Question 1

List the steps of the operating cycle for a merchandiser with credit sales.

Accepted Answer

The steps are: (1) cash purcha

Question 2

Neutron uses a periodic inventory system. Prepare general journal entries to record the following transactions for Neutron:

Accepted Answer

The answer of Neutron uses a periodic inventory system. Prepare...

Question 3

Generally accepted accounting principles require companies to use a specific format for the financial statements.

Accepted Answer

A) True 
 B)False

Question 4

A company had net sales of $545,000 and cost of goods sold of $345,000, which means its gross margin is equal to $200,000.

Accepted Answer

A) True 
 B)False

Question 5

Beginning merchandise inventory plus the net cost of purchases is equal to the merchandise available for sale.

Accepted Answer

A) True 
 B)False

Question 6

What is inventory shrinkage? How do managers account for shrinkage?

Accepted Answer

Inventory shrinkage is the los

Question 7

A company had net sales of $82,000, cost of goods sold of $70,000, and other expenses of $2,000. Its gross margin ratio equals:

Accepted Answer

A)  85.37% 
B)  2.44% 
C)  14.63% 
D)  16.67% 
E)  683.33% 
A)  85.37% 
B)  2.44% 
C)  14.63% 
D)  16.67% 
E)  683.33%

Question 8

___________________ refer to reductions in the selling price of merchandise sold to customers, often involving damaged or defective merchandise that a customer is willing to purchase with a decrease in the selling price.

Accepted Answer

The answer of ___________________ refer to reductions in the selling...

Question 9

The year-end adjusted trial balance of ABC Supply for the current year is shown below:
   Prepare closing entries at December 31 for the current year.

Accepted Answer

The answer of The year-end adjusted trial balance of ABC...

Question 10

A debit to Sales Returns and Allowances and a credit to Accounts Receivable:

Accepted Answer

A)  Reflects an increase in amount due from a customer. 
B)  Recognizes that a customer returned merchandise and/or received an allowance. 
C)  Requires a debit memorandum to recognize the customer's return. 
D)  Is recorded when a customer takes a discount. 
E)  Reflects an increase in net sales. 
A)  Reflects an increase in amount due from a customer. 
B)  Recognizes that a customer returned merchandise and/or received an allowance. 
C)  Requires a debit memorandum to recognize the customer's return. 
D)  Is recorded when a customer takes a discount. 
E)  Reflects an increase in net sales.

Question 11

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accepted Answer

The answer of A ______________________ income statement includes cost of...

Question 12

_______________________ are nonoperating activities that include interest, dividend and rent revenues, and gains from asset disposals.

Accepted Answer

Other reve

Question 13

A ___________ inventory system updates the accounting record for inventory only at the end of a period.

Accepted Answer

The answer of A ___________ inventory system updates the accounting...

Question 14

The credit terms 2/10, n/30 are interpreted as:

Accepted Answer

A)  2% cash discount if the amount is paid within 10 days, with the balance due in 30 days, 
B)  10% cash discount if the amount is paid within 2 days, with balance due in 30 days, 
C)  30% discount if paid within 2 days, 
D)  30% discount if paid within 10 days, 
E)  2% discount if paid within 30 days, 
A)  2% cash discount if the amount is paid within 10 days, with the balance due in 30 days, 
B)  10% cash discount if the amount is paid within 2 days, with balance due in 30 days, 
C)  30% discount if paid within 2 days, 
D)  30% discount if paid within 10 days, 
E)  2% discount if paid within 30 days,

Question 15

The current period's ending inventory is:

Accepted Answer

A)  The next period's beginning inventory. 
B)  The current period's cost of goods sold. 
C)  The prior period's beginning inventory. 
D)  The current period's net purchases. 
E)  The current period's beginning inventory. 
A)  The next period's beginning inventory. 
B)  The current period's cost of goods sold. 
C)  The prior period's beginning inventory. 
D)  The current period's net purchases. 
E)  The current period's beginning inventory.

Question 16

A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000, net income of $263,500, and cost of goods sold of $420,000. What is the gross profit/margin for the period?

Accepted Answer

A)  $ 806,000 
B)  $1,031,000 
C)  $1,182,000 
D)  $1,080,000 
E)  $ 855,000 
A)  $ 806,000 
B)  $1,031,000 
C)  $1,182,000 
D)  $1,080,000 
E)  $ 855,000

Question 17

A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

Accepted Answer

The answer of A merchandising company's ___________ begins with the...

Question 18

A debit memorandum is:

Accepted Answer

A)  Required whenever a journal entry is recorded, 
B)  The source document for the purchase of merchandise inventory, 
C)  Required when a purchase discount is granted, 
D)  The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records, 
E)  Not necessary in a perpetual inventory system, 
A)  Required whenever a journal entry is recorded, 
B)  The source document for the purchase of merchandise inventory, 
C)  Required when a purchase discount is granted, 
D)  The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records, 
E)  Not necessary in a perpetual inventory system,

Question 19

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

Accepted Answer

A) True 
 B)False

Question 20

If goods are shipped FOB shipping point, the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete until that point.

Accepted Answer

A) True 
 B)False

List the steps of the operating cycle for a merchandiser with credit sales.

Neutron uses a periodic inventory system. Prepare general journal entries to record the following transactions for Neutron:

Generally accepted accounting principles require companies to use a specific format for the financial statements.

A company had net sales of $545,000 and cost of goods sold of $345,000, which means its gross margin is equal to $200,000.

Beginning merchandise inventory plus the net cost of purchases is equal to the merchandise available for sale.

What is inventory shrinkage? How do managers account for shrinkage?

A company had net sales of $82,000, cost of goods sold of $70,000, and other expenses of $2,000. Its gross margin ratio equals:

___________________ refer to reductions in the selling price of merchandise sold to customers, often involving damaged or defective merchandise that a customer is willing to purchase with a decrease in the selling price.

The year-end adjusted trial balance of ABC Supply for the current year is shown below: Prepare closing entries at December 31 for the current year.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable:

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

_______________________ are nonoperating activities that include interest, dividend and rent revenues, and gains from asset disposals.

A ___________ inventory system updates the accounting record for inventory only at the end of a period.

The credit terms 2/10, n/30 are interpreted as:

The current period's ending inventory is:

A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000, net income of $263,500, and cost of goods sold of $420,000. What is the gross profit/margin for the period?

A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

A debit memorandum is:

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

If goods are shipped FOB shipping point, the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete until that point.

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 4: Accounting for Merchandising Operations

List the steps of the operating cycle for a merchandiser with credit sales.

Neutron uses a periodic inventory system. Prepare general journal entries to record the following transactions for Neutron:

Generally accepted accounting principles require companies to use a specific format for the financial statements.

A company had net sales of $545,000 and cost of goods sold of $345,000, which means its gross margin is equal to $200,000.

Beginning merchandise inventory plus the net cost of purchases is equal to the merchandise available for sale.

What is inventory shrinkage? How do managers account for shrinkage?

A company had net sales of $82,000, cost of goods sold of $70,000, and other expenses of $2,000. Its gross margin ratio equals:

___________________ refer to reductions in the selling price of merchandise sold to customers, often involving damaged or defective merchandise that a customer is willing to purchase with a decrease in the selling price.

The year-end adjusted trial balance of ABC Supply for the current year is shown below: Prepare closing entries at December 31 for the current year.

A debit to Sales Returns and Allowances and a credit to Accounts Receivable:

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

_______________________ are nonoperating activities that include interest, dividend and rent revenues, and gains from asset disposals.

A ___________ inventory system updates the accounting record for inventory only at the end of a period.

The credit terms 2/10, n/30 are interpreted as:

The current period's ending inventory is:

A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000, net income of $263,500, and cost of goods sold of $420,000. What is the gross profit/margin for the period?

A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

A debit memorandum is:

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

If goods are shipped FOB shipping point, the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete until that point.

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters