Question 1

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Accepted Answer

A physical inventory must be taken to de

Question 2

Under the perpetual inventory system,the entry to record a purchase return would include a credit to which account?

Accepted Answer

A) Merchandise Inventory 
B) Purchases Returns and Allowances 
C) Accounts Payable 
D) Sales 
A) Merchandise Inventory 
B) Purchases Returns and Allowances 
C) Accounts Payable 
D) Sales

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

Under the periodic inventory system,the Purchases account is used to accumulate all purchases of merchandise for resale.

Accepted Answer

A) True 
 B)False

Question 5

Under the perpetual inventory system,in addition to making the entry to record a sales return,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 6

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

Accepted Answer

A) the amount of information it provides. 
B) its simplicity. 
C) its comprehensiveness. 
D) its use in computing ratios. 
A) the amount of information it provides. 
B) its simplicity. 
C) its comprehensiveness. 
D) its use in computing ratios.

Question 7

The collection of a $800 account within the 2 percent discount period would result in a(n)

Accepted Answer

A) increase to Accounts Receivable for $784. 
B) decrease to Cash for $784. 
C) increase to Sales Discounts for $16. 
D) decrease to Accounts Receivable for $784. 
A) increase to Accounts Receivable for $784. 
B) decrease to Cash for $784. 
C) increase to Sales Discounts for $16. 
D) decrease to Accounts Receivable for $784.

Question 8

Which type of account is Cost of Goods Sold?

Accepted Answer

A) An asset account. 
B) A liability account. 
C) An expense account. 
D) An income account. 
A) An asset account. 
B) A liability account. 
C) An expense account. 
D) An income account.

Question 9

Taking a physical inventory refers to making a count of all merchandise on hand at a particular time.

Accepted Answer

A) True 
 B)False

Question 10

When the terms are FOB shipping point,the title passes at the destinationand the seller pays the transportation costs.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Companies that sell goods that have a high unit value tend to use the perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 13

Sales returns and allowances are deducted from gross sales on the income statement.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) Accounts Receivable for $1,520. 
B) Cash for $1,600. 
C) Sales for $1,520. 
D) Credit Card Expense for $80. 
A) Accounts Receivable for $1,520. 
B) Cash for $1,600. 
C) Sales for $1,520. 
D) Credit Card Expense for $80.

Question 15

Compute the dollar amount of each item indicated by a letter in the following table.Treat each horizontal row of numbers as a separate problem.

Accepted Answer

The answer of Compute the dollar amount of each item...

Question 16

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30.What is the required journal entry to record the transaction under the perpetual inventory system?

Accepted Answer

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

Question 17

A merchandiser's operating cycle concludes with the sale of goods.

Accepted Answer

A) True 
 B)False

Question 18

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.

Question 19

Describe how to compute the cost of goods available for sale.

Accepted Answer

The cost of goods available for sale is

Question 20

The amount of cost of goods available for sale during the year depends on the amounts of

Accepted Answer

A) beginning merchandise inventory,net cost of purchases,and ending merchandise inventory. 
B) beginning merchandise inventory and cost of goods sold. 
C) beginning merchandise inventory,cost of goods sold,and ending merchandise inventory. 
D) beginning merchandise inventory and net cost of purchases. 
A) beginning merchandise inventory,net cost of purchases,and ending merchandise inventory. 
B) beginning merchandise inventory and cost of goods sold. 
C) beginning merchandise inventory,cost of goods sold,and ending merchandise inventory. 
D) beginning merchandise inventory and net cost of purchases.

Exam 6: Accounting for Merchandising Operations

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Under the perpetual inventory system,the entry to record a purchase return would include a credit to which account?

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

Under the periodic inventory system,the Purchases account is used to accumulate all purchases of merchandise for resale.

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

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

The collection of a $800 account within the 2 percent discount period would result in a(n)

Which type of account is Cost of Goods Sold?

Taking a physical inventory refers to making a count of all merchandise on hand at a particular time.

When the terms are FOB shipping point,the title passes at the destinationand the seller pays the transportation costs.

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

Companies that sell goods that have a high unit value tend to use the perpetual inventory system.

Sales returns and allowances are deducted from gross sales on the income statement.

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

Compute the dollar amount of each item indicated by a letter in the following table.Treat each horizontal row of numbers as a separate problem.

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30.What is the required journal entry to record the transaction under the perpetual inventory system?

A merchandiser's operating cycle concludes with the sale of goods.

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

Describe how to compute the cost of goods available for sale.

The amount of cost of goods available for sale during the year depends on the amounts of

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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