are 60 days,financing period is 20 days,and it takes 30 days to collect the amount from customers.What time does it take to sell the inventory?

Accepted Answer

A) 60 days. 
B) 20 days. 
C) 30 days. 
D) 50 days. 
A) 60 days. 
B) 20 days. 
C) 30 days. 
D) 50 days.

Question 11

The periodic inventory system has traditionally been used most commonly by companies that sell

Accepted Answer

A) low-priced,high-volume merchandise. 
B) low-priced,low-volume merchandise. 
C) high-priced,low-volume merchandise. 
D) high-priced,high-volume merchandise. 
A) low-priced,high-volume merchandise. 
B) low-priced,low-volume merchandise. 
C) high-priced,low-volume merchandise. 
D) high-priced,high-volume merchandise.

Question 12

Given the following information,prepare in good form the cost of goods sold section of an income statement for 20x5.

Accepted Answer

The answer of Given the following information,prepare in good form...

Question 13

On the income statement,freight-in is treated as an operating expense.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) Cost of Goods Sold 
B) Merchandise Inventory 
C) Sales 
D) Purchases 
A) Cost of Goods Sold 
B) Merchandise Inventory 
C) Sales 
D) Purchases

Question 15

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

Accepted Answer

A) interest expense. 
B) interest income. 
C) dividend income. 
D) insurance expense. 
A) interest expense. 
B) interest income. 
C) dividend income. 
D) insurance expense.

Question 16

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.

Accepted Answer

A) True 
 B)False

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

Under the perpetual inventory system,the Cost of Goods Sold account is updated continually throughout the period.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

Gross marg

Question 20

Which of the following goods would not be included in merchandise inventory for a purchasing company?

Accepted Answer

A) Goods in transit shipped FOB shipping point 
B) Goods on hand in the showroom 
C) Goods in transit shipped FOB destination 
D) Goods ordered and received from the supplier 
A) Goods in transit shipped FOB shipping point 
B) Goods on hand in the showroom 
C) Goods in transit shipped FOB destination 
D) Goods ordered and received from the supplier

Exam 6: Accounting for Merchandising Operations

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

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

Given the following information,prepare in good form the cost of goods sold section of an income statement for 20x5.

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?

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

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.

Freight-in is considered a cost of merchandise purchased.

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

If creditors' payment terms are 60 days,financing period is 20 days,and it takes 30 days to collect the amount from customers.What time does it take to sell the inventory?

The periodic inventory system has traditionally been used most commonly by companies that sell

Given the following information,prepare in good form the cost of goods sold section of an income statement for 20x5.

On the income statement,freight-in is treated as an operating expense.

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

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

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.

The perpetual inventory system

Under the perpetual inventory system,the Cost of Goods Sold account is updated continually throughout the period.

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

Which of the following goods would not be included in merchandise inventory for a purchasing company?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

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 and Capital Budgeting

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