Question 1

Casey Company purchases goods for resale from Tim Corporation. The amount of the purchase is $12,500 with terms of 3/10, n/30. Casey returns $500 of the goods. Under the perpetual inventory method, the journal entry to record the return is:

Accepted Answer

A)  debit Accounts Payable; credit Purchase Returns and Allowances. 
B)  debit Purchase Returns and Allowances; credit Accounts Payable. 
C)  debit Accounts Payable; credit Inventory. 
D)  debit Accounts Payable; credit Purchase Discounts. 
E)  debit Accounts Receivable; credit Inventory.

Question 2

A list of credit customers is called a(n):

Accepted Answer

A)  accounts payable subsidiary ledger. 
B)  general ledger. 
C)  accounts receivable subsidiary ledger. 
D)  general journal. 
E)  accounts receivable trial balance.

Question 3

Depending on the inventory system the merchandiser uses, the recording of the purchase and sale of inventory are accounted for differently.

Accepted Answer

A) True 
 B)False

Question 4

The name of the supplier (vendor) is listed in the Accounts Payable subsidiary ledger:

Accepted Answer

A) True 
 B)False

Question 5

When a company sells goods to customers FOB destination, what account does the company use for the cost of shipment?

Accepted Answer

The answer of When a company sells goods to customers...

Question 6

Prepare the journal entries in Retro's books for the following transactions assuming a periodic system.
March 1 Retro Corp. purchased $8,000 of merchandise from Alloy Corp. on account,
terms 2/15, n/30. FOB shipping point. The goods cost Alloy $2,900.
March 9 Retro paid a $200 freight bill for delivery of the goods purchased on March 1.
March 11 Retro returned $1,000 of the merchandise purchased on March 1.
The goods cost Alloy $450.
March 15 Retro paid for the March 1 purchase in full.

Accepted Answer

The answer of Prepare the journal entries in Retro's books...

Question 7

When the perpetual records do not equal the physical count of the inventory, the general ledger is updated with the differences.

Accepted Answer

A) True 
 B)False

Question 8

Journalize the following transactions using the periodic system:
Sept. 3 Purchased $1,870 worth of inventory from Sierra Company with terms 2/10 n/30.
Sept. 9 Returned $400 worth of the inventory purchased on Sept. 3 as goods were defective.
Sept.12 Paid for the Sept. 3 purchase.
Sept.19 Purchased $900 of merchandise on account from Lola Company with Terms of 3/15, n/45.

Accepted Answer

The answer of Journalize the following transactions using the periodic...

Question 9

The current ratio is computed by dividing current liabilities by current assets.

Accepted Answer

A) True 
 B)False

Question 10

What would be the credit terms that allows a discount of 3% if payment is made within 15 days of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from the date of the invoice?

Accepted Answer

The answer of What would be the credit terms that...

Question 11

Journalize the following transactions using the periodic system:
Aug. 6 Purchased $1,030 of inventory on account from Johnston with terms of 2/10, n/30.
Aug. 8 Purchased $2,001 of inventory for cash from Pillner Company.
Aug.15 Paid for August 6 purchase from Johnston.
Aug. 17 Purchased $1,700 of merchandise on account from Luis Company with Terms of 3/15, n/45.

Accepted Answer

The answer of Journalize the following transactions using the periodic...

Question 12

Prepare the period-end adjusting entries for a periodic inventory system:
Beginning Inventory $55,000
Purchases $69,000
Purchases Discounts $4,000
Purchases Returns $6,500
Transportation-in 32,000
Ending Inventory $52,000

Accepted Answer

The answer of Prepare the period-end adjusting entries for a...

Question 13

Given the following information, prepare a balance sheet for Isaiah's Tool Shed for the year ending December 31, 2012.

Accepted Answer

The answer of Given the following information, prepare a balance...

Question 14

Journalize the following transactions using the periodic inventory method.
Dec. 1 Purchased $4,900 worth of merchandise from Lolas on terms 2/10 n/30, FOB shipping point.
Dec. 5 Paid for $400 of shipping charges.
Dec. 9 Returned $900 worth of inventory to Lolas.
Dec. 10 Paid the invoice from Lolas.

Accepted Answer

The answer of Journalize the following transactions using the periodic...

Question 15

What is the journal entry to record the company's cost of selling merchandise under a perpetual inventory system?

Accepted Answer

The answer of What is the journal entry to record...

Question 16

What type of internet company are Amazon.ca and Walmart.ca?

Accepted Answer

A)  service businesses 
B)  manufacturing businesses 
C)  retail businesses 
D)  wholesalers 
E)  financial businesses

Question 17

On July 1, Cara Corp. buys $2,000 of goods on account from IMNl Inc. The terms of the purchase are 2/10, n/30, FOB shipping point. IMNI Inc. prepaid $80 of shipping costs and charges Cara Corp for these shipping costs. Cara then returns $200 of these goods for credit on July 10. On July 15, Cara makes payment in full for the purchase. What is the amount that Cara paid to IMNI Inc.?

Accepted Answer

The answer of On July 1, Cara Corp. buys $2,000...

Question 18

Journalize the following transactions using the perpetual inventory method.
Dec. 1 Purchased $2,900 worth of merchandise from Wills on terms 2/10 n/30, FOB shipping point.
Dec. 5 Paid for $200 of shipping charges.
Dec. 9 Returned $400 worth of inventory to Wills.
Dec. 10 Paid the invoice from Wills.

Accepted Answer

The answer of Journalize the following transactions using the perpetual...

Question 19

A company pays an invoice early and takes 4% off of the original invoice price. The account to be credited for this amount under a perpetual inventory system is:

Accepted Answer

A)  Inventory. 
B)  Accounts Payable. 
C)  Purchases Discount. 
D)  Cash. 
E)  Purchases Returns.

Question 20

Journalize the following transactions for Jill Company using the perpetual inventory method.
June 8 Jill Co. sold $3,500 of merchandise, costing $2,850 on account to Betty, terms 3/10, n/30.
June 12 Betty returned $350 of the merchandise, costing $190 to Jill Company for credit on her account.
June 16 Betty paid her balance.

Accepted Answer

The answer of Journalize the following transactions for Jill Company...

Exam 5: Accounting for a Merchandising Business

Casey Company purchases goods for resale from Tim Corporation. The amount of the purchase is $12,500 with terms of 3/10, n/30. Casey returns $500 of the goods. Under the perpetual inventory method, the journal entry to record the return is:

A list of credit customers is called a(n) :

Depending on the inventory system the merchandiser uses, the recording of the purchase and sale of inventory are accounted for differently.

The name of the supplier (vendor) is listed in the Accounts Payable subsidiary ledger:

When a company sells goods to customers FOB destination, what account does the company use for the cost of shipment?

When the perpetual records do not equal the physical count of the inventory, the general ledger is updated with the differences.

The current ratio is computed by dividing current liabilities by current assets.

What would be the credit terms that allows a discount of 3% if payment is made within 15 days of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from the date of the invoice?

Prepare the period-end adjusting entries for a periodic inventory system: Beginning Inventory $55,000 Purchases $69,000 Purchases Discounts $4,000 Purchases Returns $6,500 Transportation-in 32,000 Ending Inventory $52,000

Given the following information, prepare a balance sheet for Isaiah's Tool Shed for the year ending December 31, 2012.

Journalize the following transactions using the periodic inventory method. Dec. 1 Purchased $4,900 worth of merchandise from Lolas on terms 2/10 n/30, FOB shipping point. Dec. 5 Paid for $400 of shipping charges. Dec. 9 Returned $900 worth of inventory to Lolas. Dec. 10 Paid the invoice from Lolas.

What is the journal entry to record the company's cost of selling merchandise under a perpetual inventory system?

What type of internet company are Amazon.ca and Walmart.ca?

Journalize the following transactions using the perpetual inventory method. Dec. 1 Purchased $2,900 worth of merchandise from Wills on terms 2/10 n/30, FOB shipping point. Dec. 5 Paid for $200 of shipping charges. Dec. 9 Returned $400 worth of inventory to Wills. Dec. 10 Paid the invoice from Wills.

A company pays an invoice early and takes 4% off of the original invoice price. The account to be credited for this amount under a perpetual inventory system is: