Question 1

Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as credit sales.

Accepted Answer

A) True 
 B)False  False

Question 2

Because many companies use computerized accounting systems, periodic inventory is widely used.

Accepted Answer

A) True 
 B)False  False

Question 3

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. B

Question 4

The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and income from operations are readily available.

Accepted Answer

A) True 
 B)False

Question 5

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

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Question 6

Travis Company purchased merchandise on account from a supplier for $5,700, terms 2/10, net 30. Travis returned $1,100 of the merchandise and received full credit. Travis Company paid for the merchandise within the discount period.
Under a perpetual inventory system, record all of the journal entries required for the above transactions.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 7

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are

Accepted Answer

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

Question 8

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 9

Under the periodic inventory system, the journal entry to record the purchase of merchandise inventory will include a debit to

Accepted Answer

A)  Merchandise Inventory 
B)  Purchases 
C)  Accounts Payable 
D)  Cost of Merchandise Purchased 
A)  Merchandise Inventory 
B)  Purchases 
C)  Accounts Payable 
D)  Cost of Merchandise Purchased

Question 10

Journalize the following transactions assuming the perpetual inventory system:
  Journal

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 11

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

Question 12

A retailer purchases merchandise with a catalog list price of $25,000. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to the Merchandise Inventory account?

Accepted Answer

A)  $7,500 
B)  $17,500 
C)  $25,000 
D)  $17,250 
A)  $7,500 
B)  $17,500 
C)  $25,000 
D)  $17,250

Question 13

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

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB20

Question 14

Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of the merchandise sold is $24,500. Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?

Accepted Answer

A)  10,500 
B)  30,772 
C)  7,972 
D)  31,400 
A)  10,500 
B)  30,772 
C)  7,972 
D)  31,400

Question 15

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Accepted Answer

A)  credit to Sales Returns and Allowances 
B)  debit to Merchandise Inventory 
C)  credit to Merchandise Inventory 
D)  debit to Cost of Merchandise Sold 
A)  credit to Sales Returns and Allowances 
B)  debit to Merchandise Inventory 
C)  credit to Merchandise Inventory 
D)  debit to Cost of Merchandise Sold

Question 16

Complete the following data taken from the condensed income statements for merchandising Companies A, B, & C.

Accepted Answer

@#IMG-DLM&_TB2085_00_TB2085_00

Question 17

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

Accepted Answer

A) True 
 B)False

Question 18

Discounts taken by the buyer for early payment of an invoice are credited to Sales Discounts by the buyer.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

When the three sections of a balance sheet are presented on a page in a downward sequence, it is called the

Accepted Answer

A)  account form 
B)  comparative form 
C)  horizontal form 
D)  report form 
A)  account form 
B)  comparative form 
C)  horizontal form 
D)  report form

Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as credit sales.

Because many companies use computerized accounting systems, periodic inventory is widely used.

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?

The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and income from operations are readily available.

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.

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are

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

Under the periodic inventory system, the journal entry to record the purchase of merchandise inventory will include a debit to

Journalize the following transactions assuming the perpetual inventory system: Journal

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.

A retailer purchases merchandise with a catalog list price of $25,000. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to the Merchandise Inventory account?

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

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Complete the following data taken from the condensed income statements for merchandising Companies A, B, & C.

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

Discounts taken by the buyer for early payment of an invoice are credited to Sales Discounts by the buyer.

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

When the three sections of a balance sheet are presented on a page in a downward sequence, it is called the

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 6: Accounting for Merchandising Businesses

Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as credit sales.

Because many companies use computerized accounting systems, periodic inventory is widely used.

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?

The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and income from operations are readily available.

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.

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are

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

Under the periodic inventory system, the journal entry to record the purchase of merchandise inventory will include a debit to

Journalize the following transactions assuming the perpetual inventory system: Journal

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.

A retailer purchases merchandise with a catalog list price of $25,000. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to the Merchandise Inventory account?

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

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a

Complete the following data taken from the condensed income statements for merchandising Companies A, B, & C.

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

Discounts taken by the buyer for early payment of an invoice are credited to Sales Discounts by the buyer.

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

When the three sections of a balance sheet are presented on a page in a downward sequence, it is called the

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters