Question 1

When the perpetual inventory system is used, the inventory sold is debited to

Accepted Answer

A)  supplies expense 
B)  cost of merchandise sold 
C)  merchandise inventory 
D)  sales 
A)  supplies expense 
B)  cost of merchandise sold 
C)  merchandise inventory 
D)  sales B

Question 2

Merchandise is sold for $3,600, terms FOB destination, 2/10, n/30, with prepaid freight costs of $150. If $500 of the merchandise is returned prior to payment and the invoice is paid within the discount period, the amount of the sales discount is $65.

Accepted Answer

A) True 
 B)False  False

Question 3

Freight in is the amount paid by the company to deliver merchandise sold to a customer.

Accepted Answer

A) True 
 B)False  False

Question 4

In a perpetual inventory system, the Merchandise Inventory account is only used to reflect the beginning inventory.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following accounts has a normal debit balance?

Accepted Answer

A)  Accounts Payable 
B)  Sales Returns and Allowances 
C)  Sales 
D)  Interest Revenue 
A)  Accounts Payable 
B)  Sales Returns and Allowances 
C)  Sales 
D)  Interest Revenue

Question 6

Based on the information below, journalize the entries for the Seller and the Buyer. Both use a perpetual inventory system.

Accepted Answer

The answer of Based on the information below, journalize the...

Question 7

Which one of the following is not a difference between a retail business and a service business?

Accepted Answer

A)  in what is sold 
B)  the inclusion of gross profit in the income statement 
C)  accounting equation 
D)  merchandise inventory included in the balance sheet 
A)  in what is sold 
B)  the inclusion of gross profit in the income statement 
C)  accounting equation 
D)  merchandise inventory included in the balance sheet

Question 8

On March 25, 2014, Patton Company sold merchandise on account,$10,000. The applicable sales tax percentage is 8.5%. Record the transaction.

Accepted Answer

The answer of On March 25, 2014, Patton Company sold...

Question 9

When merchandise that was sold is returned, a credit to sales returns and allowances is made.

Accepted Answer

A) True 
 B)False

Question 10

When comparing a retail business to a service business, the financial statement that changes the most is the

Accepted Answer

A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Owner's Equity 
D)  Statement of Cash Flow 
A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Owner's Equity 
D)  Statement of Cash Flow

Question 11

Cost of Merchandise Sold is often the largest expense on a merchandising company income statement.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

Accepted Answer

A)  Merchandise Inventory 
B)  Accumulated Depreciation 
C)  Drawing 
D)  Cost of Merchandise Sold 
A)  Merchandise Inventory 
B)  Accumulated Depreciation 
C)  Drawing 
D)  Cost of Merchandise Sold

Question 13

The form of the balance sheet in which assets, liabilities, and owner's equity are presented in a downward sequence is called the report form.

Accepted Answer

A) True 
 B)False

Question 14

When a buyer returns merchandise purchased for cash, the buyer may record the transaction using the following entry

Accepted Answer

A)  debit Merchandise Inventory; credit Cash 
B)  debit Cash; credit Merchandise Inventory 
C)  debit Cash; credit Sales Returns and Allowances 
D)  debit Sales Returns and Allowances; credit Cash 
A)  debit Merchandise Inventory; credit Cash 
B)  debit Cash; credit Merchandise Inventory 
C)  debit Cash; credit Sales Returns and Allowances 
D)  debit Sales Returns and Allowances; credit Cash

Question 15

The service fee that credit card companies charge retailers varies and is the primary reason why some businesses do not accept all credit cards.

Accepted Answer

A) True 
 B)False

Question 16

Using the following information, what is the amount of cost of merchandise sold?

Accepted Answer

A)  $26,900 
B)  $20,530 
C)  $30,210 
D)  $28,130 
A)  $26,900 
B)  $20,530 
C)  $30,210 
D)  $28,130

Question 17

Prepare (a) a single-step income statement, (b) a statement of owner's equity, and (c) a balance sheet in report form from the following data for Kooper Co., taken from the ledger after adjustment on December 31, 2010 the end of the fiscal year.

Accepted Answer

The answer of Prepare (a) a single-step income statement, (b)...

Question 18

Net income plus operating expenses is equal to

Accepted Answer

A)  cost of merchandise sold 
B)  cost of merchandise available for sale 
C)  net sales 
D)  gross profit 
A)  cost of merchandise sold 
B)  cost of merchandise available for sale 
C)  net sales 
D)  gross profit

Question 19

Gross profit is equal to:

Accepted Answer

A)  sales plus (sales discounts and sales returns and allowances) plus cost of merchandise sold 
B)  sales plus sales returns and allowances less sales discounts less cost of merchandise sold 
C)  sales plus sales discounts less sales returns and allowances less cost of merchandise sold 
D)  sales less (sales discounts and sales returns and allowances) less cost of merchandise sold 
A)  sales plus (sales discounts and sales returns and allowances) plus cost of merchandise sold 
B)  sales plus sales returns and allowances less sales discounts less cost of merchandise sold 
C)  sales plus sales discounts less sales returns and allowances less cost of merchandise sold 
D)  sales less (sales discounts and sales returns and allowances) less cost of merchandise sold

Question 20

Marshall Supplies is a janitorial supply store. Marshall Supplies uses perpetual inventory. Use a General Journal to journalize the following four transactions during the month of July:

Accepted Answer

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Exam 5: Accounting for Merchandising Businesses

When the perpetual inventory system is used, the inventory sold is debited to

Merchandise is sold for $3,600, terms FOB destination, 2/10, n/30, with prepaid freight costs of $150. If $500 of the merchandise is returned prior to payment and the invoice is paid within the discount period, the amount of the sales discount is $65.

Freight in is the amount paid by the company to deliver merchandise sold to a customer.

In a perpetual inventory system, the Merchandise Inventory account is only used to reflect the beginning inventory.

Which of the following accounts has a normal debit balance?

Based on the information below, journalize the entries for the Seller and the Buyer. Both use a perpetual inventory system.

Which one of the following is not a difference between a retail business and a service business?

On March 25, 2014, Patton Company sold merchandise on account,$10,000. The applicable sales tax percentage is 8.5%. Record the transaction.

When merchandise that was sold is returned, a credit to sales returns and allowances is made.

When comparing a retail business to a service business, the financial statement that changes the most is the

Cost of Merchandise Sold is often the largest expense on a merchandising company income statement.

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

The form of the balance sheet in which assets, liabilities, and owner's equity are presented in a downward sequence is called the report form.

When a buyer returns merchandise purchased for cash, the buyer may record the transaction using the following entry

The service fee that credit card companies charge retailers varies and is the primary reason why some businesses do not accept all credit cards.

Using the following information, what is the amount of cost of merchandise sold?

Prepare (a) a single-step income statement, (b) a statement of owner's equity, and (c) a balance sheet in report form from the following data for Kooper Co., taken from the ledger after adjustment on December 31, 2010 the end of the fiscal year.

Net income plus operating expenses is equal to

Gross profit is equal to:

Marshall Supplies is a janitorial supply store. Marshall Supplies uses perpetual inventory. Use a General Journal to journalize the following four transactions during the month of July:

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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