Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

A retailer accepted Visa charge sales totaling $1,000 and deposited the charge slips in the bank.Assuming a credit card discount expense of 4 percent,what would be the increase to Cash and the increase to Sales,respectively?

Accepted Answer

A) $1,000 and $960 
B) $960 and $1,000 
C) $960 and $960 
D) $1,000 and $1,000 
A) $1,000 and $960 
B) $960 and $1,000 
C) $960 and $960 
D) $1,000 and $1,000

Question 4

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 5

The entry to record a purchase of $12,000 in merchandise assuming terms of 2/10,n/30 and a periodic inventory system would include a(n)

Accepted Answer

A) increase to Accounts Payable for $12,000. 
B) increase to Purchases Discounts for $240. 
C) decrease to Purchases for $12,000. 
D) decrease to Accounts Payable for $11,760. 
A) increase to Accounts Payable for $12,000. 
B) increase to Purchases Discounts for $240. 
C) decrease to Purchases for $12,000. 
D) decrease to Accounts Payable for $11,760.

Question 6

Brendan Company sold merchandise worth $1,600 on credit,terms n/15.The merchandise sold had cost $1,100.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 7

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

Accepted Answer

A) $75,750. 
B) $72,000. 
C) $67,000. 
D) $82,000. 
A) $75,750. 
B) $72,000. 
C) $67,000. 
D) $82,000.

Question 8

Using the following information,calculate for 20x5 (a)net sales, (b)cost of goods sold, (c)gross margin,and (d)net income.

Accepted Answer

The answer of Using the following information,calculate for 20x5 (a)net...

Question 9

Interest expense on a mortgage would be classified on a multistep income statement under the heading

Accepted Answer

A) general and administrative expenses. 
B) selling expenses. 
C) cost of goods sold. 
D) other revenue and expenses. 
A) general and administrative expenses. 
B) selling expenses. 
C) cost of goods sold. 
D) other revenue and expenses.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Using the following information,calculate for 20x5 (a)net sales, (b)cost of goods sold, (c)gross margin,and (d)net income.

Accepted Answer

a.$59,500

Question 12

A purchase on account with an invoice price of $1,500 has been made.The entry to record the payment after the 2 percent discount period would include a(n)

Accepted Answer

A) decrease to Accounts Payable for $1,500. 
B) decrease to Purchases Discounts for $30. 
C) increase to Accounts Payable for $1,470. 
D) decrease to Cash for $1,470. 
A) decrease to Accounts Payable for $1,500. 
B) decrease to Purchases Discounts for $30. 
C) increase to Accounts Payable for $1,470. 
D) decrease to Cash for $1,470.

Question 13

Delivery expense is a selling expense on the income statement.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Distinguish between the cost of goods available for sale and the cost of goods sold.

Accepted Answer

The cost of goods available for saleis t

Question 16

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

Accepted Answer

A) $124,000. 
B) $71,000. 
C) $131,000. 
D) $61,000. 
A) $124,000. 
B) $71,000. 
C) $131,000. 
D) $61,000.

Question 17

Under the perpetual inventory system,the return of goods to the supplier is recorded with a credit to Merchandise Inventory.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The operating cycle for a merchandiser is

Accepted Answer

A) the period of time it takes to sell a unit of inventory. 
B) the same for all companies. 
C) most generally a year. 
D) the time to buy,hold,sell,and collect payment for a sale. 
A) the period of time it takes to sell a unit of inventory. 
B) the same for all companies. 
C) most generally a year. 
D) the time to buy,hold,sell,and collect payment for a sale.

Question 20

On the income statement,freight-out is included as part of cost of goods sold.

Accepted Answer

A) True 
 B)False

Exam 6: Accounting for Merchandising Operations

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

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

A retailer accepted Visa charge sales totaling $1,000 and deposited the charge slips in the bank.Assuming a credit card discount expense of 4 percent,what would be the increase to Cash and the increase to Sales,respectively?

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?

The entry to record a purchase of $12,000 in merchandise assuming terms of 2/10,n/30 and a periodic inventory system would include a(n)

Brendan Company sold merchandise worth $1,600 on credit,terms n/15.The merchandise sold had cost $1,100.What is the required journal entry to record the transaction under the perpetual inventory system?

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

Using the following information,calculate for 20x5 (a)net sales, (b)cost of goods sold, (c)gross margin,and (d)net income.

Interest expense on a mortgage would be classified on a multistep income statement under the heading

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

Using the following information,calculate for 20x5 (a)net sales, (b)cost of goods sold, (c)gross margin,and (d)net income.

A purchase on account with an invoice price of $1,500 has been made.The entry to record the payment after the 2 percent discount period would include a(n)

Delivery expense is a selling expense on the income statement.

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

Distinguish between the cost of goods available for sale and the 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 return of goods to the supplier is recorded with a credit to Merchandise Inventory.

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

The operating cycle for a merchandiser is

On the income statement,freight-out is included as part of cost of goods sold.

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

Filters