Question 1

In a multiple-step income statement the dollar amount for income from operations is always the same as net income.

Accepted Answer

A) True 
 B)False

Question 2

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

Accepted Answer

A)  debit to Bank Credit Card Sales, debit to Credit Card Expense, and a credit to Sales 
B)  debit to Cash and a credit to Sales 
C)  debit to Cash, credit to Credit Card Expense, and a credit to Sales 
D)  debit to Sales, debit to Credit Card Expense, and a credit to Cash 
A)  debit to Bank Credit Card Sales, debit to Credit Card Expense, and a credit to Sales 
B)  debit to Cash and a credit to Sales 
C)  debit to Cash, credit to Credit Card Expense, and a credit to Sales 
D)  debit to Sales, debit to Credit Card Expense, and a credit to Cash

Question 3

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 4

Prepare a multiple-step income statement for Armour Co. from the following data for the year ended December 31, 2014.
Sales, $790,000; cost of merchandise sold, $330,000; administrative expenses, $35,000; interest expense, $20,000; rent revenue, $25,000; sales returns and allowances, $35,000; selling expenses, $50,000.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 5

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  sales on account 
B)  sales returns 
C)  cash sales 
D)  sales when the credit card company remits the cash 
A)  sales on account 
B)  sales returns 
C)  cash sales 
D)  sales when the credit card company remits the cash

Question 8

Which of the following accounts usually has a debit balance?

Accepted Answer

A)  Purchase Discounts 
B)  Sales Tax Payable 
C)  Allowance for Doubtful Accounts 
D)  Freight-In 
A)  Purchase Discounts 
B)  Sales Tax Payable 
C)  Allowance for Doubtful Accounts 
D)  Freight-In

Question 9

Sales to customers who use nonbank credit cards, such as American Express, are generally treated as credit sales.

Accepted Answer

A) True 
 B)False

Question 10

What is the normal balance of the following accounts?
a. Sales Tax Payable
b. Merchandise Inventory
c. Delivery Expense
d. Cost of Merchandise Sold
e. Sales Returns and Allowance
f. Sales Discounts
g. Sales

Accepted Answer

a. credit
b. debit
c

Question 11

If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a

Accepted Answer

A)  sales invoice 
B)  purchase invoice 
C)  credit memo 
D)  debit memo 
A)  sales invoice 
B)  purchase invoice 
C)  credit memo 
D)  debit memo

Question 12

The statement of owner's equity shows

Accepted Answer

A)  only net income, beginning and ending capital 
B)  only total assets, beginning and ending capital 
C)  only net income, beginning capital, and withdrawals 
D)  all the changes in the owner's capital as a result of net income, net loss, additional investments, and withdrawals 
A)  only net income, beginning and ending capital 
B)  only total assets, beginning and ending capital 
C)  only net income, beginning capital, and withdrawals 
D)  all the changes in the owner's capital as a result of net income, net loss, additional investments, and withdrawals

Question 13

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 14

Retailers record all credit card sales as credit sales.

Accepted Answer

A) True 
 B)False

Question 15

The records of Nevada Co. indicated that $420,000 of merchandise should be on hand on December 31, 2010. The physical inventory indicates that $370,000 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for the year ended December 31, 2010.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 16

The seller may prepay the freight costs even though the terms are FOB shipping point.

Accepted Answer

A) True 
 B)False

Question 17

Title to merchandise shipped FOB shipping point passes to the buyer upon delivery of the merchandise to the buyer's place of business.

Accepted Answer

A) True 
 B)False

Question 18

A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

Accepted Answer

A)  $970 
B)  $650 
C)  $300 
D)  $620 
A)  $970 
B)  $650 
C)  $300 
D)  $620

Question 19

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

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 20

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

In a multiple-step income statement the dollar amount for income from operations is always the same as net income.

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

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

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.

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

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

Which of the following accounts usually has a debit balance?

Sales to customers who use nonbank credit cards, such as American Express, are generally treated as credit sales.

What is the normal balance of the following accounts? a. Sales Tax Payable b. Merchandise Inventory c. Delivery Expense d. Cost of Merchandise Sold e. Sales Returns and Allowance f. Sales Discounts g. Sales

If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a

The statement of owner's equity shows

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

Retailers record all credit card sales as credit sales.

The records of Nevada Co. indicated that $420,000 of merchandise should be on hand on December 31, 2010. The physical inventory indicates that $370,000 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for the year ended December 31, 2010.

The seller may prepay the freight costs even though the terms are FOB shipping point.

Title to merchandise shipped FOB shipping point passes to the buyer upon delivery of the merchandise to the buyer's place of business.

A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

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

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

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

In a multiple-step income statement the dollar amount for income from operations is always the same as net income.

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

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

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.

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

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

Which of the following accounts usually has a debit balance?

Sales to customers who use nonbank credit cards, such as American Express, are generally treated as credit sales.

What is the normal balance of the following accounts? a. Sales Tax Payable b. Merchandise Inventory c. Delivery Expense d. Cost of Merchandise Sold e. Sales Returns and Allowance f. Sales Discounts g. Sales

If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a

The statement of owner's equity shows

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

Retailers record all credit card sales as credit sales.

The records of Nevada Co. indicated that $420,000 of merchandise should be on hand on December 31, 2010. The physical inventory indicates that $370,000 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for the year ended December 31, 2010.

The seller may prepay the freight costs even though the terms are FOB shipping point.

Title to merchandise shipped FOB shipping point passes to the buyer upon delivery of the merchandise to the buyer's place of business.

A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

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

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

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