Question 1

On November 1,2016,Everett Janitorial Supply sold merchandise with a cost of $3,200 for $5,000,FOB destination,and payment terms of 2/10,n/30.The company uses a perpetual inventory system.Give journal entries to record the sales revenue.

Accepted Answer

The answer of On November 1,2016,Everett Janitorial Supply sold merchandise...

Question 2

Anderson Furniture sold 15 desks,with a cost of $7,500,for $13,250 on account.Anderson uses the periodic inventory system.Which of the following is the correct way to record this transaction?

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 3

Which of the following is the correct journal entry for a return of goods that were purchased on account under the periodic inventory system?

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 4

Gross profit represents the mark-up on ________.

Accepted Answer

A) sales revenue 
B) merchandise inventory 
C) operating expenses 
D) transportation cost

Question 5

The revenue,expenses,Sales Returns and Allowances,and Sales Discounts will be closed via the ________ account.

Accepted Answer

A) Income Summary 
B) Owner,Capital 
C) Dividend 
D) Stockholders' Equity

Question 6

The perpetual inventory system keeps a running record of inventory and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 7

If a physical count of inventory indicates that the Merchandise Inventory account is overstated,an adjusting entry is required to record the difference.

Accepted Answer

A) True 
 B)False

Question 8

Cost of goods available for sale represents beginning merchandise inventory plus net purchases less freight in.

Accepted Answer

A) True 
 B)False

Question 9

Portian Merchandisers has purchased merchandise on account and paid $450 for freight in.Give the journal entry for freight paid.(Assume a perpetual inventory system. )

Accepted Answer

The answer of Portian Merchandisers has purchased merchandise on account...

Question 10

The Merchandise Inventory account is an expense account that is used for goods purchased that the business owns and intends to resell to customers,as well as for purchase of office supplies and equipment.

Accepted Answer

A) True 
 B)False

Question 11

Up-to-date Merchandisers has the following transactions for the month of July.

Calculate Gross Profit.

Accepted Answer

A) $44,000 
B) $82,000 
C) $100,000 
D) $120,000

Question 12

Which of the following is the correct journal entry for freight paid on goods purchased by a merchandiser using the periodic inventory system?

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 13

A wholesaler is a merchandiser who buys merchandise from a manufacturer and sells the same to a retailer.

Accepted Answer

A) True 
 B)False

Question 14

Under the perpetual inventory system,what is the difference between a sales return and a sales allowance?

Accepted Answer

A) A sales return reduces the amount receivable from the customer,but a sales allowance does not. 
B) A sales return involves an adjustment to Merchandise Inventory,but a sales allowance does not. 
C) A sales return requires a debit to Sales Returns and Allowances,but a sales allowance does not. 
D) A sales return is not deducted from sales revenue to calculate net sales,but a sales allowance is deducted from sales revenue.

Question 15

The operating cycle of a merchandiser begins when the company purchases inventory from a vendor and ends when the company collects cash from customers.

Accepted Answer

A) True 
 B)False

Question 16

When preparing the worksheet for a merchandising business using the perpetual inventory system,the main new account is the Merchandise Inventory account.

Accepted Answer

A) True 
 B)False

Question 17

Journalize the following sales transactions for Smith Printing Equipment using the periodic inventory system.Explanations are not required.

Accepted Answer

The answer of Journalize the following sales transactions for Smith...

Question 18

Even in a perpetual inventory system that updates the inventory account as and when transactions occur,the business must count its inventory at least once in a year.

Accepted Answer

A) True 
 B)False

Question 19

When a merchandiser records sales returns,Accounts Receivable is credited.(Assume the seller uses the perpetual inventory system. )

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is subtracted from net sales revenue to arrive at gross profit on a multi-step income statement?

Accepted Answer

A) cost of goods available for sale 
B) cost of goods sold 
C) sales discounts and sales returns and allowances 
D) operating expenses

Exam 5: Merchandising Operations

On November 1,2016,Everett Janitorial Supply sold merchandise with a cost of $3,200 for $5,000,FOB destination,and payment terms of 2/10,n/30.The company uses a perpetual inventory system.Give journal entries to record the sales revenue.

Anderson Furniture sold 15 desks,with a cost of $7,500,for $13,250 on account.Anderson uses the periodic inventory system.Which of the following is the correct way to record this transaction?

Which of the following is the correct journal entry for a return of goods that were purchased on account under the periodic inventory system?

Gross profit represents the mark-up on ________.

The revenue,expenses,Sales Returns and Allowances,and Sales Discounts will be closed via the ________ account.

The perpetual inventory system keeps a running record of inventory and cost of goods sold.

If a physical count of inventory indicates that the Merchandise Inventory account is overstated,an adjusting entry is required to record the difference.

Cost of goods available for sale represents beginning merchandise inventory plus net purchases less freight in.

Portian Merchandisers has purchased merchandise on account and paid $450 for freight in.Give the journal entry for freight paid.(Assume a perpetual inventory system. )

The Merchandise Inventory account is an expense account that is used for goods purchased that the business owns and intends to resell to customers,as well as for purchase of office supplies and equipment.

Up-to-date Merchandisers has the following transactions for the month of July. Calculate Gross Profit.

Which of the following is the correct journal entry for freight paid on goods purchased by a merchandiser using the periodic inventory system?

A wholesaler is a merchandiser who buys merchandise from a manufacturer and sells the same to a retailer.

Under the perpetual inventory system,what is the difference between a sales return and a sales allowance?

The operating cycle of a merchandiser begins when the company purchases inventory from a vendor and ends when the company collects cash from customers.

When preparing the worksheet for a merchandising business using the perpetual inventory system,the main new account is the Merchandise Inventory account.

Journalize the following sales transactions for Smith Printing Equipment using the periodic inventory system.Explanations are not required.

Even in a perpetual inventory system that updates the inventory account as and when transactions occur,the business must count its inventory at least once in a year.

When a merchandiser records sales returns,Accounts Receivable is credited.(Assume the seller uses the perpetual inventory system. )

Which of the following is subtracted from net sales revenue to arrive at gross profit on a multi-step income statement?