Exam 5: Accounting for Merchandising Businesses

Record the following transactions for Sparky's Pet Shop using the general journal form provided below.Assume Sparky's uses a perpetual inventory system.Omit transaction descriptions from entries:

In many retail businesses,inventory is the largest current asset.

Details of invoices for purchases of merchandise are as follows: Determine the amount to be paid in full settlement of each of the invoices,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

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.

Inventory shortage is recorded when

When a buyer returns merchandise purchased for cash,the buyer may record the transaction using the following entry

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

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

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?

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

A buyer who acquires merchandise under credit terms of 1/10,n/30 has 30days after the invoice date to take advantage of the cash discount.

Journalize the following transactions for the Evans Company.Assume the company uses a perpetual inventory system.

Under the perpetual inventory system,all purchases of merchandise are debited to the account entitled

Journalize the following merchandise transactions:

The cost of merchandise inventory is limited to the purchase price less any purchase discounts.

Which of the following costs would be included in merchandise inventory?

When merchandise is sold for $600 plus 6% sales tax,the Sales account should be credited for $636.

Using the perpetual inventory system,journalize the entries for the following selected transactions:

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

Using the letter preceding each account,arrange the following selected accounts in the order they would normally appear in a chart of accounts of a company that uses a multiple-step income statement.