Question 1

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

Accepted Answer

a.$88,800

Question 2

Which of the following is not considered an operating expense?

Accepted Answer

A) General office expenses. 
B) Cost of goods sold. 
C) Freight-out expense. 
D) Advertising expense. 
A) General office expenses. 
B) Cost of goods sold. 
C) Freight-out expense. 
D) Advertising expense.

Question 3

Goods totaling $14,000 purchased February 2 on terms of 2/10,n/30 and on which returns of $2,000 were made on February 10 would be subject to which of the following discounts if paid for on February 12?

Accepted Answer

A) $240 
B) $280 
C) $320 
D) $40 
A) $240 
B) $280 
C) $320 
D) $40

Question 4

The net cost of purchases is found by adding freight-in to net purchases.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) $37,000. 
B) $21,000. 
C) $27,000. 
D) $33,000. 
A) $37,000. 
B) $21,000. 
C) $27,000. 
D) $33,000.

Question 6

Wolf Equipment uses a perpetual inventory method.Discuss how Wolf Equipment accounts for purchase returns and allowances.

Accepted Answer

Under the perpetual inventory system,whe

Question 7

Which of the following is an actual account on the books?

Accepted Answer

A) Cost of goods sold. 
B) Gross margin. 
C) Net income. 
D) Income from operations. 
A) Cost of goods sold. 
B) Gross margin. 
C) Net income. 
D) Income from operations.

Question 8

The entry to record a $1,500 sale with terms of 2/10,n/30 would include a(n)

Accepted Answer

A) decrease to Accounts Receivable for $1,500. 
B) increase to Sales for $1,500. 
C) increase to Sales Discounts for $30. 
D) decrease to Sales for $1,470. 
A) decrease to Accounts Receivable for $1,500. 
B) increase to Sales for $1,500. 
C) increase to Sales Discounts for $30. 
D) decrease to Sales for $1,470.

Question 9

Assume a company uses the periodic inventory system and has a beginning merchandise inventory balance of $10,000,purchases of $150,000,and sales of $250,000.The company closes its records once a year on December 31.In the accounting records,the merchandise inventory account would be expected to have a balance on December 31 prior to adjusting and closing entries that was

Accepted Answer

A) indeterminate. 
B) less than $5,000. 
C) more than $5,000. 
D) equal to $5,000. 
A) indeterminate. 
B) less than $5,000. 
C) more than $5,000. 
D) equal to $5,000.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A merchandiser will earn an operating income of exactly $0 when

Accepted Answer

A) gross margin equals operating expenses. 
B) net sales equals cost of goods sold. 
C) cost of goods sold equals gross margin. 
D) operating expenses equal net sales 
A) gross margin equals operating expenses. 
B) net sales equals cost of goods sold. 
C) cost of goods sold equals gross margin. 
D) operating expenses equal net sales

Question 12

Under the perpetual inventory system

Accepted Answer

A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transaferred to the Cost of Goods Sold account. 
C) the balance of the Merchandise Inventory account equals the cost of goods on hand. 
D) All of these choices. 
A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transaferred to the Cost of Goods Sold account. 
C) the balance of the Merchandise Inventory account equals the cost of goods on hand. 
D) All of these choices.

Question 13

Which of the following activities is not a component of the operating cycle?

Accepted Answer

A) Payment of employees' wages 
B) Sale of merchandise 
C) Purchase of merchandise 
D) Collection of cash from merchandise sales 
A) Payment of employees' wages 
B) Sale of merchandise 
C) Purchase of merchandise 
D) Collection of cash from merchandise sales

Question 14

Compute the dollar amount of the items indicated by letters a through f in the table below.

Accepted Answer

a.$150
b.$

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Interest paid on debt would be entered on the multistep income statement in the category called

Accepted Answer

A) selling expenses. 
B) other revenues and expenses. 
C) general and administrative expenses. 
D) operating expenses. 
A) selling expenses. 
B) other revenues and expenses. 
C) general and administrative expenses. 
D) operating expenses.

Question 17

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

Accepted Answer

A) $173,000. 
B) $93,000. 
C) $63,000. 
D) $203,000. 
A) $173,000. 
B) $93,000. 
C) $63,000. 
D) $203,000.

Question 18

The collection of a $2,000 account beyond the 2 percent discount period would result in a(n)

Accepted Answer

A) increase to Cash for $1,960. 
B) decrease to Accounts Receivable for $2,000. 
C) decrease to Cash for $2,000. 
D) increase to Sales Discounts for $40. 
A) increase to Cash for $1,960. 
B) decrease to Accounts Receivable for $2,000. 
C) decrease to Cash for $2,000. 
D) increase to Sales Discounts for $40.

Question 19

When the terms are FOB destination,the title passes at the point of origin and the buyer pays the transportation costs.

Accepted Answer

A) True 
 B)False

Question 20

Upon making a credit card sale,a business should record the sale as an accounts receivable until the customer pays his or her credit card bill.

Accepted Answer

A) True 
 B)False

Exam 6: Accounting for Merchandising Operations

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

Which of the following is not considered an operating expense?

Goods totaling $14,000 purchased February 2 on terms of 2/10,n/30 and on which returns of $2,000 were made on February 10 would be subject to which of the following discounts if paid for on February 12?

The net cost of purchases is found by adding freight-in to net purchases.

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

Wolf Equipment uses a perpetual inventory method.Discuss how Wolf Equipment accounts for purchase returns and allowances.

Which of the following is an actual account on the books?

The entry to record a $1,500 sale with terms of 2/10,n/30 would include a(n)

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

A merchandiser will earn an operating income of exactly $0 when

Under the perpetual inventory system

Which of the following activities is not a component of the operating cycle?

Compute the dollar amount of the items indicated by letters a through f in the table below.

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

Interest paid on debt would be entered on the multistep income statement in the category called

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

The collection of a $2,000 account beyond the 2 percent discount period would result in a(n)

When the terms are FOB destination,the title passes at the point of origin and the buyer pays the transportation costs.

Upon making a credit card sale,a business should record the sale as an accounts receivable until the customer pays his or her credit card bill.

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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