Question 1

Norton's cost of goods sold is

Accepted Answer

A) $230,000. 
B) $220,000. 
C) $196,000. 
D) $190,000. 
A) $230,000. 
B) $220,000. 
C) $196,000. 
D) $190,000. C

Question 2

IFRS requires companies to mark the recorded values of certain types of assets and liabilities to their historical cost at the end of each reporting period.

Accepted Answer

A) True 
 B)False  False

Question 3

Sales revenue

Accepted Answer

A) may be recorded before cash is collected. 
B) will always equal cash collections in a month. 
C) only results from credit sales. 
D) is only recorded after cash is collected. 
A) may be recorded before cash is collected. 
B) will always equal cash collections in a month. 
C) only results from credit sales. 
D) is only recorded after cash is collected. A

Question 4

Geran Company purchased merchandise inventory with an invoice price of $8,000 and credit terms of 2/10, n/30.What is the net cost of the goods if Geran Company pays within the discount period?

Accepted Answer

A) $8,000 
B) $7,840 
C) $7,200 
D) $7,360 
A) $8,000 
B) $7,840 
C) $7,200 
D) $7,360

Question 5

Under a periodic inventory system, freight-in on merchandise purchases should be charged to the Inventory account.

Accepted Answer

A) True 
 B)False

Question 6

The Merchandise Inventory account balance appearing in a worksheet represents the

Accepted Answer

A) ending inventory. 
B) beginning inventory. 
C) cost of merchandise purchased. 
D) cost of merchandise sold. 
A) ending inventory. 
B) beginning inventory. 
C) cost of merchandise purchased. 
D) cost of merchandise sold.

Question 7

During 2011, Yoder Enterprises generated revenues of $90,000.The company's expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000. Yoder's net income is

Accepted Answer

A) $90,000. 
B) $45,000. 
C) $27,000. 
D) $24,000. 
A) $90,000. 
B) $45,000. 
C) $27,000. 
D) $24,000.

Question 8

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

Accepted Answer

A) inferior merchandise. 
B) the percentage of credit sales versus cash sales. 
C) inefficiencies in filling orders. 
D) errors in billing customers. 
A) inferior merchandise. 
B) the percentage of credit sales versus cash sales. 
C) inefficiencies in filling orders. 
D) errors in billing customers.

Question 9

Which of the following statements is true regarding the project to rework the structure of financial statements undertaken by the International Accounting Standard Board (IASB) and the Financial Accounting Standards Board (FASB)?

Accepted Answer

A) The proposed changes to the financial statements would result in considerably more detail than currently seen under IFRS and U.S.GAAP. 
B) The proposed structure is meant to draw attention away from net income. 
C) The proposed structure will adopt major groupings similar to those currently used by the statement of cash flows (operating, investing, and financial). 
D) All of the choices are correct regarding the project to rework the structure of financial statements undertaken by the IASB and the FASB. 
A) The proposed changes to the financial statements would result in considerably more detail than currently seen under IFRS and U.S.GAAP. 
B) The proposed structure is meant to draw attention away from net income. 
C) The proposed structure will adopt major groupings similar to those currently used by the statement of cash flows (operating, investing, and financial). 
D) All of the choices are correct regarding the project to rework the structure of financial statements undertaken by the IASB and the FASB.

Question 10

The entry to record the receipt of payment within the discount period on a sale of ¥7,500 with terms of 2/10, n/30 will include a credit to

Accepted Answer

A) Sales Discounts for ¥150. 
B) Cash for ¥735. 
C) Accounts Receivable for ¥7,500. 
D) Sales for ¥7,500. 
A) Sales Discounts for ¥150. 
B) Cash for ¥735. 
C) Accounts Receivable for ¥7,500. 
D) Sales for ¥7,500.

Question 11

Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) .454. 
B) .546. 
C) .500. 
D) .538. 
A) .454. 
B) .546. 
C) .500. 
D) .538.

Question 13

In a perpetual inventory system, cost of goods sold is recorded

Accepted Answer

A) on a daily basis. 
B) on a monthly basis. 
C) on an annual basis. 
D) with each sale. 
A) on a daily basis. 
B) on a monthly basis. 
C) on an annual basis. 
D) with each sale.

Question 14

At the beginning of September, 2011, GLF Company reported Merchandise Inventory of $4,000.During the month, the company made purchases of $11,700.At September 30, 2011, a physical count of inventory reported $4,800 on hand.Cost of goods sold for the month is

Accepted Answer

A) $900. 
B) $11,700. 
C) $10,900. 
D) $17,700. 
A) $900. 
B) $11,700. 
C) $10,900. 
D) $17,700.

Question 15

195

Accepted Answer

The answer of 195  ...

Question 16

Company X sells $400 of merchandise on account to Company Y with credit terms of 2/10, n/30.If Company Y remits a check taking advantage of the discount offered, what is the amount of Company Y's check?

Accepted Answer

A) $280 
B) $392 
C) $360 
D) $320 
A) $280 
B) $392 
C) $360 
D) $320

Question 17

IFRS requires a single-step income statement, but U.S GAAP allows either the single-step or the multiple-step income statement.

Accepted Answer

A) True 
 B)False

Question 18

In the Clark Company, sales were $320,000, sales returns and allowances were $20,000, and cost of goods sold was $180,000.The gross profit rate was

Accepted Answer

A) 60%. 
B) 40%. 
C) 38%. 
D) 56%. 
A) 60%. 
B) 40%. 
C) 38%. 
D) 56%.

Question 19

Cost of goods available for sale is computed by adding

Accepted Answer

A) beginning inventory to net purchases. 
B) beginning inventory to the cost of goods purchased. 
C) net purchases and freight-in. 
D) purchases to beginning inventory. 
A) beginning inventory to net purchases. 
B) beginning inventory to the cost of goods purchased. 
C) net purchases and freight-in. 
D) purchases to beginning inventory.

Question 20

Operating expenses are different for merchandising and service companies.

Accepted Answer

A) True 
 B)False

Norton's cost of goods sold is

IFRS requires companies to mark the recorded values of certain types of assets and liabilities to their historical cost at the end of each reporting period.

Sales revenue

Geran Company purchased merchandise inventory with an invoice price of $8,000 and credit terms of 2/10, n/30.What is the net cost of the goods if Geran Company pays within the discount period?

Under a periodic inventory system, freight-in on merchandise purchases should be charged to the Inventory account.

The Merchandise Inventory account balance appearing in a worksheet represents the

During 2011, Yoder Enterprises generated revenues of $90,000.The company's expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000. Yoder's net income is

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

Which of the following statements is true regarding the project to rework the structure of financial statements undertaken by the International Accounting Standard Board (IASB) and the Financial Accounting Standards Board (FASB)?

The entry to record the receipt of payment within the discount period on a sale of ¥7,500 with terms of 2/10, n/30 will include a credit to

Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.

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

In a perpetual inventory system, cost of goods sold is recorded

At the beginning of September, 2011, GLF Company reported Merchandise Inventory of $4,000.During the month, the company made purchases of $11,700.At September 30, 2011, a physical count of inventory reported $4,800 on hand.Cost of goods sold for the month is

195

Company X sells $400 of merchandise on account to Company Y with credit terms of 2/10, n/30.If Company Y remits a check taking advantage of the discount offered, what is the amount of Company Y's check?

IFRS requires a single-step income statement, but U.S GAAP allows either the single-step or the multiple-step income statement.

In the Clark Company, sales were $320,000, sales returns and allowances were $20,000, and cost of goods sold was $180,000.The gross profit rate was

Cost of goods available for sale is computed by adding

Operating expenses are different for merchandising and service companies.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters

Exam 5: Accounting for Merchandising Operations

Norton's cost of goods sold is

IFRS requires companies to mark the recorded values of certain types of assets and liabilities to their historical cost at the end of each reporting period.

Sales revenue

Geran Company purchased merchandise inventory with an invoice price of $8,000 and credit terms of 2/10, n/30.What is the net cost of the goods if Geran Company pays within the discount period?

Under a periodic inventory system, freight-in on merchandise purchases should be charged to the Inventory account.

The Merchandise Inventory account balance appearing in a worksheet represents the

During 2011, Yoder Enterprises generated revenues of $90,000.The company's expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000. Yoder's net income is

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

Which of the following statements is true regarding the project to rework the structure of financial statements undertaken by the International Accounting Standard Board (IASB) and the Financial Accounting Standards Board (FASB)?

The entry to record the receipt of payment within the discount period on a sale of ¥7,500 with terms of 2/10, n/30 will include a credit to

Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.

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

In a perpetual inventory system, cost of goods sold is recorded

At the beginning of September, 2011, GLF Company reported Merchandise Inventory of $4,000.During the month, the company made purchases of $11,700.At September 30, 2011, a physical count of inventory reported $4,800 on hand.Cost of goods sold for the month is

195

Company X sells $400 of merchandise on account to Company Y with credit terms of 2/10, n/30.If Company Y remits a check taking advantage of the discount offered, what is the amount of Company Y's check?

IFRS requires a single-step income statement, but U.S GAAP allows either the single-step or the multiple-step income statement.

In the Clark Company, sales were $320,000, sales returns and allowances were $20,000, and cost of goods sold was $180,000.The gross profit rate was

Cost of goods available for sale is computed by adding

Operating expenses are different for merchandising and service companies.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters