Question 1

The chart of accounts for a merchandise business would include an account called Delivery Expense.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

There is no difference between the recording of cash sales and the recording of MasterCard or VISA sales.

Accepted Answer

A) True 
 B)False

Question 4

Discounts taken by a buyer because of early payment are recorded on the seller's accounting records as

Accepted Answer

A) Purchases discount 
B) Sales discount 
C) Trade discount 
D) Early payment discount 
A) Purchases discount 
B) Sales discount 
C) Trade discount 
D) Early payment discount

Question 5

Gadget Palace is a retailer selling unique hardware.Gadget Palace uses perpetual inventory.Use a General Journal to journalize the following four transactions during the month of August:

Accepted Answer

@#IMG-DLM& Computation of payment:
 @#IMG-DLM& Whi

Question 6

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 7

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 for...

Question 8

The proper journal entry to record the receipt of inventory purchased on account in a perpetual inventory system would be:

Accepted Answer

A) Jan 1 Merchandise Inventory 1,500 Accounts Payable 1,500 
B) Jan 1 Office Supplies 1,500 Accounts Payable 1,500 
C) Jan 1 Purchases 1,500 Accounts Payable 1,500 
D) Jan 1 Purchases 1,500 Accounts Receivable 1,500 
A) Jan 1 Merchandise Inventory 1,500 Accounts Payable 1,500 
B) Jan 1 Office Supplies 1,500 Accounts Payable 1,500 
C) Jan 1 Purchases 1,500 Accounts Payable 1,500 
D) Jan 1 Purchases 1,500 Accounts Receivable 1,500

Question 9

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

Accepted Answer

A) selling expenses 
B) general expenses 
C) other expenses 
D) administrative expenses 
A) selling expenses 
B) general expenses 
C) other expenses 
D) administrative expenses

Question 10

What type of company would normally offer trade discounts to its customers?

Accepted Answer

A) Service companies 
B) Retailers 
C) Wholesalers 
D) On-line retailers 
A) Service companies 
B) Retailers 
C) Wholesalers 
D) On-line retailers

Question 11

If merchandise costing $3,500,terms FOB destination,2/10,n/30,with prepaid freight costs of $125,is paid within 10 days,the amount of the purchases discount is $70.

Accepted Answer

A) True 
 B)False

Question 12

Using a perpetual inventory system,the entry to record the sale of merchandise on account includes a

Accepted Answer

A) debit to Sales 
B) debit to Merchandise Inventory 
C) credit to Merchandise Inventory 
D) credit to Accounts Receivable 
A) debit to Sales 
B) debit to Merchandise Inventory 
C) credit to Merchandise Inventory 
D) credit to Accounts Receivable

Question 13

The seller records the sales tax as part of the sales amount.

Accepted Answer

A) True 
 B)False

Question 14

On March 15th Monroe Sales sells $9,525.00 on account to Garrison Brewer with terms of 2/10,n/30.The cost of merchandise sold was $6,905.00.
(a)Journalize the sale and the recognition of the cost of the sale.
(b)On March 20th a $125.00 credit memo is given to Garrison Brewer due to merchandise that was the wrong color.Journalize this event.The cost of the returned merchandise was $65.
(c)On March 25th Garrison Brewer submits payment in full.Journalize this event.

Accepted Answer

The answer of On March 15th Monroe Sales sells $9,525.00...

Question 15

The effect of a sales return and allowance is a reduction in sales revenue and a decrease in cash or accounts receivable.

Accepted Answer

A) True 
 B)False

Question 16

In a merchandise business,sales minus operating expenses equals net income.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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 19

The following data were extracted from the accounting records of Meridian Designs for the year ended March 31,2014.
   
Prepare the cost of merchandise sold section of the income statement for the year ended March 31,2014,using the periodic method.Also determine gross profit.

Accepted Answer

The answer of The following data were extracted from the...

Question 20

Service businesses provide services for income,while a merchandising business sells merchandise.

Accepted Answer

A) True 
 B)False

The chart of accounts for a merchandise business would include an account called Delivery Expense.

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

There is no difference between the recording of cash sales and the recording of MasterCard or VISA sales.

Discounts taken by a buyer because of early payment are recorded on the seller's accounting records as

Gadget Palace is a retailer selling unique hardware.Gadget Palace uses perpetual inventory.Use a General Journal to journalize the following four transactions during the month of August:

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

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.

The proper journal entry to record the receipt of inventory purchased on account in a perpetual inventory system would be:

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

What type of company would normally offer trade discounts to its customers?

If merchandise costing $3,500,terms FOB destination,2/10,n/30,with prepaid freight costs of $125,is paid within 10 days,the amount of the purchases discount is $70.

Using a perpetual inventory system,the entry to record the sale of merchandise on account includes a

The seller records the sales tax as part of the sales amount.

The effect of a sales return and allowance is a reduction in sales revenue and a decrease in cash or accounts receivable.

In a merchandise business,sales minus operating expenses equals net income.

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

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

The following data were extracted from the accounting records of Meridian Designs for the year ended March 31,2014. Prepare the cost of merchandise sold section of the income statement for the year ended March 31,2014,using the periodic method.Also determine gross profit.

Service businesses provide services for income,while a merchandising business sells 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

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Exam 5: Accounting for Merchandising Businesses

The chart of accounts for a merchandise business would include an account called Delivery Expense.

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

There is no difference between the recording of cash sales and the recording of MasterCard or VISA sales.

Discounts taken by a buyer because of early payment are recorded on the seller's accounting records as

Gadget Palace is a retailer selling unique hardware.Gadget Palace uses perpetual inventory.Use a General Journal to journalize the following four transactions during the month of August:

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

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.

The proper journal entry to record the receipt of inventory purchased on account in a perpetual inventory system would be:

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

What type of company would normally offer trade discounts to its customers?

If merchandise costing $3,500,terms FOB destination,2/10,n/30,with prepaid freight costs of $125,is paid within 10 days,the amount of the purchases discount is $70.

Using a perpetual inventory system,the entry to record the sale of merchandise on account includes a

The seller records the sales tax as part of the sales amount.

The effect of a sales return and allowance is a reduction in sales revenue and a decrease in cash or accounts receivable.

In a merchandise business,sales minus operating expenses equals net income.

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

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

The following data were extracted from the accounting records of Meridian Designs for the year ended March 31,2014. Prepare the cost of merchandise sold section of the income statement for the year ended March 31,2014,using the periodic method.Also determine gross profit.

Service businesses provide services for income,while a merchandising business sells 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

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