Question 1

The amount of gross profit for a merchandising business will be the same under both the accrual basis and the cash basis of accounting.

Accepted Answer

A) True 
 B)False

Question 2

A(n)_______________ is a middleman who buys products from manufacturers and sells to retailers.

Accepted Answer

The answer of A(n)_______________ is a middleman who buys products...

Question 3

Periodic inventory systems were historically used by companies that sold large quantities of low-value items.

Accepted Answer

A) True 
 B)False

Question 4

Describe the periodic and perpetual inventory systems.

Accepted Answer

A periodic inventory system provides for

Question 5

Expenses that support the overall operations of a business and include the expenses of such activities as providing accounting services,human resource management,and financial management are called:

Accepted Answer

A)  Operating expenses. 
B)  Selling expenses. 
C)  Purchasing expenses. 
D)  General and administrative expenses. 
E)  Miscellaneous expenses. 
A)  Operating expenses. 
B)  Selling expenses. 
C)  Purchasing expenses. 
D)  General and administrative expenses. 
E)  Miscellaneous expenses.

Question 6

Assets tied up in inventory are not productive assets.

Accepted Answer

A) True 
 B)False

Question 7

For a business,provincial sales tax (PST)paid is included in the amount recorded as an asset or an expense when a purchase is made.

Accepted Answer

A) True 
 B)False

Question 8

Companies try to lengthen their operating cycles to increase net income.

Accepted Answer

A) True 
 B)False

Question 9

2/10,n/30 is interpreted as:

Accepted Answer

A)  2% cash discount if the whole amount is paid within 10 days,the balance is due in 30 days. 
B)  10% cash discount if the whole amount is paid within 2 days,the balance is due in 30 days. 
C)  30% discount if paid within 2 days. 
D)  30% discount if paid within 10 days. 
E)  2% discount if paid within 30 days. 
A)  2% cash discount if the whole amount is paid within 10 days,the balance is due in 30 days. 
B)  10% cash discount if the whole amount is paid within 2 days,the balance is due in 30 days. 
C)  30% discount if paid within 2 days. 
D)  30% discount if paid within 10 days. 
E)  2% discount if paid within 30 days.

Question 10

Trade discounts are entered into the accounting system.

Accepted Answer

A) True 
 B)False

Question 11

In a periodic inventory system:

Accepted Answer

A)  The company records the cost of new merchandise in the permanent Purchases account. 
B)  The cost of merchandise on hand is determined by relating the quantities on hand to records showing each item's original cost. 
C)  The inventory value is not based on a physical count. 
D)  A continuous record of the amount of inventory on hand is maintained. 
E)  None of these answers apply. 
A)  The company records the cost of new merchandise in the permanent Purchases account. 
B)  The cost of merchandise on hand is determined by relating the quantities on hand to records showing each item's original cost. 
C)  The inventory value is not based on a physical count. 
D)  A continuous record of the amount of inventory on hand is maintained. 
E)  None of these answers apply.

Question 12

Some businesses use only one account to keep track of the amount of goods and services tax (GST)and/or Harmonized Sales Tax (HST)owed or owing.

Accepted Answer

A) True 
 B)False

Question 13

A merchandiser earns net income by buying and selling merchandise.

Accepted Answer

A) True 
 B)False

Question 14

A debit to Sales Returns and Allowances and a credit to Accounts Receivable mean that a customer may have returned merchandise.

Accepted Answer

A) True 
 B)False

Question 15

Merchandise inventory refers to products a company owns for purposes of selling to customers.

Accepted Answer

A) True 
 B)False

Question 16

The following information is available for Oz Systems for the year ended March 31,2015:   Prepare a multiple-step income statement in good form for Oz Systems.

Accepted Answer

The answer of The following information is available for Oz...

Question 17

Cost of goods sold is:

Accepted Answer

A)  Another term for net sales. 
B)  The term used for the cost of buying and preparing merchandise. 
C)  An operating expense. 
D)  Also called gross margin. 
E)  The cost of goods sold to customers. 
A)  Another term for net sales. 
B)  The term used for the cost of buying and preparing merchandise. 
C)  An operating expense. 
D)  Also called gross margin. 
E)  The cost of goods sold to customers.

Question 18

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

Accepted Answer

A) True 
 B)False

Question 19

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions on the books of Neutron:

Accepted Answer

The answer of Neutron uses a periodic inventory system.Prepare general...

Question 20

A trade discount is:

Accepted Answer

A)  A term used by a purchaser to describe a cash discount given to customers for prompt payment. 
B)  A reduction below a list price. 
C)  A term used by a seller to describe a cash discount granted to customers for prompt payment. 
D)  A reduction in price for prompt payment. 
E)  Also called a rebate. 
A)  A term used by a purchaser to describe a cash discount given to customers for prompt payment. 
B)  A reduction below a list price. 
C)  A term used by a seller to describe a cash discount granted to customers for prompt payment. 
D)  A reduction in price for prompt payment. 
E)  Also called a rebate.

The amount of gross profit for a merchandising business will be the same under both the accrual basis and the cash basis of accounting.

A(n)_______________ is a middleman who buys products from manufacturers and sells to retailers.

Periodic inventory systems were historically used by companies that sold large quantities of low-value items.

Describe the periodic and perpetual inventory systems.

Expenses that support the overall operations of a business and include the expenses of such activities as providing accounting services,human resource management,and financial management are called:

Assets tied up in inventory are not productive assets.

For a business,provincial sales tax (PST)paid is included in the amount recorded as an asset or an expense when a purchase is made.

Companies try to lengthen their operating cycles to increase net income.

2/10,n/30 is interpreted as:

Trade discounts are entered into the accounting system.

In a periodic inventory system:

Some businesses use only one account to keep track of the amount of goods and services tax (GST)and/or Harmonized Sales Tax (HST)owed or owing.

A merchandiser earns net income by buying and selling merchandise.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable mean that a customer may have returned merchandise.

Merchandise inventory refers to products a company owns for purposes of selling to customers.

The following information is available for Oz Systems for the year ended March 31,2015: Prepare a multiple-step income statement in good form for Oz Systems.

Cost of goods sold is:

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions on the books of Neutron:

A trade discount is:

Accounting in Business

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters

Exam 5: Accounting for Merchandising Activities

The amount of gross profit for a merchandising business will be the same under both the accrual basis and the cash basis of accounting.

A(n)_______________ is a middleman who buys products from manufacturers and sells to retailers.

Periodic inventory systems were historically used by companies that sold large quantities of low-value items.

Describe the periodic and perpetual inventory systems.

Expenses that support the overall operations of a business and include the expenses of such activities as providing accounting services,human resource management,and financial management are called:

Assets tied up in inventory are not productive assets.

For a business,provincial sales tax (PST)paid is included in the amount recorded as an asset or an expense when a purchase is made.

Companies try to lengthen their operating cycles to increase net income.

2/10,n/30 is interpreted as:

Trade discounts are entered into the accounting system.

In a periodic inventory system:

Some businesses use only one account to keep track of the amount of goods and services tax (GST)and/or Harmonized Sales Tax (HST)owed or owing.

A merchandiser earns net income by buying and selling merchandise.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable mean that a customer may have returned merchandise.

Merchandise inventory refers to products a company owns for purposes of selling to customers.

The following information is available for Oz Systems for the year ended March 31,2015: Prepare a multiple-step income statement in good form for Oz Systems.

Cost of goods sold is:

Sellers offer a purchase discount to buyers for prompt payment for purchases on account.

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions on the books of Neutron:

A trade discount is:

Accounting in Business

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters