Question 1

Under the periodic inventory system

Accepted Answer

A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transaferred to the Cost of Goods Sold account. 
C) the balance of the Merchandise Inventory account equals the cost of goods on hand. 
D) the balance of the Merchandise Inventory account is only accurate on the balance sheet date. 
A) the cost of each item is recorded in the Merchandise Inventory account when it is purchased. 
B) when an inventory item is sold,its cost is transaferred to the Cost of Goods Sold account. 
C) the balance of the Merchandise Inventory account equals the cost of goods on hand. 
D) the balance of the Merchandise Inventory account is only accurate on the balance sheet date.

Question 2

If a U.S.company purchases goods from a British supplier for a fixed number of U.S.dollars,an exchange gain or loss would not arise for the U.S.company,even if the exchange rate has changed between the time of purchase and the time of payment.

Accepted Answer

A) True 
 B)False

Question 3

The net cost of purchases is found by adding freight-in to net purchases.

Accepted Answer

A) True 
 B)False

Question 4

Whalen Mining,a U.S company,purchases products from a British company for £1,000,000.Between the dates of purchase and payment,the exchange value of the pound decreased from $2.00 to $1.90.Compute Whalen Mining's exchange gain or loss.Where would the gain or loss be reported?

Accepted Answer

Whalen Mining has an exchange gain of $1

Question 5

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is an actual account on the books?

Accepted Answer

A) Cost of goods sold. 
B) Gross margin. 
C) Net income. 
D) Income from operations. 
A) Cost of goods sold. 
B) Gross margin. 
C) Net income. 
D) Income from operations.

Question 7

Under the perpetual inventory system,the Cost of Goods Sold and Merchandise Inventory accounts are updated with each sale.

Accepted Answer

A) True 
 B)False

Question 8

Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the cost of goods available for sale for the year ended December 31,20x5.

Accepted Answer

@#IMG-DLM& Cost of Goods Available for Sale must b

Question 9

Purchase discounts are discounts that a buyer takes for the early payment of merchandise.

Accepted Answer

A) True 
 B)False

Question 10

The following lettered items represent a classification scheme for a multistep income statement.In the blank next to each account,write the letter indicating to which category it belongs.

Accepted Answer

The answer of The following lettered items represent a classification...

Question 11

When the terms are FOB destination,the title passes at the point of origin and the buyer pays the transportation costs.

Accepted Answer

A) True 
 B)False

Question 12

If it takes Diamondback Enterprises 90 days to sell inventory,46 days to collect from the sale,and creditors' payment terms are 60 days,the financing period is

Accepted Answer

A) 196 days. 
B) 46 days. 
C) 90 days. 
D) 76 days. 
A) 196 days. 
B) 46 days. 
C) 90 days. 
D) 76 days.

Question 13

A discount that buyers take for early payment of merchandise is called a

Accepted Answer

A) customer discount. 
B) purchases discount. 
C) sales discount. 
D) trade discount. 
A) customer discount. 
B) purchases discount. 
C) sales discount. 
D) trade discount.

Question 14

Under the perpetual inventory system,which of the following accounts would not be used?

Accepted Answer

A) Cost of Goods Sold 
B) Merchandise Inventory 
C) Sales 
D) Purchases 
A) Cost of Goods Sold 
B) Merchandise Inventory 
C) Sales 
D) Purchases

Question 15

When the terms are FOB shipping point,the title passes at the destinationand the seller pays the transportation costs.

Accepted Answer

A) True 
 B)False

Question 16

The operating cycle for a merchandiser is

Accepted Answer

A) the period of time it takes to sell a unit of inventory. 
B) the same for all companies. 
C) most generally a year. 
D) the time to buy,hold,sell,and collect payment for a sale. 
A) the period of time it takes to sell a unit of inventory. 
B) the same for all companies. 
C) most generally a year. 
D) the time to buy,hold,sell,and collect payment for a sale.

Question 17

With the periodic inventory system,cost of goods available for sale must be calculated after cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 18

A trade discount is the same as a sales discount.

Accepted Answer

A) True 
 B)False

Question 19

FOB shipping point means that the seller incurs the shipping costs.

Accepted Answer

A) True 
 B)False

Question 20

The collection of a $2,000 account beyond the 2 percent discount period would result in a(n)

Accepted Answer

A) increase to Cash for $1,960. 
B) decrease to Accounts Receivable for $2,000. 
C) decrease to Cash for $2,000. 
D) increase to Sales Discounts for $40. 
A) increase to Cash for $1,960. 
B) decrease to Accounts Receivable for $2,000. 
C) decrease to Cash for $2,000. 
D) increase to Sales Discounts for $40.

Under the periodic inventory system

If a U.S.company purchases goods from a British supplier for a fixed number of U.S.dollars,an exchange gain or loss would not arise for the U.S.company,even if the exchange rate has changed between the time of purchase and the time of payment.

The net cost of purchases is found by adding freight-in to net purchases.

Whalen Mining,a U.S company,purchases products from a British company for £1,000,000.Between the dates of purchase and payment,the exchange value of the pound decreased from $2.00 to $1.90.Compute Whalen Mining's exchange gain or loss.Where would the gain or loss be reported?

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

Which of the following is an actual account on the books?

Under the perpetual inventory system,the Cost of Goods Sold and Merchandise Inventory accounts are updated with each sale.

Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the cost of goods available for sale for the year ended December 31,20x5.

Purchase discounts are discounts that a buyer takes for the early payment of merchandise.

The following lettered items represent a classification scheme for a multistep income statement.In the blank next to each account,write the letter indicating to which category it belongs.

When the terms are FOB destination,the title passes at the point of origin and the buyer pays the transportation costs.

If it takes Diamondback Enterprises 90 days to sell inventory,46 days to collect from the sale,and creditors' payment terms are 60 days,the financing period is

A discount that buyers take for early payment of merchandise is called a

Under the perpetual inventory system,which of the following accounts would not be used?

When the terms are FOB shipping point,the title passes at the destinationand the seller pays the transportation costs.

The operating cycle for a merchandiser is

With the periodic inventory system,cost of goods available for sale must be calculated after cost of goods sold.

A trade discount is the same as a sales discount.

FOB shipping point means that the seller incurs the shipping costs.

The collection of a $2,000 account beyond the 2 percent discount period would result in a(n)

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters

Exam 6: Accounting for Merchandising Operations

Under the periodic inventory system

If a U.S.company purchases goods from a British supplier for a fixed number of U.S.dollars,an exchange gain or loss would not arise for the U.S.company,even if the exchange rate has changed between the time of purchase and the time of payment.

The net cost of purchases is found by adding freight-in to net purchases.

Whalen Mining,a U.S company,purchases products from a British company for £1,000,000.Between the dates of purchase and payment,the exchange value of the pound decreased from $2.00 to $1.90.Compute Whalen Mining's exchange gain or loss.Where would the gain or loss be reported?

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

Which of the following is an actual account on the books?

Under the perpetual inventory system,the Cost of Goods Sold and Merchandise Inventory accounts are updated with each sale.

Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the cost of goods available for sale for the year ended December 31,20x5.

Purchase discounts are discounts that a buyer takes for the early payment of merchandise.

The following lettered items represent a classification scheme for a multistep income statement.In the blank next to each account,write the letter indicating to which category it belongs.

When the terms are FOB destination,the title passes at the point of origin and the buyer pays the transportation costs.

If it takes Diamondback Enterprises 90 days to sell inventory,46 days to collect from the sale,and creditors' payment terms are 60 days,the financing period is

A discount that buyers take for early payment of merchandise is called a

Under the perpetual inventory system,which of the following accounts would not be used?

When the terms are FOB shipping point,the title passes at the destinationand the seller pays the transportation costs.

The operating cycle for a merchandiser is

With the periodic inventory system,cost of goods available for sale must be calculated after cost of goods sold.

A trade discount is the same as a sales discount.

FOB shipping point means that the seller incurs the shipping costs.

The collection of a $2,000 account beyond the 2 percent discount period would result in a(n)

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters