Exam 4: Merchandising Operations and the Multiple-Step Income Statement

Financial information is presented below: Operating expenses \ 28,000 Sales returns and allowances 7,000 Sales discounts 3,000 Sales revenue 150,000 Cost of goods sold 98,000 The profit margin would be

Davies Company purchased merchandise inventory with an invoice price of $15,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Davies Company pays within the discount period?

Anderson Inc. sells $1,200 of merchandise on account to Baltic Company with credit terms of 2/10, n/30. If Baltic Company remits a check taking advantage of the discount offered, what is the amount of Baltic Company's check?

All of the following statements are true regarding the periodic inventory system except

Crowder Corporation recorded the return of $200 of goods originally sold on credit to Discount Industries. Using the periodic inventory approach, Crowder would record this transaction as:

Cost of Goods Sold is considered an expense of a merchandising firm.

Which of the following expressions is incorrect?

For the income statement, IFRS requires

A merchandising company's net income is determined by subtracting operating expenses from gross profit.

If a customer agrees to retain merchandise that is defective because the seller is willing to reduce the selling price, this transaction is known as a sales

Under a perpetual inventory system

The collection of a $500 account beyond the 2 percent discount period will result in a

Financial information is presented below: Operating expenses \ 42,000 Sales returns and allowances 12,000 Sales discounts 3,000 Sales revenue 165,000 Cost of goods sold 96,000 Gross profit would be

The sales section of an income statement for a retailer would not include

The basic accounting entries for merchandising are

Cash register tapes provide evidence of credit sales.

Under GAAP, companies can choose which inventory system?

The amount of cost of good available for sale during the year depends on the amounts of

An advantage of using the periodic inventory system is that it requires less record keeping than the perpetual inventory system.

Gross profit appears on both the single-step and multiple-step forms of an income statement.