Question 1

_______________________ are nonoperating activities that include interest, dividend, and rent revenues, and gains from asset disposals.

Accepted Answer

Other Reve

Question 2

Using the following year-end information for Breanna Boutique, calculate the current ratio and acid-test ratio for the boutique:

Accepted Answer

A)  1.8 and 1 
B)  1.97 and 1.52 
C)  2.73 and 1.52 
D)  3.50 and 0.90 
E)  None of these 
A)  1.8 and 1 
B)  1.97 and 1.52 
C)  2.73 and 1.52 
D)  3.50 and 0.90 
E)  None of these

Question 3

ABC Corporation's total quick assets were $5,888,000, its current assets were $11,700,000 and its current liabilities were $8,000,000. Its acid-test ratio equals:

Accepted Answer

A)  0.50. 
B)  0.68. 
C)  0.74. 
D)  1.50. 
E)  2.20. 
A)  0.50. 
B)  0.68. 
C)  0.74. 
D)  1.50. 
E)  2.20.

Question 4

Following is the year-end adjusted trial balance for Yakima's Sporting Goods for the current year:   Prepare the closing entries at December 31 for the current year.

Accepted Answer

The answer of Following is the year-end adjusted trial balance...

Question 5

Roller Blade Company uses the perpetual inventory system and had the following transactions during October:   Prepare journal entries to record each of the preceding transactions.

Accepted Answer

The answer of Roller Blade Company uses the perpetual inventory...

Question 6

A buyer failed to take advantage of the vendor's credit terms of 2/15, n/45, but instead paid the invoice in full at the end of 60 days. By not taking advantage of the cash discount, the buyer lost the equivalent of ____________ annual interest on the amount of the purchase.

Accepted Answer

A)  12.2% 
B)  16.2% 
C)  18.9% 
D)  24.3% 
E)  24.5% 
A)  12.2% 
B)  16.2% 
C)  18.9% 
D)  24.3% 
E)  24.5%

Question 7

The amount recorded for merchandise inventory includes all of the following except:

Accepted Answer

A)  Purchase discounts. 
B)  Returns and allowances. 
C)  Freight costs paid by the buyer. 
D)  Freight costs paid by the seller. 
E)  Trade discounts. 
A)  Purchase discounts. 
B)  Returns and allowances. 
C)  Freight costs paid by the buyer. 
D)  Freight costs paid by the seller. 
E)  Trade discounts.

Question 8

Sales discounts can benefit a seller by decreasing the delay in receiving cash, and __________.

Accepted Answer

Reducing F

Question 9

Which of the following accounts would be closed with a debit?

Accepted Answer

A)  Sales Discounts. 
B)  Sales Returns and Allowances. 
C)  Cost of Goods Sold. 
D)  Operating Expenses. 
E)  Sales. 
A)  Sales Discounts. 
B)  Sales Returns and Allowances. 
C)  Cost of Goods Sold. 
D)  Operating Expenses. 
E)  Sales.

Question 10

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

A _____________________ income statement format shows detailed computations of net sales and other costs and expenses, and reports subtotals for various classes of items.

Accepted Answer

The answer of A _____________________ income statement format shows detailed...

Question 12

Inventory shrinkage can be computed by comparing the ___________ of inventory with recorded quantities and amounts.

Accepted Answer

Physical C

Question 13

A debit memorandum is:

Accepted Answer

A)  Required whenever a journal entry is recorded. 
B)  The source document for the purchase of merchandise inventory. 
C)  Required when a purchase discount is granted. 
D)  The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records. 
E)  Not necessary in a perpetual inventory system. 
A)  Required whenever a journal entry is recorded. 
B)  The source document for the purchase of merchandise inventory. 
C)  Required when a purchase discount is granted. 
D)  The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records. 
E)  Not necessary in a perpetual inventory system.

Question 14

A period's ___________________ becomes the next period's beginning inventory.

Accepted Answer

The answer of A period's ___________________ becomes the next period's...

Question 15

What are the difference(s) between the periodic and the perpetual inventory systems?

Accepted Answer

The answer of What are the difference(s) between the periodic...

Question 16

A ___________ is an intermediary that buys products from manufacturers and sells to retailers.

Accepted Answer

The answer of A ___________ is an intermediary that buys...

Question 17

Brig Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Cost of goods sold equals:

Accepted Answer

A)  $150,000. 
B)  $450,000. 
C)  $800,000. 
D)  $350,000. 
E)  $200,000. 
A)  $150,000. 
B)  $450,000. 
C)  $800,000. 
D)  $350,000. 
E)  $200,000.

Question 18

A company records the following journal entry: debit Cash $1,470, debit Sales Discounts $30, and credit Accounts Receivable $1,500. This means that a customer has taken a ___ cash discount for early payment.

Accepted Answer

A)  1% 
B)  2% 
C)  5% 
D)  10% 
E)  15% 
A)  1% 
B)  2% 
C)  5% 
D)  10% 
E)  15%

Question 19

A company had a gross profit of $300,000 based on sales of $400,000. Its cost of goods sold equals $700,000.

Accepted Answer

A) True 
 B)False

Question 20

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accepted Answer

The answer of A ______________________ income statement includes cost of...

Exam 5: Accounting for Merchandising Operations

_______________________ are nonoperating activities that include interest, dividend, and rent revenues, and gains from asset disposals.

Using the following year-end information for Breanna Boutique, calculate the current ratio and acid-test ratio for the boutique:

ABC Corporation's total quick assets were $5,888,000, its current assets were $11,700,000 and its current liabilities were $8,000,000. Its acid-test ratio equals:

Following is the year-end adjusted trial balance for Yakima's Sporting Goods for the current year: Prepare the closing entries at December 31 for the current year.

Roller Blade Company uses the perpetual inventory system and had the following transactions during October: Prepare journal entries to record each of the preceding transactions.

A buyer failed to take advantage of the vendor's credit terms of 2/15, n/45, but instead paid the invoice in full at the end of 60 days. By not taking advantage of the cash discount, the buyer lost the equivalent of ____________ annual interest on the amount of the purchase.

The amount recorded for merchandise inventory includes all of the following except:

Sales discounts can benefit a seller by decreasing the delay in receiving cash, and __________.

Which of the following accounts would be closed with a debit?

Merchandise inventory is reported in the long-term assets section of the balance sheet.

A _____________________ income statement format shows detailed computations of net sales and other costs and expenses, and reports subtotals for various classes of items.

Inventory shrinkage can be computed by comparing the ___________ of inventory with recorded quantities and amounts.

A debit memorandum is:

A period's ___________________ becomes the next period's beginning inventory.

What are the difference(s) between the periodic and the perpetual inventory systems?

A ___________ is an intermediary that buys products from manufacturers and sells to retailers.

Brig Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Cost of goods sold equals:

A company records the following journal entry: debit Cash $1,470, debit Sales Discounts $30, and credit Accounts Receivable $1,500. This means that a customer has taken a ___ cash discount for early payment.

A company had a gross profit of $300,000 based on sales of $400,000. Its cost of goods sold equals $700,000.

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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