Question 1

Cost of merchandise sold is the amount that the merchandising company pays for the merchandise it intends to sell.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Under the periodic inventory system, the cost of merchandise sold is equal to the beginning merchandise inventory plus the cost of merchandise purchased plus the ending merchandise inventory.

Accepted Answer

A) True 
 B)False

Question 4

The form of the balance sheet in which assets, liabilities, and owner's equity are presented in a downward sequence is called the report form.

Accepted Answer

A) True 
 B)False

Question 5

The ratio of net sales to assets measures how effectively a business is using its assets to generate sales.

Accepted Answer

A) True 
 B)False

Question 6

Marshall Supplies is a janitorial supply store. Marshall Supplies uses perpetual inventory. Use a General Journal to journalize the following four transactions during the month of July:

Accepted Answer

@#IMG-DLM&_TB2013_00 Computation of paym

Question 7

Discounts taken by the buyer for early payment of an invoice are credited to Sales Discounts by the buyer.

Accepted Answer

A) True 
 B)False

Question 8

A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called cash discounts.

Accepted Answer

A) True 
 B)False

Question 9

Complete the following data taken from the condensed income statements for merchandising Companies A, B, &
C.

Accepted Answer

@#IMG-DLM&_TB2013_00 OR Rearra

Question 10

The adjusting entry to record inventory shrinkage would generally include a debit to Cost of Merchandise Sold.

Accepted Answer

A) True 
 B)False

Question 11

Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?

Accepted Answer

A)  selling expense 
B)  miscellaneous expense 
C)  administrative expense 
D)  other expense 
A)  selling expense 
B)  miscellaneous expense 
C)  administrative expense 
D)  other expense

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

The abbreviation FOB stands for Free On Board.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Multiple-step income statements show

Accepted Answer

A)  gross profit but not income from operations 
B)  neither gross profit nor income from operations 
C)  both gross profit and income from operations 
D)  income from operations but not gross profit 
A)  gross profit but not income from operations 
B)  neither gross profit nor income from operations 
C)  both gross profit and income from operations 
D)  income from operations but not gross profit

Question 16

Using the following information, what is the amount of gross profit?

Accepted Answer

A)  $34,870 
B)  $31,880 
C)  $27,460 
D)  $62,090 
A)  $34,870 
B)  $31,880 
C)  $27,460 
D)  $62,090

Question 17

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 18

Inventory shortage is recorded when

Accepted Answer

A)  merchandise is returned by a buyer. 
B)  merchandise purchased from a seller is incomplete or short. 
C)  merchandise is returned to a seller. 
D)  there is a difference between a physical count of inventory and inventory records. 
A)  merchandise is returned by a buyer. 
B)  merchandise purchased from a seller is incomplete or short. 
C)  merchandise is returned to a seller. 
D)  there is a difference between a physical count of inventory and inventory records.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Accepted Answer

A)  retail 
B)  periodic 
C)  physical 
D)  perpetual 
A)  retail 
B)  periodic 
C)  physical 
D)  perpetual

Exam 6: Accounting for Merchandising Businesses

Cost of merchandise sold is the amount that the merchandising company pays for the merchandise it intends to sell.

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

Under the periodic inventory system, the cost of merchandise sold is equal to the beginning merchandise inventory plus the cost of merchandise purchased plus the ending merchandise inventory.

The form of the balance sheet in which assets, liabilities, and owner's equity are presented in a downward sequence is called the report form.

The ratio of net sales to assets measures how effectively a business is using its assets to generate sales.

Marshall Supplies is a janitorial supply store. Marshall Supplies uses perpetual inventory. Use a General Journal to journalize the following four transactions during the month of July:

Discounts taken by the buyer for early payment of an invoice are credited to Sales Discounts by the buyer.

A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called cash discounts.

Complete the following data taken from the condensed income statements for merchandising Companies A, B, & C.

The adjusting entry to record inventory shrinkage would generally include a debit to Cost of Merchandise Sold.

Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?

The statement of owner's equity shows

The abbreviation FOB stands for Free On Board.

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

Multiple-step income statements show

Using the following information, what is the amount of gross profit?

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

Inventory shortage is recorded when

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

The inventory system employing accounting records that continuously disclose the amount of inventory is called

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