Exam 5: Merchandising Operations and the Multiple-Step Income Statement

Ramos Company receives a payment on account from Martinez Industries.Based on the original sale of $12,000 using the periodic inventory approach, Ramos honors the 3% cash discount and records the payment.Which of the following is the correct entry for Ramos to record?

The Sales Returns and Allowances account does not provide information to management about

Tony's Market recorded the following events involving a recent purchase of inventory: Received goods for $80,000, terms 2/10, n/30. Returned $1,600 of the shipment for credit. Paid $400 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory

The figure for which of the following items is determined at a different time under the perpetual inventory method than under the periodic method?

As the president of Harter Company, you notice that no discounts have been taken when settling accounts payables.What would be an acceptable explanation?

A company shows the following balances: What is the company's gross profit rate?

Inventory becomes part of cost of goods sold when a company

Financial information is presented below: Gross profit would be

Generally, the revenue account for a merchandising enterprise is called

Which of the following accounts normally have debit balances?

Taylor Corporation purchases $1,500 of merchandise on account from Enterprise Company, terms 2/10, n/30.Taylor and Enterprise both use periodic inventory systems.Enterprise's entry record this transaction is:

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

Financial information is presented below: The gross profit rate would be

Indicate which one of the following would not appear on both a single-step income statement and a multiple-step income statement.

What is an advantage of using the multiple-step income statement?

Which of the following companies would be most likely to use a perpetual inventory system?

Net sales minus cost of goods sold is called gross profit.

Under the periodic system, when a customer returns goods, Purchases Returns and Allowances is debited.

Adams Company is a retailer and uses a perpetual inventory system.Which statement is correct?

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company.