Question 1

Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows:
​  ​
Assume that Austin Maxwell pays his $400 receivable on January 3, taking the 2 percent discount to which he is entitled. Journalize the entry to record the transaction.

Accepted Answer

The answer of Surplus Galore uses the gross method of...

Question 2

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following items should not be included in the cost of ending inventory?

Accepted Answer

A)  purchased units in transit, shipped FOB shipping point 
B)  purchased units in transit, shipped FOB destination 
C)  units on hand in the warehouse 
D)  sold units in transit, not invoiced, and shipped FOB destination

Question 4

Which of the following is ,ot a difference between a retail business and a service business?

Accepted Answer

A)  in what is sold 
B)  the inclusion of gross profit on the income statement 
C)  accounting equation 
D)  inventory included on the balance sheet

Question 5

Calculate the gross profit for Jonas Company based on the following data:

Accepted Answer

The answer of Calculate the gross profit for Jonas Company...

Question 6

In a periodic inventory system, the cost of merchandise purchased includes the cost of freight in.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following accounts has a normal credit balance?

Accepted Answer

A)  Accounts Receivable 
B)  Sales 
C)  Inventory 
D)  Delivery Expense

Question 9

From the following list, identify accounts that will be closed at the end of the fiscal period.
(a) Advertising Expense
(b) Cash
(c) Accounts Receivable
(d) Salaries Expense
(e) Cost of Goods Sold
(f) Dividends
(g) Accumulated Depreciation-Building
(h) Interest Expense
(i) Sales Tax Payable

Accepted Answer

The answer of From the following list, identify accounts that...

Question 10

If the physical count of inventory revealed $158,000 of inventory on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shrinkage?

Accepted Answer

A)  debit Inventory, $158,000; credit Cost of Goods Sold, $158,000 
B)  debit Inventory, $5,000; credit Cost of Goods Sold, $5,000 
C)  debit Cost of Goods Sold, $163,000; credit Inventory, $158,000 
D)  debit Cost of Goods Sold, $5,000; credit Inventory, $5,000

Question 11

Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?

Accepted Answer

A)  Accounts Receivable-Stanton, debit $20,000; Sales, credit $20,000 
B)  Accounts Receivable-Stanton, debit $19,600; Sales, credit $19,600, and
Accounts Receivable-Stanton, debit $500; Cash, credit $500 
C)  Accounts Receivable-Stanton, debit $20,100; Sales, credit $20,100 
D)  Accounts Receivable-Stanton, debit $20,000; Sales, credit $20,000, and
Delivery Expense, debit $500; Cash, credit $500

Question 12

Taking advantage of a 2/10, n/30 purchases discount is equal to a yearly savings rate of approximately

Accepted Answer

A)  2% 
B)  24% 
C)  20% 
D)  36%

Question 13

Merchandise is ordered on November 10; the merchandise is shipped by the seller and the invoice is prepared, dated, and mailed by the seller on November 13; the merchandise is received by the buyer on November 18; the entry is made in the buyer's accounts on November 20. The credit period begins with what date?

Accepted Answer

A)  November 10 
B)  November 13 
C)  November 18 
D)  November 20

Question 14

What is the term applied to the excess of sales over the cost of goods sold?

Accepted Answer

A)  gross profit 
B)  operations 
C)  net income 
D)  gross sales

Question 15

Based upon the following data for a business with a periodic inventory system, determine the cost of goods sold for August.

Accepted Answer

The answer of Based upon the following data for a...

Question 16

When a large quantity of merchandise is purchased, a reduction allowed on the sale price is called a trade discount.

Accepted Answer

A) True 
 B)False

Question 17

The following selected accounts and their current balances appear in the ledger of Fernandez Co. at the end of its fiscal year.
 
-What are total operating expenses for Fernandez Co.?

Accepted Answer

A)  $2,175,000 
B)  $2,150,000 
C)  $3,510,000 
D)  $1,348,000

Question 18

Under the perpetual inventory system, all purchases of merchandise are debited to the account

Accepted Answer

A)  Inventory 
B)  Cost of Goods Sold 
C)  Inventory Available for Sale 
D)  Purchases

Question 19

Which of the following accounts will not be found in the Cost of Goods Sold section of the income statement for a company using the periodic inventory method?

Accepted Answer

A)  Purchases 
B)  Freight In 
C)  Selling Expense 
D)  Inventory

Question 20

Journalize the entries to record the following selected transactions:

Accepted Answer

The answer of Journalize the entries to record the following...

Exam 5: Accounting for Retail Businesses

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

Which of the following items should not be included in the cost of ending inventory?

Which of the following is ,ot a difference between a retail business and a service business?

Calculate the gross profit for Jonas Company based on the following data:

In a periodic inventory system, the cost of merchandise purchased includes the cost of freight in.

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

Which of the following accounts has a normal credit balance?

From the following list, identify accounts that will be closed at the end of the fiscal period. (a) Advertising Expense (b) Cash (c) Accounts Receivable (d) Salaries Expense (e) Cost of Goods Sold (f) Dividends (g) Accumulated Depreciation-Building (h) Interest Expense (i) Sales Tax Payable

If the physical count of inventory revealed $158,000 of inventory on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shrinkage?

Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?

Taking advantage of a 2/10, n/30 purchases discount is equal to a yearly savings rate of approximately

What is the term applied to the excess of sales over the cost of goods sold?

Based upon the following data for a business with a periodic inventory system, determine the cost of goods sold for August.

When a large quantity of merchandise is purchased, a reduction allowed on the sale price is called a trade discount.

The following selected accounts and their current balances appear in the ledger of Fernandez Co. at the end of its fiscal year. -What are total operating expenses for Fernandez Co.?

Under the perpetual inventory system, all purchases of merchandise are debited to the account

Which of the following accounts will not be found in the Cost of Goods Sold section of the income statement for a company using the periodic inventory method?

Journalize the entries to record the following selected transactions: