Question 1

Under the periodic inventory system, the journal entry to record the cost of merchandise sold at the point of sale will include the following account

Accepted Answer

A)  No entry is made. 
B)  Cost of merchandise sold 
C)  Inventory 
D)  Purchases 
A)  No entry is made. 
B)  Cost of merchandise sold 
C)  Inventory 
D)  Purchases

Question 2

As we compare a merchandise business to a service business, the financial statement that changes the most is the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 3

Calculate the gross profit for Jonas Company based on the data given below:

Accepted Answer

Sales $764,000 - Sales Discoun

Question 4

Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?

Accepted Answer

A)  Cash $2,000 Dr, Merchandise Inventory $1,250 Cr 
B)  Cash $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr. 
C)  Cash $1,250 Dr, Sales $1,250 Cr 
D)  Accounts Receivable $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr. 
A)  Cash $2,000 Dr, Merchandise Inventory $1,250 Cr 
B)  Cash $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr. 
C)  Cash $1,250 Dr, Sales $1,250 Cr 
D)  Accounts Receivable $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr.

Question 5

On March 4th, Micro Sales makes $4,850.00 in sales on bank credit cards which charge a 2.5% service charge and deposit the funds into Micro Sales bank accounts at the end of the business day. Journalize the sales and recognition of expense.

Accepted Answer

@#IMG-DLM& The sales can be debited to cash since

Question 6

If the buyer bears the freight costs related to a purchase, the terms are said to be FOB destination.

Accepted Answer

A) True 
 B)False

Question 7

One of the most important differences between a service business and a retail business is in what is sold.

Accepted Answer

A) True 
 B)False

Question 8

In the periodic inventory system, purchases of merchandise for resale are debited to the Purchases account.

Accepted Answer

A) True 
 B)False

Question 9

On March 29th, customers who owe $10,500.00 for purchases made on Sonic Sales Company submit payments of $4,250.00. Journalize this event.

Accepted Answer

The answer of On March 29th, customers who owe $10,500.00...

Question 10

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses perpetual inventory. Use a General Journal to journalize the following three transactions during the month of May:

Accepted Answer

@#IMG-DLM& Computati

Question 11

Under the perpetual inventory system, a company purchases merchandise on terms 2/10, n/30. If payment is made within 10 days of the purchase, the entry to record the payment will include a credit to Cash and a credit to Purchase Discounts.

Accepted Answer

A) True 
 B)False

Question 12

Using the following information, what is the amount of merchandise available for sale?

Accepted Answer

A)  $35,540 
B)  $36,580 
C)  $37,700 
D)  $34,500 
A)  $35,540 
B)  $36,580 
C)  $37,700 
D)  $34,500

Question 13

If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as

Accepted Answer

A)  FOB shipping point 
B)  FOB destination 
C)  FOB n/30 
D)  FOB buyer 
A)  FOB shipping point 
B)  FOB destination 
C)  FOB n/30 
D)  FOB buyer

Question 14

Selected accounts and amounts appear below. Journalize the closing entry, assuming a perpetual inventory system.

Accepted Answer

The answer of Selected accounts and amounts appear below. Journalize...

Question 15

Isaac Co. sells merchandise on credit to Sonar Co in the amount of $5,700. The invoice is dated on April 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Accepted Answer

A)  $114, April 15 
B)  $114, April 16 
C)  $57, April 15 
D)  $57, April 16 
A)  $114, April 15 
B)  $114, April 16 
C)  $57, April 15 
D)  $57, April 16

Question 16

The adjusting entry to record inventory shrinkage would generally include a debit to Cost of Merchandise Sold.

Accepted Answer

A) True 
 B)False

Question 17

Calculate the gross profit for Jonas Company based on the data given below:

Accepted Answer

A)  $753,250 
B)  $700,750 
C)  $162,750 
D)  $215,250 
A)  $753,250 
B)  $700,750 
C)  $162,750 
D)  $215,250

Question 18

What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?

Accepted Answer

A)  gross profit 
B)  income from operations 
C)  net income 
D)  gross sales 
A)  gross profit 
B)  income from operations 
C)  net income 
D)  gross sales

Question 19

If the merchandise costs $3,500, insurance in transit costs $250, tariff costs $75, processing the purchase order by the purchasing department costs $50, and the company receiving dock personnel cost $25, what is the total cost charged to the merchandise?

Accepted Answer

A)  $3,825 
B)  $3,850 
C)  $3,875 
D)  $3,500 
A)  $3,825 
B)  $3,850 
C)  $3,875 
D)  $3,500

Question 20

Dorman Co. sold merchandise to Smith Co. on account, $23,500, terms 2/15, net 45. The cost of the merchandise sold is $16,000. Dorman Co. issued a credit memo for $1,750 for merchandise returned that originally cost $1,400. The Smith Co. paid the invoice within the discount period. What is amount of net sales from the above transactions?

Accepted Answer

A)  $23,030 
B)  $21,750 
C)  $21,315 
D)  $13,808 
A)  $23,030 
B)  $21,750 
C)  $21,315 
D)  $13,808

Exam 5: Accounting for Merchandising Businesses

Under the periodic inventory system, the journal entry to record the cost of merchandise sold at the point of sale will include the following account

As we compare a merchandise business to a service business, the financial statement that changes the most is the Balance Sheet.

Calculate the gross profit for Jonas Company based on the data given below:

Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?

On March 4th, Micro Sales makes $4,850.00 in sales on bank credit cards which charge a 2.5% service charge and deposit the funds into Micro Sales bank accounts at the end of the business day. Journalize the sales and recognition of expense.

If the buyer bears the freight costs related to a purchase, the terms are said to be FOB destination.

One of the most important differences between a service business and a retail business is in what is sold.

In the periodic inventory system, purchases of merchandise for resale are debited to the Purchases account.

On March 29th, customers who owe $10,500.00 for purchases made on Sonic Sales Company submit payments of $4,250.00. Journalize this event.

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses perpetual inventory. Use a General Journal to journalize the following three transactions during the month of May:

Under the perpetual inventory system, a company purchases merchandise on terms 2/10, n/30. If payment is made within 10 days of the purchase, the entry to record the payment will include a credit to Cash and a credit to Purchase Discounts.

Using the following information, what is the amount of merchandise available for sale?

If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as

Selected accounts and amounts appear below. Journalize the closing entry, assuming a perpetual inventory system.

Isaac Co. sells merchandise on credit to Sonar Co in the amount of $5,700. The invoice is dated on April 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

The adjusting entry to record inventory shrinkage would generally include a debit to Cost of Merchandise Sold.

Calculate the gross profit for Jonas Company based on the data given below:

What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?

If the merchandise costs $3,500, insurance in transit costs $250, tariff costs $75, processing the purchase order by the purchasing department costs $50, and the company receiving dock personnel cost $25, what is the total cost charged to the merchandise?

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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