Question 1

Screen Shots Photography Store has the following trial balance at their year end,December 31,2015.  Prepare a classified multiple-step income statement in good form for Screen Shots Photography Store for their 2015 fiscal year.

Accepted Answer

The answer of Screen Shots Photography Store has the following...

Question 2

Goods and services tax (GST)or Harmonized Sales Tax (HST)is calculated on the original purchase price plus the provincial sales tax (PST).

Accepted Answer

A) True 
 B)False

Question 3

Merchandise inventory is included in the Plant and Equipment section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

A perpetual inventory system is able to directly measure shrinkage.

Accepted Answer

A) True 
 B)False

Question 5

In a periodic inventory system,cost of goods sold is not recorded as each sale occurs.

Accepted Answer

A) True 
 B)False

Question 6

A merchandising company:

Accepted Answer

A)  Earns net income from buying and selling merchandise. 
B)  Buys products from manufacturers and sells to retailers. 
C)  Buys products from manufacturers and sells them to consumers. 
D)  Reports cost of goods sold on the income statement. 
E)  All of these answers are correct.

Question 7

The periodic inventory system is superior to the perpetual inventory system in preventing shrinkage.

Accepted Answer

A) True 
 B)False

Exam 5: Accounting for Merchandising Activities

Screen Shots Photography Store has the following trial balance at their year end,December 31,2015. Prepare a classified multiple-step income statement in good form for Screen Shots Photography Store for their 2015 fiscal year.

Goods and services tax (GST)or Harmonized Sales Tax (HST)is calculated on the original purchase price plus the provincial sales tax (PST).

Merchandise inventory is included in the Plant and Equipment section of the balance sheet.

A perpetual inventory system is able to directly measure shrinkage.

In a periodic inventory system,cost of goods sold is not recorded as each sale occurs.

A merchandising company:

The periodic inventory system is superior to the perpetual inventory system in preventing shrinkage.