Exam 5: Accounting for Merchandising Operations

In a perpetual inventory system, a return of defective merchandise by a purchaser is recorded by crediting

The entry to record the receipt of payment within the discount period on a sale of $2,000 with terms of 2/10, n/30 will include a credit to

The respective normal account balances of Purchases, Purchase Discounts, and Freight-in are

The major difference between the balance sheets of a service company and a merchandising company is inventory.

In a multiple-step income statement, income from operations excludes other revenues and gains and other expenses and losses.

During August, 2015, Baxter's Supply Store generated revenues of $60,000. The company's expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000. The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000. Baxter's operating income for the month of August, 2015 is

Cost of goods available for sale is computed by adding

Under a periodic inventory system, the acquisition of inventory is charged to the Purchases account.

In accounting for inventory, companies