Exam 5: Accounting for Merchandising Operations

A credit sale of $3,600 is made on July 15, terms 2/10, n/30, on which a return of $200 is granted on July 18. What amount is received as payment in full on July 24?

The gross profit rate is computed by dividing gross profit by

Financial information is presented below: Operating Expenses \ 90,000 Sales Returns and Allowances 18,000 Sales Discounts 12,000 Sales Revenue 320,000 Cost of Goods Sold 174,000 The amount of net sales on the income statement would be

Sales revenue

Sales minus operating expenses equals gross profit.

Cost of goods available for sale is computed by adding

On November 2, 2014, Kasdan Company has cash sales of $6,000 from merchandise having a cost of $3,600. The entries to record the day's cash sales will include:

Glover Co. returned defective goods costing $5,000 to Mal Company on April 19, for credit. The goods were purchased April 10, on credit, terms 3/10, n/30. The entry by Glover Co. on April 19, in receiving full credit is: a. Accounts Payable 5,000 Inventory 5,000 b. Accounts Payable 5,000 Inventory 150 Cash 5,150 c. Accounts Payable 5,000 Purchase Discounts 120 Inventory 4,850 d. Accounts Payable 5,000 Inventory 120 Cash 4,850

To grant a customer a sales return, the seller credits Sales Returns and Allowances.

Under IFRS, income statement items are generally described as

A perpetual inventory system would likely be used by a(n)

If a merchandising company sells land at more than its cost, the gain should be reported in the sales revenue section of the income statement.

Which of the following would not be considered a merchandising company?

Sales revenues are recognized during the period cash is collected from the buyer.

For the income statement, IFRS requires

In a perpetual inventory system, the Cost of Goods Sold account is used

Under the perpetual system, freight costs incurred by the buyer for the transporting of goods is recorded in

All of the following are contra revenue accounts except

Jake's Market recorded the following events involving a recent purchase of merchandise: Received goods for $60,000, terms 2/10, n/30. Returned $1,200 of the shipment for credit. Paid $300 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory increased by

Detailed records of goods held for resale are not maintained under a