Exam 5: Accounting for Merchandising Businesses

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

Journalize the entries to record the following selected transactions:

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

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

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

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?

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?

The term "inventory" can indicate

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

The accounts Purchases,Purchases Returns and Allowances,Purchases Discounts,and Freight In are found on the balance sheet.

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.

Under the periodic inventory system,the cost of merchandise sold is recorded when sales are made.

Sampson Co.sold merchandise to Batson Co.on account,$46,000,terms 2/15,net 45.The cost of the merchandise sold is $38,500.Sampson Co.issued a credit memo for $1,500 for merchandise returned that originally cost $950.The Batson Co.paid the invoice within the discount period.Prepare the entries that both Sampson and Batson Companies would record for the above.Assume both Sampson and Batson use a perpetual inventory system.

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

Maxi Company's perpetual inventory records indicate that $820,300 of merchandise should be on hand on October 31,2014.The physical inventory indicates that $781,900 is actually on hand.Journalize the adjusting entry for the inventory shrinkage for Maxi Company for the year ended October 31,2014.

Which of the following items should not be included in the cost of ending merchandise inventory?

In the merchandising income statement,sales will be reduced by sales discounts and sales returns and allowances to arrive at net sales.

Discuss the following statement: "Operating cycles for all merchandising businesses are the same,with similar profit margins." Include an example(s)to illustrate your explanation.

If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment,the terms are stated as FOB destination.