Question 1

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 2

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 3

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 4

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 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:
       Computation of payment:

Accepted Answer

@#IMG-DLM&_TB2013_00 While inventory is

Question 6

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

Accepted Answer

A)  multiple-step statement 
B)  revenue statement 
C)  report-form statement 
D)  single-step statement 
A)  multiple-step statement 
B)  revenue statement 
C)  report-form statement 
D)  single-step statement

Question 7

When a merchandising business is compared to a service business, the financial statement that is affected by that change is the Statement of Owner's Equity.

Accepted Answer

A) True 
 B)False

Question 8

Other income and expenses are items that are related to the primary operating activity.

Accepted Answer

A) True 
 B)False

Question 9

Which account is not classified as a selling expense?

Accepted Answer

A)  Sales Salaries 
B)  Freight-Out 
C)  Freight-In 
D)  Advertising Expense 
A)  Sales Salaries 
B)  Freight-Out 
C)  Freight-In 
D)  Advertising Expense

Question 10

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.

Question 11

Match each of the following terms with the correct definition below.

Accepted Answer

The answer of Match each of the following terms with...

Question 12

Dorman Co. sold merchandise to Smith Co. on account, $23,500, terms 2/15, net 45. The cost of the merchandise sold is $16,000. Dorman Co. issued a credit memo for $1,750 for merchandise returned that originally cost $1,400. The Smith Co. paid the invoice within the discount period. What is amount of net sales from the above transactions?

Accepted Answer

A)  $23,030 
B)  $21,750 
C)  $21,315 
D)  $13,808 
A)  $23,030 
B)  $21,750 
C)  $21,315 
D)  $13,808

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Journalize the entries to record the following selected transactions:

Accepted Answer

The answer of Journalize the entries to record the following...

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Gross profit minus selling expenses equals net income.

Accepted Answer

A) True 
 B)False

Question 17

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a

Accepted Answer

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

Question 18

A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $3,600; Freight-In, $650; Purchases, $10,700; Purchases Returns and Allowances, $1,950; Purchases Discounts, $330. The cost of merchandise purchased is equal to

Accepted Answer

A)  $12,670 
B)  $9,070 
C)  $8,420 
D)  $17,230 
A)  $12,670 
B)  $9,070 
C)  $8,420 
D)  $17,230

Question 19

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

Accepted Answer

The answer of Journalize the following transactions for the Evans...

Question 20

The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include

Accepted Answer

A)  only the list price 
B)  only the sales tax 
C)  the list price plus the sales tax 
D)  the list price less the sales tax 
A)  only the list price 
B)  only the sales tax 
C)  the list price plus the sales tax 
D)  the list price less the sales tax

Exam 6: Accounting for Merchandising Businesses

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

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

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

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

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: Computation of payment:

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

When a merchandising business is compared to a service business, the financial statement that is affected by that change is the Statement of Owner's Equity.

Other income and expenses are items that are related to the primary operating activity.

Which account is not classified as a selling expense?

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?

Match each of the following terms with the correct definition below.

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

Journalize the entries to record the following selected transactions:

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

Gross profit minus selling expenses equals net income.

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a

A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $3,600; Freight-In, $650; Purchases, $10,700; Purchases Returns and Allowances, $1,950; Purchases Discounts, $330. The cost of merchandise purchased is equal to

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

The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include

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

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Filters